1031 Exchange in Killeen Temple MSA
The Killeen-Temple MSA offers military-anchored 1031 exchange opportunities with Fort Hood's $30B economic impact providing stability, but requires careful analysis due to high property taxes (1.64-1.76%) and mixed market trends affecting median home values of $235K-$288K.
Population
460,000
Key Industries
Fort Hood/Fort Cavazos (largest employer), Killeen Independent School District, Walmart Distribution
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
1.60% - 1.80%
Assessment Method
Assessed Value (Texas Property Tax Code)
MSA rate (1.64-1.76%) vs State average (1.63-1.67%)
Slightly above state average
Transfer Taxes & Fees
Transfer Tax Rate
No state transfer tax
Texas has no state transfer tax; local recording fees and title insurance apply
Local Tax Incentives
Texas Enterprise Zone Program
Tax incentives for business development and job creation
Eligibility: Qualifying commercial and industrial developments
Bell County Development Incentives
Local incentives for business expansion and retention
Eligibility: Companies creating jobs and investing in the area
Military Housing Allowance Market
BAH rates support rental market pricing
Eligibility: Properties meeting military housing standards
Opportunity Zones
Number of Zones
2
Key Locations
- East Killeen
- Central Temple
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
460,000
Growth: +1.5% annually
Median Income
$71,013
Unemployment
4.7%
Job Growth
+2.3% annually
Economic Drivers
Market Trends
Median Home Price
$235,000 - $288,000
Average Rent
$1,385/mo
Cap Rates
8.5% - 11.0%
Demographics
Median Age
32.2 years
Bachelor's Degree+
28.5%
Owner Occupied
58.3%
Property Type Analysis
Investment opportunities by asset class
Multifamily
Strong demand from military personnel, young professionals, and logistics workers with BAH support for rental rates.
Market Metrics
- Cap Rates: 9.8%
- Vacancy Trends: Low vacancy at 8.2% due to military housing demand
- Demand Forecast: Stable fundamentals with Fort Hood employment anchor
Risk Factors
- High property tax burden
- Mixed market trends
- Military deployment cycles
Opportunities
- BAH rate support
- Military housing demand
- Young demographics
Single-Family Rental
Popular with military families, healthcare workers, and logistics employees seeking quality housing.
Market Metrics
- Cap Rates: 10.2%
- Vacancy Trends: Low vacancy at 6.5% with military family stability
- Demand Forecast: Strong fundamentals with military and healthcare employment
Risk Factors
- High property tax burden (1.64-1.76%)
- Mixed appreciation trends
- Military PCS moves
Opportunities
- Military family housing demand
- BAH rate support
- Diverse employment base
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Killeen
Military-focused city adjacent to Fort Hood with diverse housing options
Investment Thesis
Military housing demand, BAH support for rental rates, and proximity to largest employer providing consistent tenant base.
Median Price
$248,000
Price Growth
+1.3% YoY
Rental Yield
9.8%
Days on Market
63 days
Key Highlights
Development Pipeline
Military housing and commercial development
Temple
Healthcare and logistics center with higher home values and stability
Investment Thesis
Healthcare employment base, logistics hub location, and higher-income demographics supporting premium rental market.
Median Price
$288,000
Price Growth
+0.3% YoY
Rental Yield
8.5%
Days on Market
55 days
Key Highlights
Development Pipeline
Healthcare and logistics facility expansion
Harker Heights
Suburban community with family appeal and military families
Investment Thesis
Family-oriented military housing, suburban amenities, and proximity to Fort Hood creating stable rental demand.
Median Price
$265,000
Price Growth
+2.1% YoY
Rental Yield
9.2%
Days on Market
58 days
Key Highlights
Development Pipeline
Suburban residential development
Belton
Historic town with affordable housing and growth potential
Investment Thesis
Affordable entry points, historic charm, and proximity to employment centers creating value opportunities.
Median Price
$235,000
Price Growth
+1.8% YoY
Rental Yield
10.5%
Days on Market
68 days
Key Highlights
Development Pipeline
Historic preservation and new residential development
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Compare Markets
See how this MSA stacks up against others
Compare Markets
| Metric | Killeen Temple (Current) | San Antonio-New Braunfels | Austin-Round Rock | Waco |
|---|---|---|---|---|
| Population | 4.0M | 4.0M | 4.0M | 4.0M |
| Median Property Price | $750K | $750K | $750K | $750K |
| Average Cap Rate | 5.2% | 5.2% | 5.2% | 5.2% |
| Job Growth Rate | 2.1% | 2.1% | 2.1% | 2.1% |
| Rental Yield | 4.8% | 4.8% | 4.8% | 4.8% |
| Days on Market | 25 | 25 | 25 | 25 |
Frequently Asked Questions
Common questions about Killeen Temple 1031 exchanges
The market offers military-anchored stability through Fort Hood's $30 billion economic impact, BAH rate support for rental pricing, young demographics (median age 32.2), and diverse employment beyond military including logistics (Walmart, Performance Food Group) and healthcare, potentially offsetting high property taxes (1.64-1.76%) with strong rental demand.
Fort Hood provides exceptional stability as one of the world's largest military installations: consistent housing demand from military personnel, BAH (Basic Allowance for Housing) rates supporting rental pricing, young demographics creating rental demand, and PCS (Permanent Change of Station) moves ensuring regular tenant turnover and market activity.
Yes, two opportunity zones exist: East Killeen and Central Temple. These offer potential tax benefits for qualifying investments including deferral and possible exclusion of capital gains for long-term investments, particularly valuable given the military-anchored economic stability.
The economy is anchored by Fort Hood/Fort Cavazos (largest employer), Killeen ISD (major education employer), logistics hub operations (Walmart, Performance Food Group), healthcare systems, Army and Air Force Exchange Service, and Defense Commissary Agency, providing diversified employment beyond military operations.
Property taxes of 1.64-1.76% (vs. 1.02% national) significantly impact net returns, but military housing demand and BAH rate support can help maintain rental rates that offset higher carrying costs. Success depends on achieving rental rates that exceed the elevated property tax burden while benefiting from military-anchored stability.