Lee County

Lee County, Texas prices out at a median of $361,505 with median rent of $1,200, producing a gross rent-to-price ratio of roughly 0.40%, which is well below the threshold where cash flow becomes plausible at current financing rates. The model underwrite confirms this: at 6.85% on an 80% LTV mortgage, monthly debt service alone runs $1,895, expenses add another $420, and gross rent of $1,200 leaves you $1,115 in the hole every month, a cash-on-cash return of negative 16.09%. The cap rate of 2.59% is below the cost of debt by a wide margin, meaning leverage actively destroys returns rather than amplifying them. Year-over-year home price change is essentially flat at negative 0.08%, so there is no near-term appreciation tailwind to cite either. The overall score of 44 out of 100 places Lee at the 10th national percentile and 185th out of 243 Texas counties, a ranking that accurately reflects what the numbers say.

The cash-flow score of 30 and an appreciation score of 50 tell you exactly what kind of buyer this market does and does not suit. A cash-flow buyer cannot make this pencil at current prices and rates. A pure appreciation buyer gets a market sitting precisely at the midpoint, which is another way of saying there is no particular thesis for price acceleration here. The investor who might find utility in Lee is a longer-horizon value-add operator willing to pay cash or carry deep equity, someone who can compress the effective cost of capital below the 2.59% cap rate floor and manufacture value through renovation or repositioning. Even then, the population of 17,543 constrains the exit market significantly; you are betting on a thin buyer pool when you go to sell or refinance, and the affordability index of 53 suggests local purchasing power is limited relative to current prices.

No economic anchors or employer data were provided for Lee County, so employment concentration and the stability of local rental demand cannot be assessed from this data set. The stability score of 50 is middling and offers no particular comfort in either direction.

The tax and insurance carry in Lee deserves a close look on any underwrite. The combined monthly tax and insurance burden is $693, which is a large share of the $1,200 gross rent before a single dollar of mortgage payment or maintenance is counted. The state-average effective property tax rate used here is 1.80%, and per the Tax Foundation 2024 data underlying this estimate, Texas rates are high enough to flag as a real underwriting consideration. At 1.80%, property tax alone runs $542 per month on a $361,505 asset. Critically, this is a state-average estimate and actual Lee County or township-level rates may differ, so pulling the county assessor's current levy rate before closing is not optional. Texas also carries meaningful wind and hail exposure, and the 0.50% insurance rate adding $150 per month reflects a minimum assumption, not a ceiling.

The primary risk in Lee is thin market depth. A population under 18,000 with flat price growth and a negative cash-flow profile means the investor pool on the buy side is small and the tenant pool on the demand side is limited. No vacancy or crime data were provided, but those are the first due-diligence items to pull independently given the population size. Regulatory risk is not flagged by the data, but rural Texas counties are generally landlord-friendly from a legal standpoint.

The neighbor comparison is instructive. Hardeman County and Cochran County carry median prices of $62,124 and $46,534 respectively, and both score 45 overall, one point better than Lee despite prices that are five to eight times lower. Shackelford County at $148,074 and Willacy County at $169,393 also score at or above Lee with significantly lower entry costs. Bandera County at $329,463 scores the same 44 as Lee at a 9% discount to Lee's price. None of these neighbors are standout markets, but if the objective is maximizing the probability of cash flow at lower absolute capital at risk, Hardeman and Cochran offer entry points where the math has a better chance of working for a cash buyer or heavily discounted acquisition. An investor should choose Lee County over these alternatives only if there is a specific off-market deal at a material discount to the $361,505 median, a local knowledge edge, or a repositioning opportunity that the county-level median cannot capture.