Although the short term rental industry has been booming for years, investors still need to ask themselves a couple of questions before buying an Airbnb investment property. Having a specific real estate market in mind helps the decision-making process. Today, we’re covering the Airbnb San Antonio market. Here’s what you need to know before choosing to invest in the San Antonio real estate market.
Airbnb Regulations in San Antonio
The first thing you should ask yourself: Is Airbnb legal in San Antonio? Yes, it is. However, the San Antonio City Council did pass an ordinance last year which lightly regulated short term rentals in the city. This was the first attempt by the city to regulate short term rentals.
Here are the key takeaways:
- Short term rental operators must register with the city, paying a $100 fee. Hosts have to renew this license every three years, again paying the $100 fee.
- There is a limit on the amount of non-owner occupied property that can exist in a certain area. The city refers to these Airbnbs in dwelling units other than a primary residence as “type 2” short term rental properties. In residential zones, the limit is set to 12.5 percent of the block’s housing inventory. In a multi-family home with 8 units or less, only one type 2 property is permitted.
- Owner-occupied short term rentals, or type 1 properties, are allowed anywhere as long as the host is living in the rental property.
- Hosts cannot provide their guests with food or drink. Hosting large events in your Airbnb rental is also prohibited.
- Short term rental operators are responsible for collecting San Antonio occupancy taxes from their guests. There is also a state and county tax, and while hosts are responsible for city and county taxes, Airbnb collects the state tax on behalf of its San Antonio hosts.
Some Pushback on Regulations
While San Antonio only has light regulations on short term rentals, other cities in the Texas real estate market have taken on a different approach; Austin, for example, has very strict restrictions on Airbnb rentals. Because of this, a new group of people backing the short term rental industry in the state is pushing for Texas legislature to turn over any local ordinances and set one statewide law.
Senate Bill 1888 and House Bill 3778 are two bills pushing for this, detailing a limit on how far cities can go when regulating short term rentals. Because the vacation rental industry generates strong economic activity across the state, these bills were proposed so over-regulation doesn’t hurt that boost in the Texas economy.
Related: All You Need to Know About San Antonio Airbnb Laws
With so many cities nationwide banning Airbnb non-owner occupied rentals, it would seem that investing in Airbnb San Antonio is a good idea thanks to the relatively lenient regulations in place. Still, the regulations are only one part of the story.
The 5 Best Neighborhoods in San Antonio for Airbnb
Now that you know how to legally move forward with an Airbnb San Antonio investment property, it’s time to look at how these San Antonio real estate investments perform. Mashvisor’s data on Airbnb rental property returns gives real estate investors the green light to move on the San Antonio housing market!
Here’s where you should start searching for your best chances at a successful and profitable Airbnb San Antonio investment property:
1) Northwest Los Angeles Heights
- Median Property Price: $156,325
- Price per Square Foot: $110
- Monthly Airbnb Rental Income: $3,256
- Airbnb Cash on Cash Return: 13%
- Airbnb Occupancy Rate: 57%
2) Prospect Hill
- Median Property Price: $146,013
- Price per Square Foot: $104
- Monthly Airbnb Rental Income: $2,359
- Airbnb Cash on Cash Return: 12%
- Airbnb Occupancy Rate: 49%
3) Stablewood-Valley Hi North
- Median Property Price: $137,271
- Price per Square Foot: $107
- Monthly Airbnb Rental Income: $3,081
- Airbnb Cash on Cash Return: 12%
- Airbnb Occupancy Rate: 61%
4) Five Points
- Median Property Price: $219,629
- Price per Square Foot: $102
- Monthly Airbnb Rental Income: $2,325
- Airbnb Cash on Cash Return: 9%
- Airbnb Occupancy Rate: 65%
5) Woods of Shavano
- Median Property Price: $277,763
- Price per Square Foot: $130
- Monthly Airbnb Rental Income: $4,994
- Airbnb Cash on Cash Return: 9%
- Airbnb Occupancy Rate: 65%
Owning an Airbnb in the San Antonio real estate market is a smart investment decision. These are just five out of the many neighborhoods experiencing positive Airbnb rental property performance. Start looking for and analyzing investment properties for Airbnb San Antonio:
Other Trends in the San Antonio Real Estate Market
So, what else should real estate investors know about this market before investing in Airbnb San Antonio? Some key real estate market trends will give you a better idea of the city’s housing market condition. Here are a couple of other things you should know, as they can affect your decision when investing in San Antonio vacation rentals.
House Price Trends
According to Mashvisor’s data, the current median property price for San Antonio real estate is $288,237. Last year, that median was $225,600 (a 5 percent increase from 2017). San Antonio housing prices are projected to rise by 3.3 percent by the end of 2019.
Real Estate Appreciation Trends
According to Zillow, San Antonio home values have appreciated at a rate of 5.7 percent over the past year. It is a hot seller’s market and as buyer demand continues to push the market value up, the median home value in San Antonio is expected to increase by another 2.8 percent.
Home Sales
The San Antonio Board of Realtors reported a 4 percent annual increase in home sales for 2018. A total of 32,000 homes were sold in the metro San Antonio real estate market last year. Although housing inventory was tight and continues to be, buyers are still very active in the market.
For real estate investors interested in purchasing an investment property for Airbnb San Antonio, it seems homes priced between $200k and $500k have the highest buyer demand as this category of properties had the largest share of home sales (55 percent).
Airbnb San Antonio Stats
Bexar County, where the Airbnb San Antonio rental market is located, generated close to $28 million in rental income last year. With the greater San Antonio region hosting 420,000 guests, there’s definitely a strong short term rental market there. It will continue to cater to the strong tourist industry in San Antonio. When looking at average Airbnb San Antonio rental property performance, this is what Mashvisor’s data tells us:
- Monthly Airbnb Rental Income: $2,737
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 54%
Those are very strong numbers for the citywide average. The San Antonio housing market has plenty of Airbnb investment opportunities.