Killeen Rental Market 2026: What Landlords Actually Earn
Rents are down, values are down, and property taxes are not. This is the Killeen rental market with honest assumptions. Here are the real numbers on a Killeen rental — gross yield, operating costs, and the cash flow left over after the mortgage.
What does a landlord actually earn in the Killeen rental market?
Average rent in Killeen is about $1,258 per month, down 1.2 percent year over year, against an average home value near $220,448 — a gross rental yield of roughly 6.85 percent. After property taxes, insurance, maintenance, vacancy and management, a typical $220,000 rental house at $1,350 per month produces a net operating income near $6,200, or a cap rate around 2.8 percent (about 3.5 percent if you self-manage).
The honest headline: at 2026 mortgage rates a Killeen rental bought today does not cash flow. A home already financed at a pre-2022 rate roughly breaks even. Fort Hood BAH — $1,695 for an E-5 with dependents in 2026 — is what sets the rent ceiling, not what the landlord needs to charge.
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A rental property is a business with one customer at a time. The numbers either work or they do not, and hope is not an operating expense you can deduct.
The Killeen rental market has a reputation among out-of-state investors as cheap, high-yield and recession-proof because of Fort Hood. Two of those three are defensible. The third — high yield — depends entirely on assumptions that most spreadsheets get wrong: taxes at 1.46 percent, hail-country insurance, and the turnover rate in a town where a third of your tenant pool moves on orders.
This is the Killeen rental market with those assumptions made honest. It covers what rents actually are across the Fort Hood corridor in 2026, how BAH caps them, what a real operating statement looks like on a $220,000 house, and the question most Killeen owners are actually asking: should I rent this out or sell it?
What Rents Are in the Killeen Rental Market
Average rent in Killeen is about $1,258 per month as of July 2026, down 1.2 percent year over year. Rents across the Fort Hood corridor range from $1,231 in Copperas Cove to $1,713 in Belton.
| City | Average Rent | Rent YoY | Average Home Value | Gross Yield |
|---|---|---|---|---|
| Killeen | $1,258 | −1.2% | $220,448 | 6.85% |
| Copperas Cove | $1,231 | +0.4% | $227,504 | 6.49% |
| Temple | $1,400 | −0.7% | $248,213 | 6.77% |
| Harker Heights | $1,590 | Flat | $300,567 | 6.35% |
| Belton | $1,713 | −0.1% | $315,954 | 6.51% |
Two observations that matter more than the ranking. First, gross yields across the entire Killeen rental market cluster tightly between 6.3 and 6.9 percent — there is no secret high-yield submarket here, only different price points. Second, monthly rent runs about 0.53 to 0.57 percent of value, which means nothing in the corridor comes close to the old one percent rule investors use as a screening test.
Apartment data tells the same Killeen rental market story from a different angle. RentCafe put the Killeen apartment average near $1,078 across a 775-square-foot average unit in September 2026, with two-bedrooms at $1,169 and three-bedrooms at $1,262, and rents down 2.3 percent over the year. Single-family houses rent above apartments, which is why a three-bedroom house in Killeen commonly lists in the $1,250 to $1,450 range.
How Fort Hood BAH Sets the Killeen Rental Market Ceiling
BAH is the single strongest force in the Killeen rental market. A soldier's housing allowance is a hard budget, and rents cluster just beneath the allowance for the ranks that dominate the local tenant pool.
| Paygrade | With Dependents | Without Dependents |
|---|---|---|
| E-4 | $1,662 | $1,374 |
| E-5 | $1,695 | $1,530 |
| E-6 | $1,920 | $1,626 |
| E-7 | $2,070 | $1,668 |
| O-1 | $1,731 | $1,623 |
| O-2 | $1,917 | $1,689 |
| O-3 | $2,340 | $1,833 |
Read the BAH table as a Killeen rental market pricing tool. An E-5 with dependents receives $1,695 per month, and most will not spend all of it on rent because BAH is designed to cover housing costs broadly, not rent alone. Price a three-bedroom house at $1,650 and you are competing for a narrow band of tenants who will feel stretched; price it at $1,395 and you are inside the comfortable range for E-5s and E-6s, which is the deepest part of the tenant pool.
