What It Costs to Build a Fourplex in Texas in 2026, and Why Most Investors Buy One Instead

Every month someone in Texas prices a fourplex. The logic is sound: four rents on one lot, one roof, one loan, and if you live in a unit the other three pay for it. The question is whether to build one or buy one, and the answer in 2026 is clearer than most people expect. We ran the numbers the way a construction lender would, with the state’s own rents, and the result is the one every experienced small-multifamily investor on the forums has been saying: build only when you cannot buy.

The figures below are the typical case from Neur’s Capital Projects engine for a four-unit building in Texas, with a low and a high case where they matter. Costs are 2025 and 2026 published benchmarks; the rent is the Census median for Texas with the premium a new building gets over the stock. Every input is listed at the end.

What it costs

The construction line is the one to argue about. It assumes $185,000 a unit, which is 1,000 to 1,200 square feet at $150 to $210 per square foot. The National Association of Home Builders put the average single-family build at $162 per square foot in its 2024 survey, before land. In the Texas and Florida builder threads this year, duplex quotes have run from $205 to $300 a square foot, with one general contractor telling a South Florida owner that $250 to $300 "should be closer to 205 to 225." A builder who will do 1,100 square feet at $170 puts you in the typical case. One who insists on $250 puts you in the high case, and the high case does not work under any rent in this state.

Land is the second argument. The typical case assumes 15% of total cost, about $166,000, which is a duplex-zoned lot in a Texas suburb. A lot that is already entitled for four units with utilities at the street is worth paying more for; a cheap lot that needs a zoning case is not cheap.

What it earns

The Texas median gross rent in the latest Census survey is $1,339 a month. A new building leases above the stock, and the usual band for a new duplex or fourplex is 1.15 to 1.45 times the median, because it competes with houses, not with garden apartments. That gives a typical new-build rent of $1,741 a unit.

Four units at $1,741 is $83,600 a year of potential rent. Take 5% vacancy and you have $79,400 collected. Take 40% for operating costs, which in Texas means property tax at roughly 2% of value, insurance that runs $1,500 to $3,000 a unit on the Gulf Coast, maintenance, reserves and management if you hire it, and the building nets $47,600 a year.

That is a 4.3% yield on cost. Four-unit buildings in Texas trade at about a 6.75% cap rate, so an appraiser capitalizing that income values the finished building at about $706,000. You would have spent $1.1 million to build something worth $706,000.

This is the line that decides it. Richard Golding, a builder-investor on BiggerPockets, put it this way in May: "When you build new, you are paying retail for everything," and "the completed duplex will likely appraise for less than it cost you to build it." Another investor in the same thread: new construction is "10 to 50% more than existing, sometimes 100% more but rarely if ever less."

The investor case

A DSCR lender sizes the loan on the rent, not on your income. At 7.25% over 30 years and 1.25 times coverage, $47,600 of net income supports about $466,000 of debt. That is 42% of the cost. The other $640,000 is your cash.

On that cash the building returns $3,600 in year one after the loan payment. Over a seven-year hold with 3% rent growth and a sale at a 7% cap, the equity comes back at 0.76 times what went in. No investor builds that. The rent at which building pays, meaning a yield on cost of about 8% against a 6.75% exit, is $3,333 a unit, which is 2.5 times the state median. There are Texas submarkets where a new 1,100-square-foot unit rents for $2,400; there are none where it rents for $3,300.

The live-in case

Living in one unit changes the lender, and that is what makes house hacking work on a building that does not pencil for an investor. FHA lends on a one-to-four-unit building you occupy with 3.5% down. Fannie Mae has allowed 5% down on owner-occupied two-to-four-unit buildings since November 2023, and a VA loan is zero down for an eligible veteran. The 2026 FHA floor limit for four units is $1,041,125, enough for this building.

Two things catch people. First, the loan is sized on the appraised value, about $706,000 here, so FHA lends about $529,000 and the rest of the $1.1 million is your cash: roughly $577,000 at closing, not 3.5% of anything. The cheaper the build relative to the appraisal, the smaller that gap, which is why the live-in case rewards the owner who gets the $170-a-foot quote. Second, for three and four units FHA applies the self-sufficiency test: 75% of the market rent of all four units, yours included, has to cover the whole payment with taxes, insurance and mortgage insurance. On this building the test, not the loan limit, is what caps the loan.

With three tenants at $1,741, the building nets $35,700 a year after vacancy, taxes, insurance, upkeep and reserves, against a loan payment of about $40,100. The tenants cover 89% of it. You live in a new unit for about $370 a month, and if you move out in a few years and rent the fourth unit, the building carries itself. That is a tight but real outcome, and it is the only version of a new fourplex in Texas that the numbers support at the state’s rents.

When building beats buying

Texas permitted 6,356 units in duplexes and 2,777 units in three- and four-unit buildings in 2025, against 140,579 single-family homes and 60,505 apartment units. Almost nobody builds this product, which is the point: the existing two-to-four-unit stock is old, and in many smaller Texas cities there is none for sale. Building makes sense in four situations, and the Capital Projects screen tests each of them for an address:

1. 1There is nothing to buy. In a town of 20,000 with three duplexes listed a year, the alternative to building is not buying, it is not owning. The screen reads the county’s permit history and its two-to-four-unit stock.
2. 2Land is cheap. At $60,000 for the lot instead of $166,000, the typical case drops to about $1.0 million and the gap between cost and value narrows by a third. Land above 20% of cost is where professionals walk away.
3. 3Rents are well above the state median. At $2,400 a unit the investor case still falls short, but the live-in case covers 120% of the payment and the building cash-flows from the first month you move out.
4. 4You will live there and you got the right quote. $170 a square foot and a 95% construction-to-permanent loan turn a $577,000 closing into something closer to $150,000.

If none of the four is true, buy the existing fourplex. It is cheaper per unit, it appraises on comparable sales rather than on your cost, it rents in weeks rather than in fourteen months, and the FHA and Fannie Mae rules work on it the same way.

Run it for your address

The statewide case is the ceiling, not your answer. Neur’s Capital Projects screen runs this same model on your county’s rents, permits, jobs and renter incomes, with the traffic count and FEMA flood zone at the parcel if you give it a street address, the loan a lender would size, the cash you need, who has lent on buildings like this in the county, and the tests developers run before they commit. It costs $299, saves with a PDF, and re-runs for free as you change the size, the land price or the builder’s number. Start at neur.co/capital, or see the statewide figures for apartments, hotels, storage and retail in every state at neur.co/build.