Things are looking really good for the San Antonio real estate market this year. So, if you’re interested in buying an investment property in this city, you’ll want to know why and where to invest.
Why a San Antonio Real Estate Investment Is Smart
It’s been going strong for a couple of years, and the market’s attractiveness for real estate investors continues in 2019. A strong economy coupled with a modest cost of living draws in one of San Antonio’s biggest renter groups- retirees. The steady job growth is constantly bringing in new residents to the city, which raise the demand for rental properties in the San Antonio real estate market. To understand how and why San Antonio properties are a solid choice for your next investment, check out these market trends.
San Antonio Real Estate Market Trends
- According to Zillow, home values have gone up 7 percent over this past year and are expected to increase another 3.3 percent within the next year. The current median home value in the San Antonio real estate market is $176,800. Both homebuyers and investors are picking up on the real estate opportunities here and the competition is strong as the market continues to heat up.
- As San Antonio has one of the fastest growing economies in the country, the job growth in the area is a really great driving force for its strong real estate market. With the technology and cybersecurity sectors specifically drawing more and more people to the city, investors will want to take advantage of this migration. 54 percent of San Antonio’s residents are homeowners, and the rest of the population prefer to rent.
- Appreciation of San Antonio real estate properties over the past ten years has been 44.26 percent. With the past year’s appreciation coming in at 5.82 percent, San Antonio real estate is appreciating at around the national average rate.
Related: How to Stay on Top of Real Estate Market Trends
Airbnb Regulations in San Antonio, Texas
When researching any real estate market, it’s important to look up the local laws. This is true especially when talking about Airbnb San Antonio. Is Airbnb legal in San Antonio? Yes, but…
Last year, the San Antonio city council passed a law which will regulate short-term rentals in the area for the first time. Included in these new regulations is the requirement of short-term rental operators to register with San Antonio and pay a $100 fee. A renewal fee of $100 is also required every three years.
The important part of the new ordinance is the one pertaining to “type 2” short-term rentals. Type 2 rentals are non-owner occupied rentals. They are rented out for short terms without the owner present, which is typically the case for real estate investors. Only one type 2 rental is allowed in a multi-family home with fewer than eight units. In larger multifamily properties and in residential zones, type 2 rentals are limited to 12.5 percent of housing.
You can’t forget about the taxes. Short-term rental operators are responsible for collecting San Antonio hotel occupancy taxes from guests and paying them to the city. They are also required to pay state and lodging taxes, but Airbnb collects the state occupancy tax on behalf of its short-term rental hosts. The regulations on short-term rentals in the San Antonio real estate market are not too restrictive, but you should make sure to comply with them if you want a successful Airbnb investment.
Related: Top 3 Cities in the US with Strict Airbnb Regulations
Where to Invest in the San Antonio Real Estate Market
Using Mashvisor’s investment property calculator, we’ve compiled a summary of San Antonio investment property performance. First, our data will give you an idea of the kind of return on investment San Antonio real estate investors can expect with both traditional rentals and Airbnb rentals in this market. Then we’ll break it down to the neighborhood level so you know exactly where your best chance for high returns in the San Antonio real estate market lies.
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San Antonio Housing Market 2019
- Median Property Price: $303,076
- Price per Square Foot: $136
- Price to Rent Ratio: 15
- Average Days on Market: 73
- Monthly Traditional Rental Income: $1,637
- Traditional Cash on Cash Return: 1%
- Monthly Airbnb Rental Income: $2,428
- Airbnb Cash on Cash Return: 3%
- Airbnb Occupancy Rate: 52%
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Because real estate investing is a local business, we’re going to narrow down the data and give you a list of the top neighborhoods for rental property performance based on rental strategy.
Related: Rental Strategy 101: A Beginner Investor’s Guide
Best Neighborhoods in San Antonio: Airbnb Rentals
Canyon Creek Bluffs
- Median Property Price: $291,000
- Price per Square Foot: $131
- Price to Rent Ratio: 14
- Average Days on Market: 41
- Monthly Airbnb Rental Income: $6,902
- Airbnb Cash on Cash Return: 13%
- Airbnb Occupancy Rate: 40%
United Westwood
- Median Property Price: $101,950
- Price per Square Foot: $87
- Price to Rent Ratio: 11
- Average Days on Market: 65
- Monthly Airbnb Rental Income: $2,539
- Airbnb Cash on Cash Return: 13%
- Airbnb Occupancy Rate: 69%
Hart Ranch Unit One
- Median Property Price: $289,280
- Price per Square Foot: $114
- Price to Rent Ratio: 13
- Average Days on Market: 105
- Monthly Airbnb Rental Income: $5,014
- Airbnb Cash on Cash Return: 10%
- Airbnb Occupancy Rate: 63%
Best Neighborhoods in San Antonio: Traditional Rentals
Artesia Community Guild
- Median Property Price: $115,000
- Price per Square Foot: $97
- Price to Rent Ratio: 6
- Average Days on Market: 112
- Monthly Traditional Rental Income: $1,530
- Traditional Cash on Cash Return: 7%
Five Points
- Median Property Price: $388,300
- Price per Square Foot: $134
- Price to Rent Ratio: 24
- Average Days on Market: 198
- Monthly Traditional Rental Income: $1,325
- Traditional Cash on Cash Return: 4%
People Active in Community Effort
- Median Property Price: $103,333
- Price per Square Foot: $100
- Price to Rent Ratio: 8
- Average Days on Market: 21
- Monthly Traditional Rental Income: $1,111
- Traditional Cash on Cash Return: 4%
These are some very impressive predictive analytics and stats for rental property performance in the San Antonio real estate market. You’re definitely going to want to take advantage of the real estate opportunity here. To start searching for San Antonio houses for sale right now, click here.