Every 2026 paygrade rate rose, with the E-5 with-dependents tier up 7.2 percent year over year — a rare piece of good news for landlords in a year when market rents fell. Verify current rates against the official Defense Travel Management Office BAH tables before you set a price, since rates change every January.
Rent It or Sell It? Start With the Number.
You cannot run this math without knowing what the house is worth today. We will pull the actual closed comparable sales, give you a defensible value range, and show you what the property would realistically rent for in the current Killeen rental market.
Request a Home Valuation Search Homes for SaleThe Real Operating Math on One Killeen Rental Market Property
A $220,000 three-bedroom house renting at $1,350 produces about $6,200 in net operating income — a 2.8 percent cap rate with professional management, or 3.5 percent if you manage it yourself.
Here is the full Killeen rental market operating statement, with every assumption stated so you can substitute your own.
| Line Item | Assumption | Annual |
|---|---|---|
| Gross scheduled rent | $1,350 × 12 | $16,200 |
| Vacancy and credit loss | 8% — roughly one month per year | −$1,296 |
| Effective gross income | $14,904 | |
| Property taxes | 1.46% Bell County median effective rate | −$3,212 |
| Insurance | Hail-country landlord policy | −$2,400 |
| Maintenance and capital reserve | 10% of gross rent | −$1,620 |
| Property management | 10% of collected rent | −$1,490 |
| Net operating income | Cap rate 2.81% | $6,182 |
Self-manage your Killeen rental market property and you add the $1,490 management fee back, lifting net operating income to about $7,672 and the cap rate to 3.49 percent — while buying yourself a second job that includes 2 a.m. plumbing calls from a tenant who deploys in six weeks.
Notice which line hurts a Killeen rental market landlord most. Property taxes at $3,212 consume more than 21 percent of gross rent, which is why an annual Bell County property tax protest is not optional housekeeping for a landlord — it is one of the few operating expenses you can actually negotiate down. A $20,000 reduction in assessed value is worth roughly $290 a year, straight to net operating income.
Where Investor Spreadsheets Go Wrong Here
- Insurance is underestimated. Central Texas hail has pushed premiums up sharply. Budget from a real quote, not a national rule of thumb.
- Taxes are modeled at the wrong rate. Bell County's median effective rate is about 1.46 percent, well above the national median near 1.02 percent.
- Vacancy is set at 5 percent. In a PCS-driven market, 8 percent is the realistic planning number and 10 percent is not pessimistic.
- Capital expenditure is ignored entirely in most Killeen rental market models. Roofs, HVAC systems and water heaters do not care that your spreadsheet has no line for them.
Why Your Interest Rate Decides Killeen Rental Market Cash Flow
Cash flow in the Killeen rental market is a function of your mortgage rate, not the rent. A property financed at 3 percent roughly breaks even; the same house at 6.5 percent loses several hundred dollars a month.
| Mortgage Rate | Principal & Interest | PITI | Rent Minus PITI | After Management & Maintenance |
|---|---|---|---|---|
| 3.0% | $742 | $1,210 | +$140 | −$130 |
| 5.0% | $945 | $1,412 | −$62 | −$332 |
| 6.5% | $1,112 | $1,580 | −$230 | −$500 |
This single table explains the behavior of the entire Killeen rental market right now. Owners holding pre-2022 financing keep their houses because the loan is an asset they cannot replace. Buyers financing at current rates cannot make the numbers work without a large down payment, which is why the investor bid has thinned and why the corridor is a better market for buyers than it has been in years.
