1031 Exchange in Amarillo MSA
The Amarillo MSA offers strong 1031 exchange opportunities with cap rates of 5.75-7.57%, property taxes around 2.0-2.5%, diverse energy and agriculture economy, and median home prices of $229,875 in Texas's strategic Panhandle location.
Population
274,650
Key Industries
Energy, Agriculture, Manufacturing
Table of Contents
Information is for educational purposes only. Consult qualified professionals for specific advice.
Local Tax Considerations
Property taxes, transfer taxes, and local incentives
Property Tax Rates
Average Rate
2.0-2.5%
Assessment Method
Assessed Value (Texas Property Tax System)
MSA rate (2.0-2.5%) vs State average (1.80%)
+11-39% above state average, +96-145% above national average
Transfer Taxes & Fees
Transfer Tax Rate
No state transfer tax
Texas has no state transfer tax; local transfer fees may apply
Local Tax Incentives
Texas Enterprise Zone Program
Tax incentives for businesses in designated enterprise zones
Eligibility: Properties located in designated enterprise zones
Freeport Exemption
Exemption for goods in transit and business inventory
Eligibility: Qualifying business personal property and inventory
Agricultural Exemption
Reduced property taxes for agricultural land use
Eligibility: Properties meeting agricultural use requirements
Opportunity Zones
Number of Zones
3
Key Locations
- East Amarillo
- Central Amarillo
- South Amarillo
Opportunity Zones offer significant tax benefits for long-term investments, including deferral and potential elimination of capital gains taxes.
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Market Profile Dashboard
Economic indicators and market trends
Population
274,650
Growth: +0.6% annually
Median Income
$62,469
Unemployment
3.2%
Job Growth
+1.2% annually
Economic Drivers
Market Trends
Median Home Price
$229,875
Average Rent
$1,150/mo
Cap Rates
5.75-7.57%
Demographics
Median Age
34.1 years
Bachelor's Degree+
24.8%
Owner Occupied
60.8%
Property Type Analysis
Investment opportunities by asset class
Single-Family Rental
Strong investment opportunity with diverse tenant base from energy, agriculture, healthcare, and government sectors.
Market Metrics
- Cap Rates: 6.8%
- Vacancy Trends: Low vacancy around 5-7% due to employment stability and population growth
- Demand Forecast: Stable demand supported by economic diversification and job growth
Risk Factors
- Energy sector cyclicality affecting employment
- Weather-related property damage risks
- Competition from new construction
- Economic dependence on agriculture and energy
Opportunities
- Energy sector employment stability
- Healthcare and government job growth
- Affordable entry prices for investors
- Strong rental demand from young professionals
Multifamily
Good opportunities with diverse tenant base from energy workers, healthcare professionals, and young families.
Market Metrics
- Cap Rates: 6.2%
- Vacancy Trends: Moderate vacancy around 8-10% with seasonal variations
- Demand Forecast: Positive outlook supported by job growth and demographic trends
Risk Factors
- Energy sector employment volatility
- Competition from single-family rentals
- Seasonal demand fluctuations
- Weather-related maintenance costs
Opportunities
- Young professional demographics
- Energy sector worker housing demand
- Healthcare employment growth
- University and college student housing
Industrial
Strong opportunities supported by energy, agriculture, manufacturing, and transportation sectors.
Market Metrics
- Cap Rates: 7.1%
- Vacancy Trends: Low industrial vacancy around 4-6% due to economic activity
- Demand Forecast: Strong demand from energy, agriculture, and logistics sectors
Risk Factors
- Energy sector cyclicality
- Agricultural commodity price volatility
- Transportation infrastructure limitations
- Environmental regulations
Opportunities
- Energy sector expansion
- Agricultural processing and storage
- Transportation and logistics hub
- Manufacturing and assembly operations
Office
Moderate opportunities with government, healthcare, and energy sector demand offset by remote work trends.
Market Metrics
- Cap Rates: 7.8%
- Vacancy Trends: Higher vacancy around 12-15% due to remote work and economic shifts
- Demand Forecast: Cautious outlook due to remote work trends but supported by local employment
Risk Factors
- Remote work reducing office demand
- Energy sector employment volatility
- Competition from newer facilities
- Economic cyclicality
Opportunities
- Government tenant stability
- Healthcare office demand
- Energy sector professional services
- Adaptive reuse potential
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Downtown Amarillo
Historic downtown core with government offices, cultural attractions, and business district
Investment Thesis
Stable rental demand from government workers and professionals, opportunity zone benefits, and downtown revitalization potential, though limited residential inventory.
Median Price
$185,000
Price Growth
+2.8% YoY
Rental Yield
7.2%
Days on Market
45 days
Key Highlights
Development Pipeline
Downtown revitalization projects and mixed-use development
West Amarillo
Established residential area with mix of single-family homes and newer developments
Investment Thesis
Strong rental market with professional demographics and proximity to major employers, supported by energy sector employment and healthcare workers.
Median Price
$245,000
Price Growth
+1.8% YoY
Rental Yield
6.4%
Days on Market
52 days
Key Highlights
Development Pipeline
New residential subdivisions and commercial development
South Amarillo
Growing residential area with newer construction and family-oriented communities
Investment Thesis
Strong appreciation potential with new construction and family demographics, though higher entry prices and competition from new builds.
Median Price
$265,000
Price Growth
+2.2% YoY
Rental Yield
5.9%
Days on Market
48 days
Key Highlights
Development Pipeline
Major residential and commercial expansion projects
East Amarillo
Mixed residential and industrial area with affordable housing options
Investment Thesis
Value-oriented investment opportunities with working-class demographics and industrial employment, though economic sensitivity and infrastructure challenges.
Median Price
$175,000
Price Growth
+0.8% YoY
Rental Yield
8.1%
Days on Market
65 days
Key Highlights
Development Pipeline
Industrial expansion and workforce housing initiatives
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Frequently Asked Questions
Common questions about Amarillo 1031 exchanges
Amarillo offers competitive cap rates of 5.75-7.57%, affordable median home prices of $229,875, diverse economic base including energy and agriculture, strategic Panhandle location, and strong employment in stable sectors like healthcare and government.
The energy sector provides employment stability and drives rental demand, particularly from oil, gas, wind energy, and helium production workers. While subject to some cyclicality, the sector's diversity and strategic importance provide long-term stability.
Yes, the region has 3 designated Opportunity Zones including East Amarillo, Central Amarillo, and South Amarillo. Texas offers favorable business climate and no state income tax, enhancing federal opportunity zone benefits.
Property taxes are moderate to high at 2.0-2.5% effective rate, above the Texas average of 1.80% but offset by no state income tax and affordable property values. The tax burden is manageable given the economic benefits.
Amarillo benefits from economic diversification including energy (oil, gas, wind, helium), agriculture, manufacturing (Bell Helicopter, meat-packing), healthcare, government, and transportation. The strategic location, affordable housing, and business-friendly environment support long-term investment potential.