5 Best Texas Lakes for Real Estate Investment

Posted by Hunter Croan on Tuesday, December 13th, 2022 at 7:10pm.

In the face of changing markets and inflation, real estate investment can offer a steady return and significant appreciation as time goes by.

There are three important factors to consider when looking at a lake house as a real estate investment (as discussed in a previous post):

  1. Future appreciation. History has shown that waterfront property in Central Texas has shown incredible appreciation.
  2. Short-term rental income (STR). Most lake houses can bring very impressive rental income however rarely will this income alone out pace the stock market. This is why #1 must be considered when looking at the numbers on paper.
  3. Personal enjoyment (our personal favorite)! What other investments can you enjoy as much as a lake house? You can’t play with your stock portfolio :)

Not all locations offer the same benefits/uses, and where you ultimately choose to go will depend heavily on what you plan to do with the property, and what exactly you are looking for. For example, there are areas on these lakes that do not allow STRs. Our agents at The Lakefront Group know these areas. As I mentioned above, a Texas lakefront property is an investment with the potential for enormous appreciation as time passes. Here's a look at five of the best Texas lakes that we see as prime investment opportunities.

Lake Dunlap

A reservoir lake fed by the Guadalupe River, Lake Dunlap suffered a dam collapse in 2019. This collapse significantly changed the water levels and currents. Luckily, the soon-to-be-completed construction of a new dam has Lake Dunlap poised for a significant comeback. This anticipated return of consistent water levels, coupled with pristine water, will once again make Lake Dunlap a paradise for watersports. Lake Dunlap is located just outside of downtown New Braunfels. This fast-growing city boasts an impressive roster of restaurants, boutiques, and nightlife. Projections show New Braunfels' population will continue to grow, making real estate investment in Lake Dunlap even more attractive.

Lake McQueeney

Just south of Lake Dunlap, Lake McQueeney has long been dubbed the "Waterski Capital of Texas." Lake McQueeney’s water levels are currently down about 18 inches, however the lake is still boatable. Lake McQueeney’s aging dam is in line to be rebuilt so there will be roughly a 25 month period where Lake McQueeney will be a river while they replace the dam. This has kept real estate values down. We can see a big jump in value once the new dam is completed. Keep in mind it will still be a river while the dam is being replaced so there is still plenty of water fun to be had. Lake McQueeney's proximity to both Austin and San Antonio makes it an excellent investment for those seeking to escape city life. So, if you are interested in renting out your investment property, the location of Lake McQueeney guarantees a large pool of potential renters is just an hour away. The lake also does not have any public access points – the only way onto the water is through private docks/ramps, neighborhood launches, and/or the Lake Breeze Ski Lodge (private club on the lake). This privacy is a big plus for investors.

Lake Placid

Below Lake McQueeny lies Lake Placid. As in the cases of Lake Dunlap and Lake McQueeny, we can expect a sharp rise in home values once the dam project is completed and water levels return to normal. Lake Placid’s dam is not currently functioning so lake levels are roughly 5-12 feet low depending on where you are on the lake. They are on their last leg of permitting which once finished they should be starting construction of the new dam in the Spring of 2023 (this projection is as of Nov 2022). Lake Placid lives up to its name: It is known for its serene waters and relatively low boat traffic. It is also less well-known than other lakes, which means it can offer more investment opportunities that could pay dividends when word spreads. This waterfront community has a tight-knit, small-town feel and could be an excellent investment if you're looking for a location with a slower pace.

Lake LBJ

One of the most well-known lakes for Texas waterfront homes, Lake LBJ (officially Lake Lyndon B. Johnson) is known for luxurious lakeside living. It has constant water levels, allowing year-round enjoyment of boating and watersports. From the luxury resort properties of Horseshoe Bay to the idyllic, peaceful lake homes in Kingsland, Lake LBJ offers investment opportunities for a wide variety of buyers. Lake LBJ's popularity and name recognition also mean it has some of the highest vacation rental prices – great for investors looking for a property with short-term rental potential.

Lake Austin

A go-to choice for sound real estate investment, Lake Austin has it all: location, location, and location! Just minutes away from downtown Austin, Lake Austin is an accessible escape destination for city dwellers. At the same time, the lake's proximity to Austin means you will still have access to all of the best restaurants, shops, entertainment, and nightlife the city offers. Lake Austin also boasts constant water levels and river-like bends, making it ideal for water sports and one of the best places with waterfront homes for sale in Texas. The waterfront homes for sale on Lake Austin are generally higher in price than other places on our list, with the average home selling for over $5 million. However, if you have the buying power to purchase on Lake Austin, it could be an excellent investment.

Final Take: Best Texas Lakes for Investment

There's a lot to love about each of the lakes on our list and different reasons to invest in particular communities. Ultimately, the best Texas lake is the one that fits your lifestyle and personal vision of lake living (or renting). The Lakefront Group can help you find your perfect investment property. We know the Texas lake lifestyle because we live it ourselves! Looking for Texas waterfront homes for sale? Check out our current lakehouse listings or contact us today to get special alerts about new listings.

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