Is San Antonio a good place to invest in real estate? Based on Mashvisor’s San Antonio real estate market 2020 analysis, the answer is yes. All of the trends and statistics point to the fact that buying property in San Antonio makes for a good real estate investment. Let’s take a look at the analysis to find out why and where you should invest in the San Antonio housing market.
Why Investing in the San Antonio Real Estate Market Is a Good Idea
Mashvisor found 8 real estate market trends that point to the fact that buying a house in San Antonio for investment will be profitable:
San Antonio’s Population Growth Ranked 2nd Largest in the US
The San Antonio, Texas real estate market is home to the 7th largest population in the US. Currently, there are around 1,547,253 residents in the city. Not only is the population large, but it is also growing. From July 2018 to July 2019, San Antonio experienced the second largest population growth in the nation. That marked 3 consecutive years where the city was among the leaders for population growth in the US.
Why should population growth matter to San Antonio real estate investors? Typically, a city that experiences strong population growth enjoys a strong economy with plenty of job opportunities that attract residents. This environment helps the local real estate market to thrive.
Related: Invest in 2020’s Fastest Growest Cities in the US
The Renter Population Is High
If you were to invest in San Antonio real estate today, you would find high demand for your long-term rental property. Currently, the renter population sits at 46.4%, according to NeighborhoodScout.
Mashvisor’s data also provides insight into the rental demand in the San Antonio real estate market. The price to rent ratio is 16. A price to rent ratio of 16 – 20 usually means that most residents in a housing market find it more affordable to rent than to buy a home (in many cases).
The Local Economy Is Diverse and Strong
As mentioned, strong population growth is usually accompanied by a strong economy which, in turn, supports a strong San Antonio real estate market. In general, San Antonio’s economy is quite diverse with healthcare and bioscience, aerospace, information technology and cybersecurity, and new energy economy ranking among the top industries. Tourism is also a large industry in San Antonio, with over 31 million visitors flooding into the city every year. Tourist spending has a great impact on the economy.
In recent years, San Antonio experienced some of the strongest economic growth in the nation. And although the economy has been hit by COVID-19 in 2020, recent data shows that the local unemployment rate has dropped and net jobs increased. Because of the strong foundation that the San Antonio economy sits on, experts expect it to rebound quickly after the coronavirus crisis.
San Antonio Home Prices Are Affordable
According to Mashvisor’s data, the median property price in the San Antonio real estate market is $305,058. Realtor.com reports that the median price for the US housing market is $342,000 for June 2020. In comparison, San Antonio homes for sale are more affordable on average. Considering that it’s one of the largest cities in the nation, being able to buy an investment property in such a location at an affordable price is a great real estate investment opportunity.
To find even more affordable homes for sale in San Antonio, use Mashvisor’s rental property finder. This tool allows you to find high return investment properties for sale within your budget. Take a look at the single family homes available now that are under 100k:
Try out this tool for yourself now for free!
Real Estate Has Historically Appreciated in San Antonio
How is the real estate market in San Antonio doing in terms of property values? Well, the coronavirus may cause a slight decrease in property values from now through 2021. However, a San Antonio real estate investment is likely to appreciate. Historically, San Antonio, TX real estate has appreciated by 119% from Q1 2000, at an annual average rate of around 4%. So buying and holding a San Antonio rental property will likely result in a good return on investment from real estate appreciation down the line.
San Antonio Is a Buyer’s Market
Is San Antonio a buyer’s or seller’s market? According to Zillow, it’s a cool buyer’s market. This means you won’t face much competition from other real estate investors or homebuyers and you will likely have the upper hand in negotiations.
However, some San Antonio investment properties for sale do receive multiple offers, according to the real estate brokerage company, Redfin. They give the market a Compete Score of 67 (somewhat competitive). At the same time, Redfin’s San Antonio real estate market data shows that homes sell for around 2% below the listing price.
Wondering about the competition you’ll face from other real estate investors in the San Antonio housing market? Mashvisor can offer some insight. For 2020, the San Antonio real estate market is among the 20 most searched cities on the platform. This shows us that there are lots of real estate investors looking to get their hands on a San Antonio income property this year.
To get access to our real estate investment tools, sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
Airbnb Is Legal in San Antonio
Most of the San Antonio real estate market trends we’ve covered in our analysis thus far have revolved around long-term rental properties. But we did mention that tourism is an important part of the economy. So you should know that buying Airbnb property in San Antonio can also make for a good real estate investment. Not only are there plenty of visitors to occupy Airbnb rental properties every year, but San Antonio is one of the few larger cities in the US that has not banned non-owner occupied Airbnbs.
Related: 50 Best Cities for Airbnb Rental Income in 2020
However, there are Airbnb regulations in the San Antonio real estate market that you need to be aware of. In 2018, the city passed a new Airbnb ordinance that would regulate short-term rental properties. Running a non-owner occupied Airbnb San Antonio investment would make your rental a Type 2 short-term rental (STR). To learn about some of the regulations that apply, click here.
