El Paso, TX — Rental Investment Analysis
🟡MODERATE— average returnsData: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.
Investment Summary
As of 2026, rental properties in El Paso, TX yield a 5.9% cap rate. Median home price is $230,875 with 3-bedroom rents at $1,580/month.
El Paso is a moderate market — workable but not exceptional for cash flow. At $230,875 median home price, El Paso is affordable by national standards and within reach for most conventional loans. With 3-bedroom rents around $1,580/month, the 5.9% cap rate tells the story. At current prices and rates, expect to lose about $78/month — negative cash flow unless you put more down or find below-market deals.
The 1% rule comes in at 0.76% — doesn't quite pass, but close enough to find individual deals that work. DSCR of 0.92 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.
Bottom line: El Paso offers a balance of moderate cash flow and growth potential. Good for investors who want some income while building equity over time.
Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.
Cap Rate
5.9%
Below average
Monthly Cash Flow
-$78
After all expenses
Price-to-Rent
10.9
Investor-friendly
DSCR
0.92
Fails
Key Metrics
- Median Home Price
- $230,875
- Average Rent (3BR)
- $1,580/mo
- Price-to-Rent Ratio
- 10.9(good)
- 1% Rule
- 0.76%(fails — need 1%+)
- Cash-on-Cash Return
- -2.2%
- Vacancy Rate
- 8.0%
Market Strength
- Unemployment Rate
- 4.3%(0% vs national)
- Rent Growth (YoY)
- +2.9%(national avg)
- Population Growth
- +1.5% YoY
Property Tax Rate
1.68%
of assessed value (TX avg)
Median Income
$67,321
household (TX avg)
Rent-to-Income
28.2%
Affordable
Section 8 Max Rent
$1,580/mo
3BR voucher payment
TX Investor Climate
Landlord Friendly
9/10
State Income Tax
None
Property Tax
1.68% effective
Population Trend
+1.5% (3yr)
Population Movement (Tax Year 2021→2022)
Net Migration
-535 households
SHRINKING
Total Inflow
7,093
households moved in
Avg Income (New Residents)
$54,090
per household
Where they're coming from:
Where residents are leaving to:
Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.
Best Zip Codes in El Paso for Investors
All Zip Codes in El Paso
| Zip | Cap Rate | Cash Flow | Home Price | Rent (3BR) | DSCR |
|---|---|---|---|---|---|
| 79901 | 7.0% | +$75 | $140,953 | $1,250/mo | 1.10 |
| 79934 | 6.6% | +$40 | $250,778 | $2,110/mo | 1.03 |
| 79936 | 6.5% | +$26 | $222,479 | $1,860/mo | 1.02 |
| 79907 | 6.4% | -$2 | $179,185 | $1,470/mo | 1.00 |
| 79924 | 6.4% | -$5 | $194,205 | $1,590/mo | 1.00 |
| 79938 | 6.2% | -$33 | $253,118 | $2,040/mo | 0.98 |
| 79938 | 6.2% | -$33 | $253,118 | $2,040/mo | 0.98 |
| 79915 | 6.1% | -$37 | $170,962 | $1,360/mo | 0.96 |
| 79905 | 5.9% | -$61 | $161,082 | $1,250/mo | 0.93 |
| 79903 | 5.9% | -$69 | $179,379 | $1,390/mo | 0.93 |
| 79930 | 5.8% | -$88 | $187,005 | $1,430/mo | 0.91 |
| 79904 | 5.4% | -$150 | $188,978 | $1,370/mo | 0.85 |
| 79835 | 4.9% | -$281 | $220,577 | $1,470/mo | 0.76 |
| 79935 | 4.8% | -$320 | $240,942 | $1,590/mo | 0.75 |
| 79925 | 4.8% | -$325 | $239,272 | $1,570/mo | 0.74 |
| 79911 | 4.3% | -$678 | $392,673 | $2,400/mo | 0.68 |
| 79912 | 4.1% | -$616 | $317,695 | $1,860/mo | 0.64 |
| 79932 | 3.4% | -$811 | $322,296 | $1,660/mo | 0.53 |
| 79902 | 3.3% | -$742 | $284,060 | $1,430/mo | 0.51 |
| 79922 | 2.9% | -$1,211 | $417,041 | $1,950/mo | 0.45 |