It also explains why, in the Killeen rental market, a seller-paid rate buydown can be worth far more to an investor buyer than an equivalent price cut. Run the comparison in our mortgage calculator before you concede on price.
Vacancy and Turnover in the Killeen Rental Market
Turnover, not vacancy, is the hidden cost. Military tenants move on orders, and every turn costs a month of rent plus make-ready expense, regardless of how quickly you re-lease.
The Killeen rental market runs on a rhythm most landlords elsewhere never see. Summer is peak leasing season as PCS orders land; winter is slow and a vacancy in January can sit. Build the calendar into your leases — a lease that expires in June will re-lease far faster than one expiring in December, and that single decision is worth more than most rent increases.
Killeen rental market landlords must also allow a service member to terminate a lease early under the federal Servicemembers Civil Relief Act when orders qualify. That is not a risk to avoid; it is a feature of the market you have chosen. Price and reserve for it rather than fighting it.
Practical Killeen rental market planning numbers: budget 8 percent vacancy, one full make-ready every two years at roughly $1,500 to $3,000, and a leasing fee of half to a full month's rent if a manager places the tenant. Those three lines are the difference between the yield on paper and the money in your account.
Should You Rent It Out or Sell It in the Killeen Rental Market?
Rent it if you hold a pre-2022 interest rate, have real equity, and can carry a negative month. Sell it if your payment exceeds market rent, your equity is thin, or you need the VA entitlement for your next duty station.
This is the question most Killeen rental market owners actually face, and it usually arrives with orders attached. Work it in this order:
- Get the current valueEverything downstream depends on it. Values are off about 1.1 percent in Killeen over the past year, so a number from two years ago will mislead you in the wrong direction.
- Calculate your true net if you sellSale price minus payoff, commissions, title costs and any concessions. Thin equity in a softening market can put you at the closing table with a check.
- Get a realistic rent opinionNot a hopeful one. Compare against the BAH band and what similar homes actually leased for, not what they are asking.
- Run the monthly gapMarket rent minus PITI minus 10 percent management minus 10 percent maintenance reserve. If that is negative, you are buying appreciation with monthly cash and should say so out loud.
- Check your VA entitlementKeeping the house ties up entitlement you may want at the next duty station. Second-tier entitlement can allow a second purchase, but the math is specific to your loan amount.
- Decide on the horizon, not the monthA negative $130 a month on a 3 percent loan you will hold for a decade is a different decision than negative $500 on a rate you are stuck with.
Our home value guide covers step one in detail, and the home sellers guide covers what a sale actually nets you.
Eight Ways to Protect Your Killeen Rental Market Return
- Protest the tax value every single year. It is the largest controllable expense in the Killeen rental market and the district will not lower it on its own.
- Shop landlord insurance annually. Killeen rental market premiums move with claims history. Hail claims history moves premiums hard in Bell County; the renewal quote is rarely the best quote.
- Time lease expirations for summer. Align turnover with PCS season and cut your vacancy days materially.
- Screen for the deployment cycle. Ask about orders and unit rotation. This is not discrimination; it is planning your re-lease calendar.
- Replace systems before they fail. An HVAC replaced on schedule costs less than an emergency replacement plus a rent concession plus a bad review.
- Price at the BAH sweet spot, not the top. A house leased 11 months at $1,395 beats a house leased 8 months at $1,595.
- Keep a real reserve. Six months of PITI. In a market this turnover-heavy, an undercapitalized landlord becomes a distressed seller.
- Reassess the Killeen rental market annually against the sell option. Holding is a decision you re-make every year, not one you made once.
Key Terms, Defined
- Gross rental yield
- Annual rent divided by property value, before any expenses. Roughly 6.85 percent in Killeen — useful for comparing markets, useless for predicting profit.
- Net operating income (NOI)
- Effective gross income minus all operating expenses, before mortgage payments. The honest measure of what a property produces.
