Williamson County

Williamson County's numbers tell a familiar Austin-suburb story: a 3.21% cap rate and a gross rent-to-price ratio of 0.049 place it squarely in appreciation territory, except appreciation has gone negative. Home prices are down 4.8% year-over-year, the affordability index sits at 45, and the modeled cash flow on a median-priced acquisition at $394,700 is negative $1,013 per month, with a cash-on-cash return of -13.39% at a 6.85% rate on an 80% LTV loan. That is not a rounding error. The market is neither generating cash flow nor delivering price gains right now, which explains the 5th-percentile national ranking and the 201st-out-of-243 position within Texas alone.

The investor profile this suits is narrow. An appreciation buyer needs a credible thesis for price recovery, and with values already correcting, that thesis requires patience and conviction about long-term Austin metro demand, not current momentum. A cash-flow buyer has almost no path to positive returns at median pricing without a substantial discount to market, a rent premium above the $1,625 median, or both. A value-add operator has the best theoretical case: if you can acquire at a meaningful discount to the $394,700 median, force appreciation through renovation, and push rents above the county median, the math can bend toward workability. But the base case at current prices does not pencil on cash flow by any standard underwriting metric, and anyone projecting near-term appreciation is swimming against the current data.

The economic context for Williamson County is real and worth acknowledging in a long-term hold thesis, even though shorter-term numbers are punishing. The county sits within the Austin metro, one of the more active technology and semiconductor corridors in the country, and population growth to 617,396 reflects a decade of in-migration that supported the price run-up now partially unwinding. The risk is that the same growth story is priced in multiple times over, and rents have not kept pace with the asset values that growth inspired.

Tax and insurance are a genuine underwriting problem here. At a state-average effective property tax rate of 1.8%, the annual tax bill on this acquisition is estimated at $7,105, and combined with $1,973 in annual insurance, the monthly tax-and-insurance load alone is $757. That is a rate that deserves its own line on your underwrite, not a plug figure, and it is worth emphasizing that this is a state-average estimate from Tax Foundation 2024 data. Actual Williamson County and municipal overlay rates may differ, and Texas municipalities are not known for restraint on levies. At $757 per month before mortgage, maintenance, management, or vacancy, the cost basis on any acquisition here is punishing, and it is the single largest structural reason the modeled cash flow is as negative as it is.

The concentration risk in Williamson is real even without fabricating statistics. The county's investment performance is tightly coupled to the Austin metro's continued ability to attract high-wage employment. A slowdown in tech hiring or further remote-work normalization that disperses workers out of the metro could sustain or deepen the current price correction. On the regulatory side, Texas has no state income tax and is generally landlord-friendly, which is a genuine offset, but property tax exposure partially cancels that advantage at rates this level.

Compared to the neighbors in the dataset, Williamson is the most expensive and does not score proportionally better for it. Hardeman County at $62,124 median and an overall score of 45 outscores Williamson's 41 at roughly one-sixth the price, though the markets are structurally incomparable in terms of liquidity, tenant base, and economic depth. Shackelford County at $148,074 also scores 44 versus Williamson's 41, again at far lower capital commitment. Bandera County, the closest analog in overall score at 44 and a median of $329,463, represents lower acquisition cost with a marginally better composite score. The case for choosing Williamson over any of these neighbors rests entirely on a long-term Austin metro appreciation thesis and the liquidity of a larger, more institutionally active market. If that thesis is not central to your hold strategy, the numbers do not support paying the Williamson premium.