Killeen, TX. Would You Invest here?

[Taylor Patterson]

Would you invest in Killeen, TX? Why or why not? If so, what type of property would you purchase?

[Joe Scaparra]

I would use some caution investing in Killeen.  Normally I am a go for it type of guy, but here is my reasoning.  

1.  Killeen economy is heavily dependent on Ft. Hood.  Ft Hood is a very large Army post that has the capability to operate with a large fluctuation of soldiers.  I think in the last year or two I read an article that the post commander was opening up base housing to civilian for rent.  It was due to the fact the post had a lot of unused housing.  Because FT Hood is so large and valuable to the Army, I don't see it ever closing but the force level continues to shift up and down as our defense budget fluctuates. This can cause a strain on housing, with either too much development or too little but always changing.  Killeen might be in an overbuilt situation.

2. As a 20 year vet from the USAF, I qualify for a VA loan, as does any solider in Killeen. A VA loan qualifies you to buy a home with no money down, even closing cost is wrapped into the loan. Young soldiers are lured into buying homes like this in Killeen even though they will rotate out in 3 years or less. What this produces is an over abundance of rentals as most have a hard time selling and recouping their money after having to pay the realtor fees. This phenomenon will keep homes from appreciating and there will always be a competitive pricing rental market for the renter. It is a little crazy to understand as it is totally different than the Austin market. I've been to Killeen to see several duplexes several years ago and the property as compared to Austin is a steal, but for the above two reasons I passed.

Now having said this, If you feel confident that you can stay rented, you should easily find the 1% rule in Killeen.  Cash Flow is dependent on staying rented.  In Austin that is the least of your worries, in Killeen it might be your biggest.  Good Luck.