Faro Labs / Markets / Waco, TX
Waco real estate investment market
What a typical rental in Waco, Texas costs, rents for, and returns: underwritten by Faro's own engine, not a scraped summary.
Returns assume 20% down at 6.75% over 30 years, 7% vacancy, and standard operating costs: Faro's default assumptions, the same ones every report starts from. Home value and rent trends as of 2026-05-31.
Difficult for both
At market rent, a typical Waco rental runs $81 short each month, and home values moved −2.2% over the last year. Neither leg is carrying deals right now, which means the ones that work here are bought well below market rather than at it.
The price a deal actually works at
Faro models five price points for Waco, from a weak buy to a strong one. The market-rate deal is $200,100; a good buy is $180,090 and a great one $160,080 roughly 20% below market value. Those are the bars a specific listing gets measured against when you run it.
How Waco compares
Of the 210 markets Faro publishes, Waco is the 194th most expensive to buy into: 50% below the median covered market, and the 13th strongest on rent-to-price. Within Texas it's the 26th priciest of 27 markets we cover. On the last year of home-value change it ranks 164th.
To break even at the default financing, a typical Waco property would need about $1,632 a month in rent: $100 more than the $1,532 the market currently supports.
What each tier costs in Waco
Faro models five price points per market. A listing gets measured against these bars, not against a national average.
| Tier | Purchase price | Market rent | vs. market rate |
|---|---|---|---|
| Weak buy | $220,110 | $1,455/mo | +10% |
| Fair buy | $210,105 | $1,501/mo | +5% |
| Market rate | $200,100 | $1,532/mo | — |
| Good buy | $180,090 | $1,609/mo | -10% |
| Great buy | $160,080 | $1,685/mo | -20% |
A typical Waco deal, underwritten
The market-rate property above, run through the same engine every Faro report uses.
| Purchase price | $200,100 |
|---|---|
| Monthly rent | $1,532 |
| Cash required (20% down + 3% closing) | $46,023 |
| Net operating income | $11,489/yr |
| Monthly cash flow | -$81 |
| Cap rate | 5.7% |
| Cash-on-cash return | −2.1% |
| DSCR | 0.92 |
One of the cheapest ways in
At $200,100, a typical Waco property costs 49.6% less than the median market Faro covers: 194th most expensive of 210. Cash required at 20% down plus closing is about $46,023, which is what makes markets like this the usual starting point for a first rental. The trade is management: a cheap property is not a cheap property to run, and the fixed costs, a roof, a furnace, a turnover, are the same dollars against a much smaller rent.
Negotiation matters more than usual here
The gap between a market-rate Waco buy at $200,100 and a strong one at $160,080 is 20%: a wide band. In markets with a spread that size, what you pay relative to comps drives the return more than the market's own direction does. Two buyers in the same city, the same month, can end up with completely different deals.
Where it sits in Texas
Faro covers 27 Texas markets, and Waco is the 26th priciest of them at $200,100. Within a single state the tax and insurance environment is broadly shared, so the differences between these markets come down to price, rent, and pace, which makes them the most useful comparison set on this page. The nearby markets listed below are the rest of that set.
Waco investor questions
Is Waco a good place to buy rental property?
A typical Waco rental at $200,100 renting for $1,532 a month returns 5.7% on a cap-rate basis and runs short by $81 a month at 20% down. Individual deals vary far more than markets do, which is the whole reason to underwrite a specific address.
Can you cash-flow a rental in Waco?
Not at the market's own price and rent. A typical property runs $81 short each month. It would need about $1,632 in rent to break even. Deals that work here are bought below market rather than at it, which is what the price ladder above is for.
How much do you need to buy a rental in Waco?
About $46,023 at 20% down plus 3% closing on a typical $200,100 property: one of the lower entry points among the 210 markets covered here.
Are rents going up in Waco?
Rents moved up 1.3% over the last year, measured across 5 ZIP codes. The typical market-rate rental sits at $1,532 a month.
Other Texas markets
Run the numbers yourself
A market average is not a deal.
Paste a real Waco listing and Faro underwrites that specific property from its own comps, with a target price you can actually offer.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.