Johnson County

Johnson County sits at a gross rent-to-price ratio of 5.66%, which puts it squarely in the cash-flow-challenged tier for Texas. The model underwrite at a $336,224 purchase price with 20% down ($67,245) and a 6.85% rate produces a monthly mortgage of $1,763. Layer in $555 of estimated operating expenses and $644 in monthly taxes and insurance, and you're spending roughly $2,962 per month to carry a property generating $1,585 in median rent. That's a negative $733 monthly cash flow and a cash-on-cash return of -11.37%. The cap rate comes in at 3.67%, well below any reasonable threshold for a straight cash-flow buy. Home prices also declined 1.12% year-over-year, so the market is not currently compensating for weak current income with appreciation momentum either. Johnson scores 52 overall, 55 on cash flow, and 44 on appreciation, landing at the 28th national percentile and 125th out of 243 Texas counties. At an affordability index of 58, pricing is not wildly out of reach, but the yield math doesn't work at current rates without significant rent growth or a meaningful discount to median.

The numbers point to a very narrow set of buyers who can make this market work. A pure cash-flow investor looking to collect checks from day one should look elsewhere. An appreciation buyer might consider it, but a -1.12% price trend and a below-average appreciation score of 44 don't argue for that either. The realistic buyer here is either someone bringing more equity to the table to compress the debt service, or a value-add operator who can acquire below median, push rents above the $1,585 median through renovation, and manufacture yield that the market doesn't currently offer at list price. A paid-down or all-cash position would flip the cap rate of 3.67% into a positive carry situation, though that cap rate is still thin relative to what's available in higher-yield Texas markets.

The property tax carry in Johnson County deserves a specific line on any underwrite. At the Texas state-average effective rate of 1.80%, the annual tax bill on a $336,224 property runs approximately $6,052, or $504 per month. Combined with $140 per month in insurance, the monthly tax and insurance load is $644. That is material. At 1.80%, the state-average rate is high enough that even modest variation at the county or township level could meaningfully shift your breakeven. The data here uses a state-average estimate from Tax Foundation 2024, so pull the actual Johnson County assessor rate before closing, not after. Texas has no state income tax, which benefits landlords on the net income side, but that advantage is partially offset by property tax rates that are among the highest in the country, and Johnson County is not an exception.

Comparing Johnson to its neighbors sharpens the picture. Henderson County offers a median home price of $267,226 and a rent-to-price ratio of 5.93%, better yield at a lower entry point, and an identical overall score of 52. Bastrop County, sitting southeast of Austin, has a rent-to-price ratio of 6.03% on a $356,064 median, the best yield among the named neighbors, and likely benefits from Austin-adjacent rental demand. Rains County comes in at $284,463 with a score of 51, and Reeves County at $166,232 is the outlier on price, though its isolated West Texas location introduces concentration and liquidity risk that the price alone doesn't capture. Mason County lacks rent data, limiting its comparability. If the objective is yield within this peer group, Bastrop and Henderson both screen better than Johnson on the rent-to-price metric. The case for choosing Johnson over those two would rest on specific submarket knowledge, a below-list acquisition, or a value-add thesis that pencils at a price point the county median doesn't represent.

The population of 182,690 suggests a county with a real tenant base, likely drawing from its position in the Dallas-Fort Worth Metroplex's southern fringe, which does support some structural rental demand. But that demand hasn't translated into rents high enough to clear the cost of capital at current prices and interest rates. No economic anchor data was provided, so employer concentration and job-base stability cannot be assessed here. An investor targeting Johnson County should independently verify the local employment base and whether any specific submarkets, such as Cleburne or Burleson, show materially different rent-to-price dynamics than the county median reflects. The county-wide median is a starting point, not a buying decision.