Key Insights for Investors
By Bruce X. Forey
San Antonio’s real estate market has always been fueled by its rich history, booming tourism, and strong job growth. But in recent years, short-term rentals (STRs) have become one of the most talked-about investment opportunities in the city. Whether you’re an investor looking to capitalize on the trend or a homeowner considering listing your property, it’s important to understand how the STR market is evolving, the challenges that come with it, and how to make your rental stand out.
Tourism and Demand: Why STRs Are Thriving
San Antonio is a top travel destination—and it’s not just for the River Walk and the Alamo. Fiesta, Spurs games, major conventions, and a year-round warm climate make the city a go-to for visitors. This steady demand has shifted the way people look for lodging, with more travelers choosing Airbnb and Vrbo over traditional hotels.
STRs aren’t just booming downtown. Southtown, the Pearl District, Alamo Heights, and even the suburbs are seeing an influx of short-term rental activity, as guests seek out more authentic, home-like stays while visiting the city.
The Rules: What Investors Need to Know
With growth comes regulation, and San Antonio has several rules short-term rentals must follow. The city classifies STRs into two categories: Type 1 (Owner-Occupied): These are homes where the owner lives on-site and rents out a portion of their residence. Type 2 (Non-Owner-Occupied): These are full-time investment properties used exclusively for short-term stays.
If you’re considering an STR investment, check zoning laws, secure permits, and be aware of HOA restrictions. Some neighborhoods limit the number of STRs allowed or prohibit them entirely. Violating these rules can result in hefty fines, so compliance is crucial. Go to SA.gov and search Short Term Rentals to learn more.
Taxes
Beginning March 10, 2025, platforms like Airbnb, VRBO, and HomeAway will automatically collect and remit the Hotel Occupancy Tax (HOT) to the city on behalf of STR operators. If you rent through other means, you’ll need to handle tax payments yourself. Staying informed on tax obligations is just as important as keeping your listing booked.
ROI Potential
San Antonio’s real estate market is more affordable than Austin or Dallas, making it a great place to buy an investment property. Before diving in, run the numbers. What’s the nightly rate in your area? STRs in prime locations can demand higher rates. What’s the occupancy rate? Seasonality affects bookings, so consider pricing adjustments.
What’s your budget? Aside from buying the property, furnishings, cleaning, management fees, and maintenance add up. Some investors choose to self-manage their rentals, while others hire STR management companies to handle bookings, guest interactions, and maintenance. Either way, attention to detail and great hospitality make all the difference in maximizing profitability.
Standing Out in a Crowded Market
With more STRs hitting the market, first impressions matter more than ever. High-quality photos are essential. A professional real estate photographer can showcase your space in the best light. Write a compelling listing description by highlighting unique features—proximity to nightlife, a chef’s kitchen, pet-friendly accommodations, or a private pool. Guests love extras like luxury bedding, high-end coffee makers, and spa-like toiletries. Be responsive and provide top-tier service. Fast communication and thoughtful touches (like a local guidebook) help earn those five-star reviews.
Community Impact
While STRs can be profitable for investors, not everyone is thrilled about having them in their neighborhood. Some San Antonio residents argue that short-term rentals drive up housing costs and reducing long-term rental availability. Others worry about noise, parties, and transient guests disrupting quiet neighborhoods. At the same time, local businesses benefit from increased foot traffic, as STR guests often explore surrounding restaurants, shops, and attractions. The key to sustainable STR growth is balancing community interests with responsible investment practices.
What’s Next for STRs in San Antonio?
San Antonio’s STR market isn’t slowing down. As the city grows, more investors are entering the game. With business travel picking up and the rise of the mobile population seeking furnished, short-term housing, STR’s offer exciting investment potential. Tech-driven pricing strategies are improving profitability. Smart investors are using data-driven tools to maximize earnings.
If you’re considering an STR investment in San Antonio, now is the time to do your research, ensure compliance, and create a guest experience that stands out.
Bruce is a skilled real estate agent serving 78209 and beyond. He enjoys helping client’s market and sell their property, find a dream home or discover investment opportunities. He has advanced training as a luxury homes specialist, with pricing strategies, residential home inspection for real estate agents, and military relocation. Learn more at bruceXforey.com, social media, or email: bruce@bruceforey.com