A San Antonio Rental Property Generates a Good Return on Investment
Buying a San Antonio rental property will bring you a good return on investment, according to Mashvisor’s data:
- Traditional Rental Income: $1,596
- Traditional Cash on Cash Return: 0.9%
- Average Airbnb Daily Rate: $118
- Airbnb Rental Income: $2,031
- Airbnb Cash on Cash Return: 1.4%
- Airbnb Occupancy Rate: 49%
- Best Investment Property Type: Single Family Home
- Median Property Price: $303,519
- Price per Square Foot: $142
- Traditional Rental Income: $1,618
- Traditional Cash on Cash Return: 1.1%
- Airbnb Rental Income: $2,117
- Airbnb Cash on Cash Return: 2.0%
Mashvisor’s San Antonio real estate market statistics tell us the following about the profitability of a rental property in the city:
- Airbnb investment properties are more profitable than traditional, long-term rentals. (Mashvisor’s Airbnb data comes directly from Airbnb and our calculations are verified by real Airbnb hosts in the US)
- Although the average return on investment (ROI) for a long-term rental property in the San Antonio real estate market is low, there are plenty of neighborhoods where you can get a high ROI (see the next section).
- Single family homes for sale in San Antonio will offer the highest return on investment (either as Airbnbs or long-term rental properties) compared to other property types.
Related: 4 Tools for Finding Single Family Homes for Sale
Where to Invest in the San Antonio Real Estate Market in 2020
Now that you’ve reviewed our San Antonio market analysis for 2020, you know that Alamo City is a good place to invest in real estate. If you want to start your search for rental properties for sale, do so in the best San Antonio neighborhoods:
Best Neighborhoods in San Antonio for Investing in Airbnb Rentals
#1. North Central Thousand Oaks
- Median Property Price: $278,500
- Price per Square Foot: $129
- Average Airbnb Daily Rate: $144
- Airbnb Rental Income: $4,726
- Airbnb Cash on Cash Return: 10.0%
- Airbnb Occupancy Rate: 47%
#2. Huntington Place
- Median Property Price: $329,500
- Price per Square Foot: $104
- Average Airbnb Daily Rate: $150
- Airbnb Rental Income: $5,337
- Airbnb Cash on Cash Return: 9.4%
- Airbnb Occupancy Rate: 60%
#3. Brady Gardens
- Median Property Price: $91,667
- Price per Square Foot: $96
- Average Airbnb Daily Rate: $65
- Airbnb Rental Income: $1,797
- Airbnb Cash on Cash Return: 8.6%
- Airbnb Occupancy Rate: 56%
#4. Braun Willow Unit
- Median Property Price: $197,000
- Price per Square Foot: $113
- Average Airbnb Daily Rate: $150
- Airbnb Rental Income: $3,379
- Airbnb Cash on Cash Return: 8.3%
- Airbnb Occupancy Rate: 56%
#5. Riverside South
- Median Property Price: $275,560
- Price per Square Foot: $94
- Average Airbnb Daily Rate: $95
- Airbnb Rental Income: $2,106
- Airbnb Cash on Cash Return: 8.1%
- Airbnb Occupancy Rate: 50%
Best Neighborhoods in San Antonio for Investing in Long-Term Rentals
#1. North Central Thousand Oaks
- Median Property Price: $278,500
- Price per Square Foot: $129
- Price to Rent Ratio: 9
- Traditional Rental Income: $2,717
- Traditional Cash on Cash Return: 4.6%
#2. Braun Willow Unit
- Median Property Price: $197,000
- Price per Square Foot: $113
- Price to Rent Ratio: 8
- Traditional Rental Income: $1,964
- Traditional Cash on Cash Return: 3.9%
#3. Villa De San Antonio
- Median Property Price: $107,933
- Price per Square Foot: $113
- Price to Rent Ratio: 9
- Traditional Rental Income: $1,039
- Traditional Cash on Cash Return: 2.8%
#4. Brady Gardens
- Median Property Price: $91,667
- Price per Square Foot: $96
- Price to Rent Ratio: 10
- Traditional Rental Income: $785
- Traditional Cash on Cash Return: 1.8%
#5. Whisper Hollow-North Central Thousand Oaks
- Median Property Price: $290,500
- Price per Square Foot: $147
- Price to Rent Ratio: 13
- Traditional Rental Income: $1,848
- Traditional Cash on Cash Return: 1.8%
Find a San Antonio Investment Property for Sale Now
San Antonio real estate investing will deliver a good rate of return on rental property in 2020 and beyond. Just be sure to conduct an investment property analysis on every property you are considering buying. Sound like a lot of work? It’s not with Mashvisor. To start looking for and analyzing the best investment properties in San Antonio, click here.