Your First DFW Rental Property: The Numbers to Check Before You Buy
By The Boraak Team · September 27, 2026 · 8 min read
The short answer
Before buying a DFW rental, estimate realistic rent, then subtract everything: loan payment, property taxes (a big cost in Texas), insurance, HOA, vacancy, repairs, capital expenses and management. What's left is your monthly cash flow. Also check the cap rate (net operating income ÷ price) and cash-on-cash return (yearly cash flow ÷ cash invested). If the deal only works with perfect assumptions, it doesn't work.
Start with rent you can actually get
Look at similar homes currently for rent and recently rented nearby, not the most optimistic listing on the street. Boraak's rentals search helps you check what's out there.
Subtract everything (yes, everything)
Monthly costs to budget:
- Loan principal and interest
- Property tax (Texas investors don't get the homestead exemption on rentals, so taxes are higher than for an owner-occupant)
- Insurance and HOA
- Vacancy (a month without a tenant happens)
- Repairs and capital expenses (roof, HVAC, water heater: set money aside monthly)
- Management (even if you self-manage, your time has value)
Three numbers investors use
- Cash flow = rent − all monthly costs
- Cap rate = yearly net operating income (rent − operating costs, before the loan) ÷ purchase price
- Cash-on-cash return = yearly cash flow ÷ total cash you put in (down payment, closing costs, repairs)
Run them with conservative numbers, then again with a bad year. If the bad year keeps you up at night, keep looking.
Ways to find better deals
- Mortgage takeovers can come with a lower rate
- Pre-foreclosure homes may be priced for a quick sale
- The For Investment status on Boraak shows listings sellers marked for investors
- Small multi-family (2–4 units) lets you house-hack: live in one unit, rent the rest
Quick questions
What is a good cap rate for a rental in DFW?
It depends on the area, property type and interest rates. Compare cap rates of similar properties nearby rather than aiming for one universal number.
Do rental properties get the homestead exemption in Texas?
No. The homestead exemption only applies to your principal residence.
Ready to look around?
See investment opportunities →General information, not legal, tax or financial advice. Rules and numbers change; check with a Texas professional for your situation.