Waco's current Zillow ZHVI typical home value is $200,115, while Zillow ZORI typical observed market rent is $1,369 a month. That pairing implies an 8.2% gross yield before every operating cost. ZHVI fell 2.1% year over year while ZORI rose 0.9%, a divergence that does not establish property-level returns. The ZHVI is 3.7x ACS median household income, and annual ZORI equals 30.2% of that income, signaling limited affordability room.
The city has 61,163 housing units; renters occupy 50.6% of occupied units, and 11.9% of all units are vacant. Single-family structures account for 61.5% of the stock, making asset-specific comparisons important. ACS surveyed occupied-housing measures report a $221,700 median home value and a $1,165 median gross rent including selected utilities; the ACS median year built is 1979. Those ACS measures differ in concept and period from Zillow's typical value and observed market rent; they should not be combined or averaged.
Rent burden affects 58.3% of relevant renters, indicating payment pressure. Large multifamily structures are 12.3% of housing units. For-rent units are 18.9% of all vacancies; other ACS reasons include for-sale and seasonal use. These shares measure neither available investment inventory nor leasing speed. Population rose 5.7% between overlapping ACS vintages; this is not an annual rate and may reflect boundary changes. Median household income is $54,365, with unemployment at 4.6% and poverty at 23.1%. These describe demand constraints but do not explain rent or occupancy outcomes.
At the county scope, McLennan County shows a 64-day median listing time, useful for judging resale and negotiation conditions but not city liquidity. The broader Waco metro recorded 0.7% job growth and 4.1 months of supply; these metro measures suggest modest employment expansion alongside for-sale availability, but their denominators do not measure Waco alone. The national Freddie Mac 30-year mortgage rate is 6.58%, a national financing benchmark rather than a city borrowing quote.
Underwriting should therefore treat the headline yield as a screening metric. It excludes taxes, insurance, climate exposure, repairs, management, turnover, utilities, financing and transaction costs, while citywide vacancy cannot predict whether a specific unit will lease. Next, verify the property's achievable rent with close comparables; inspect condition, age-related systems and deferred maintenance; obtain insurance and tax quotes; confirm flood and other hazard exposure; model realistic vacancy and operating reserves; review title, zoning, permits and lease restrictions; and test debt service using an actual lender quote.