Texas has earned its reputation as a landlord’s paradise: and the state doubled down on that distinction in 2026. Two new laws just reshaped the eviction landscape, giving property owners more control and speed than ever before. But before you rush to add another Austin duplex to your portfolio, you need to understand what actually changed, what didn’t, and how the right insurance coverage protects your investment when the legal system works too fast.
Here’s what every real estate investor needs to know about operating in the Lone Star State this year.
Texas stacks the deck in favor of property owners through state law, not local whims. The state prohibits rent control entirely, meaning no Austin city council can cap your rental income when demand spikes. You also face zero state-mandated limits on security deposits, late fees, or notice-to-enter requirements. If you want to charge three months’ rent upfront and a $200 late fee, Texas law won’t stop you.
The eviction timeline remains brutally efficient: three days’ notice to pay or vacate for nonpayment. Compare that to California’s 30-day notice or New York’s labyrinthine housing court system, and you start to see why institutional investors park billions in Texas multifamily properties.
State preemption laws prevent municipalities from freelancing their own tenant-friendly regulations. When Dallas tried to mandate source-of-income protections in 2020, the state legislature shut it down. Your lease agreement governs the relationship, not some progressive city ordinance.
Two pieces of legislation fundamentally altered the eviction and removal process in Texas. If you’re still operating under 2024 assumptions, you’re leaving speed and money on the table.
Effective September 1, 2025, SB 1333 lets you bypass civil eviction proceedings entirely when dealing with unauthorized occupants. If someone breaks into your vacant rental or refuses to leave after their lease expires without renewal, you can now involve law enforcement for immediate removal: often within days instead of weeks.
The critical distinction: this applies only to people with no lease agreement whatsoever. Current tenants or holdover tenants with expired leases still require standard eviction proceedings. You cannot fast-track remove a problem tenant who once had a valid lease, even if they’re now month-to-month.
Starting January 1, 2026, SB 38 overhauled the broader eviction process with faster timelines and summary judgment options. Judges can now issue rulings without hearings if defendants fail to respond to eviction filings. Fewer court appearances mean lower legal fees and faster turnover when you need to regain possession.
The law also clarified trial venue requirements and standardized procedures across counties. Harris County and Travis County no longer interpret eviction rules differently than Tarrant County.
The new laws create operational advantages, but only if you implement them correctly. Here’s where investors gain leverage: and where they create liability.
The fast-track removal under SB 1333 only works when you have ironclad documentation: deeds, title records, lease agreements clearly marked as terminated, and evidence the occupant never had permission. Sloppy record-keeping destroys your ability to use the accelerated process.
Audit your property files now. If you can’t produce a clear chain of ownership and occupancy status within 24 hours, you’ll default to the slower civil process anyway.
Your property manager needs to distinguish between “unauthorized occupant” and “tenant with expired lease” instantly. Misapplying SB 1333 to remove an actual tenant: even one who stopped paying: creates legal exposure and potential civil rights claims.
The occupancy status determines the process. Get it wrong, and you’ve just handed a defense attorney an easy case.
Faster evictions mean faster turnover, but they also compress your decision-making window. You need to know immediately whether to pursue removal, negotiate cash-for-keys, or file formal eviction. The old strategy of waiting weeks while tenants “figured it out” now costs you rental income you could have recovered faster.
Texas has no state income tax, which sounds incredible until you see the property tax bill. The average effective property tax rate sits around 1.80%: one of the highest in the nation. A $400,000 rental property generates roughly $7,200 in annual property taxes, compared to $1,200 in California (where Prop 13 caps increases but income taxes run up to 13.3%).
The math works differently depending on your investment strategy:
✅ Good for:
🚫 Less attractive for:
Property taxes also vary wildly by county. Williamson County (suburban Austin) averages 2.18%, while El Paso County sits at 1.52%. Location determines whether the no-income-tax benefit actually pencils out.
Texas added over 470,000 residents in 2024 alone, with major inflows into Austin, Dallas-Fort Worth, Houston, and San Antonio. Job growth, corporate relocations, and lower living costs continue pulling Americans from California, New York, and Illinois.
More people mean more renters, higher occupancy rates, and upward pressure on rents. But population density also concentrates risk exposure, especially when your properties span different climate zones.
Houston and Corpus Christi face hurricane and flood exposure that doesn’t exist in Dallas or Lubbock. Your standard homeowners policy: assuming you mistakenly secured one for a rental: won’t cover named storms or rising water damage. You need a DP3 dwelling fire policy that accounts for Texas-specific perils.
Inland properties face different risks: hailstorms that total roofs, tornadoes in North Texas, and freeze events like Winter Storm Uri that devastated pipes statewide in 2021. Your dwelling fire policy needs to match the actual exposure, not a generic package.
The faster eviction process also changes your insurance needs. If you’re cycling tenants more frequently, you’re cycling occupancy status more frequently: and vacant properties require different coverage than occupied ones. A 30-day vacancy during turnover can void certain provisions on a standard policy.
The landlord-friendly legal environment creates operational speed, but speed introduces gaps in coverage if your insurance for real estate investors hasn’t kept pace. You can remove a problem tenant in two weeks instead of two months: but what happens to your liability coverage during that accelerated vacancy period?
DP3 insurance specifically addresses the occupancy flexibility that Texas investors exploit. Unlike standard homeowners policies that penalize you for short-term vacancies, a proper dwelling fire policy adjusts for the reality of turnover, renovations, and tenant transitions.
RealAssure structures coverage around how you actually operate, not how a traditional insurer thinks single-family homes should function. If you’re running a portfolio of Texas rentals with frequent turnover, your policy needs to accommodate that without coverage gaps.
Learn more about protecting your residential investment properties with coverage designed for real-world landlording, not suburban homeownership.
Texas remains among the most investor-friendly states in 2026, with stronger legal tools than it had 18 months ago. The new eviction and removal laws give you leverage previous generations of landlords didn’t have. But leverage without proper risk management just means you’re moving faster toward problems you didn’t anticipate.
The no-income-tax advantage still attracts high-earning investors, though property taxes eat into cash flow more than most out-of-state buyers expect. Population growth continues driving rental demand, especially in the major metros. And state preemption keeps Austin and Dallas from experimenting with rent control or just-cause eviction mandates.
You gain speed, flexibility, and legal protection: but you lose margin for error. The faster you operate, the more your insurance coverage needs to match your actual business model. Texas gives you the legal framework to succeed. The right rei insurance ensures you’re still covered when you use it.
Get a quote built for Texas landlords who move at the speed the law now allows.