- Cap rate
- Net operating income divided by property value. About 2.8 percent on a professionally managed Killeen rental at these assumptions.
- Effective gross income
- Gross scheduled rent minus vacancy and credit loss. What you actually collect, not what the lease says.
- PITI
- Principal, interest, taxes and insurance — the full monthly cost of carrying a financed property.
- Capital expenditure reserve
- Money set aside for roofs, HVAC and other large replacements. Excluded from operating expenses but never from reality.
- Make-ready
- The cleaning, paint and repair between tenants. Commonly $1,500 to $3,000 per turn in the Killeen rental market.
- BAH
- Basic Allowance for Housing, the monthly housing allowance paid to service members. In military housing area TX286 it effectively sets the local rent ceiling.
Frequently Asked Questions About the Killeen Rental Market
About $1,258 per month as of July 2026, down 1.2 percent year over year, according to Zillow market data. Apartment-only averages run lower, near $1,078 for a typical 775-square-foot unit, while three-bedroom single-family houses commonly lease between $1,250 and $1,450. Across the corridor, Copperas Cove averages $1,231, Temple $1,400, Harker Heights $1,590 and Belton $1,713.
It offers steady military demand and a low entry price, but the Killeen rental market does not currently produce strong cash flow at 2026 mortgage rates. Gross yields cluster near 6.4 to 6.9 percent, and after Bell County's 1.46 percent tax rate, hail-country insurance, maintenance, vacancy and management, cap rates land near 2.8 to 3.5 percent. It works best for buyers with substantial down payments or long holding horizons.
Commonly 8 to 10 percent of collected rent, plus a leasing fee of roughly half to a full month's rent when a new tenant is placed. On a $1,350 rental that is about $1,490 a year in management plus a leasing fee at each turn. Self-managing recovers that money and raises the cap rate from about 2.8 percent to 3.5 percent, at the cost of your time and availability.
Budget 8 percent, or roughly one month per year. Military turnover driven by PCS orders and deployments runs higher than a typical civilian market, and the Servicemembers Civil Relief Act allows qualifying early lease termination on orders. Timing lease expirations for the summer PCS season is the single most effective way to reduce vacancy days.
No. BAH rose across every Fort Hood paygrade for 2026, with the E-5 with-dependents rate up 7.2 percent, yet market rents still declined about 1.2 percent over the same period. BAH sets a ceiling on what tenants can pay; supply and troop levels determine whether landlords get anywhere near it. Treat BAH as a pricing constraint, not a floor under your rent.
Rent it if you hold a pre-2022 mortgage rate, have meaningful equity, and can absorb a negative month. Sell it if your payment exceeds realistic market rent, your equity is thin after selling costs, or you need your VA entitlement for the next duty station. Start with a current valuation, because every part of that comparison depends on what the home is worth today.
Taxes consume more than 21 percent of gross rent on a typical Killeen rental, and a protest is free to file. At Bell County's median effective rate near 1.46 percent, a $20,000 reduction in assessed value is worth roughly $290 per year in net operating income. Note that investment property does not receive the homestead exemption or the 10 percent appraisal cap, which makes the annual protest more important for landlords than for owner-occupants.
Sources and disclaimer: Rent, home value and year-over-year figures are from Zillow market data as of July 31, 2026, with apartment averages from RentCafe as of September 2026. BAH rates are for military housing area TX286 effective January 1, 2026; verify current rates with the Defense Travel Management Office. The operating statement and cash flow tables are illustrative models built on the stated assumptions, not a forecast, a guarantee, or an offer. Actual taxes, insurance, vacancy and maintenance vary by property. This article is general information, not investment, tax or legal advice. Consult a qualified professional before purchasing rental property.
Rent It, Sell It, or Buy Another One?
Homevets Realty is veteran-owned and has closed more than 5,000 transactions across the Fort Hood corridor. We will run the rent-versus-sell numbers on your property with real comparable sales and real lease comps — no obligation.
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