Fredericksburg, TX - Short Term Rentals (AirBNB/VRBO)
New to Real Estate · Los Angeles · Member since 2021 · 9 posts · 1 vote
Fredericksburg, TX - Short Term Rentals (AirBNB/VRBO)
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Rental Property Investor · Houston, TX · Member since 2021 · 11 posts · 10 votes
3yCurrent STR owner in Fredericksburg. I used Stacey Lancaster (she's pretty active on Bigger Pockets) and she was fantastic. 10/10 would recommend to a friend. She specifically does a lot of STRs, so I believe she's the go-to in the area.
As for Fredericksburg itself, I agree with @Evan Tuuk. I would look at the zoning map when purchasing a house in Fredericksburg. Our house is in the R2 zone (4 blocks off main) and the process to transfer the permit back in March was a breeze. I will say that from my discussions with the City during my due diligence, they really seem to be cracking down quite a bit on STRs. You can find the latest and greatest ordinances here. There's also a STR Alliance in Fredericksburg that works with the city. I believe when I was checking with the city, they were proposing a few more new changes. I can't remember exactly, but I believe the main ones had to do with additional parking restrictions and water. Water had to do more with pools and hot tubs. They were cracking down on how often you can use city water to refill them. Doesn't affect us, but it would affect anyone with a hot tub because it would really hinder your ability to refill it. If you wanted to refill it more than the city allows, you would have to get private water to come to your house. My best piece of advice is to buy a house with an existing permit. Even when we got ours transferred, they were super strict when it came time to an inspection. We passed, but even little things like string lights or not having a grate over the fire pit were big concerns.
Overall the numbers in Fredericksburg are staying the same compared to 2022 in my experience. The extremely hot summer has subdued the demand this month though. I would buy again if I had the chance.
Why I choose Fredericksburg?
- regional / drivable destination (I've personally rented out a bunch of Airbnbs here)
- already established STR laws (while very strict, they have shown to grandfather in permits and haven't proposed a flat out ban that would also retroactively take away permits)
- Fredericksburg also fights new hotels just as hard as STRs. This is why you don't see a bunch of national chains near main street
- numbers made sense compared to other regional destinations (Gulf Shores, Smokey Mountains, Galveston, ect.)
9 Replies
- Member since 2021 · 32 posts · 13 votes3y
Hey @Michael Le Blanc,
I live in Fredericksburg. I would definitely suggest looking up the new ordinances that have been put in place here. STR regulations have been a VERY hot topic here for the last year (and even beforehand). There is a very strong effort to ban them completely from R1 zoned areas which has made it very difficult to apply for a permit unless you buy a house which currently has a permit in place. (You can find the zoning map online.) But they are working hard to try and make the permits non-transferable. I'll try and remember to look on the city's website for a copy of the new ordinances.
The ordinances only apply to city limits currently so you're probably fairly "safe" in the county. It is a very saturated market here as well so definitely worth really digging in to the numbers and finding as many owners here to talk with beforehand. If you're going to make money here your place has to be really well done. You used to be able to just put your place up and you'd make money but that's definitely changed. I don't have an STR myself but have helped a friend set up and manage a couple last year and it's not as simple as it used to be.
That said, Anna Wynn-Smith and Brittany Horton with Portfolio are really good. They know the market and will really go to bat for you.
There are a few thoughts for you for what it’s worth!
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Austin and it’s surrounding is on the top three list for highest decline and short term rental revenue. Think thrice before buying one of these.
- Rental Property Investor · Houston, TX · Member since 2021 · 11 posts · 10 votes3y
Current STR owner in Fredericksburg. I used Stacey Lancaster (she's pretty active on Bigger Pockets) and she was fantastic. 10/10 would recommend to a friend. She specifically does a lot of STRs, so I believe she's the go-to in the area.
As for Fredericksburg itself, I agree with @Evan Tuuk. I would look at the zoning map when purchasing a house in Fredericksburg. Our house is in the R2 zone (4 blocks off main) and the process to transfer the permit back in March was a breeze. I will say that from my discussions with the City during my due diligence, they really seem to be cracking down quite a bit on STRs. You can find the latest and greatest ordinances here. There's also a STR Alliance in Fredericksburg that works with the city. I believe when I was checking with the city, they were proposing a few more new changes. I can't remember exactly, but I believe the main ones had to do with additional parking restrictions and water. Water had to do more with pools and hot tubs. They were cracking down on how often you can use city water to refill them. Doesn't affect us, but it would affect anyone with a hot tub because it would really hinder your ability to refill it. If you wanted to refill it more than the city allows, you would have to get private water to come to your house. My best piece of advice is to buy a house with an existing permit. Even when we got ours transferred, they were super strict when it came time to an inspection. We passed, but even little things like string lights or not having a grate over the fire pit were big concerns.
Overall the numbers in Fredericksburg are staying the same compared to 2022 in my experience. The extremely hot summer has subdued the demand this month though. I would buy again if I had the chance.
Why I choose Fredericksburg?- regional / drivable destination (I've personally rented out a bunch of Airbnbs here)
- already established STR laws (while very strict, they have shown to grandfather in permits and haven't proposed a flat out ban that would also retroactively take away permits)
- Fredericksburg also fights new hotels just as hard as STRs. This is why you don't see a bunch of national chains near main street
- numbers made sense compared to other regional destinations (Gulf Shores, Smokey Mountains, Galveston, ect.)
- New to Real Estate · Los Angeles · Member since 2021 · 9 posts · 1 vote3y
Fantastic - I appreciate the insight - thanks @Ian Fortney!
- New to Real Estate · Los Angeles · Member since 2021 · 9 posts · 1 vote3y
Thanks @Evan Tuuk!
Quote from @Evan Tuuk:
Hey @Michael Le Blanc,
I live in Fredericksburg. I would definitely suggest looking up the new ordinances that have been put in place here. STR regulations have been a VERY hot topic here for the last year (and even beforehand). There is a very strong effort to ban them completely from R1 zoned areas which has made it very difficult to apply for a permit unless you buy a house which currently has a permit in place. (You can find the zoning map online.) But they are working hard to try and make the permits non-transferable. I'll try and remember to look on the city's website for a copy of the new ordinances.
The ordinances only apply to city limits currently so you're probably fairly "safe" in the county. It is a very saturated market here as well so definitely worth really digging in to the numbers and finding as many owners here to talk with beforehand. If you're going to make money here your place has to be really well done. You used to be able to just put your place up and you'd make money but that's definitely changed. I don't have an STR myself but have helped a friend set up and manage a couple last year and it's not as simple as it used to be.
That said, Anna Wynn-Smith and Brittany Horton with Portfolio are really good. They know the market and will really go to bat for you.
There are a few thoughts for you for what it’s worth!
- Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes3y
Stacey Lancaster for SURE!!!
- 3yRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Quote from @Ian Fortney:
Current STR owner in Fredericksburg. I used Stacey Lancaster (she's pretty active on Bigger Pockets) and she was fantastic. 10/10 would recommend to a friend. She specifically does a lot of STRs, so I believe she's the go-to in the area.
As for Fredericksburg itself, I agree with @Evan Tuuk. I would look at the zoning map when purchasing a house in Fredericksburg. Our house is in the R2 zone (4 blocks off main) and the process to transfer the permit back in March was a breeze. I will say that from my discussions with the City during my due diligence, they really seem to be cracking down quite a bit on STRs. You can find the latest and greatest ordinances here. There's also a STR Alliance in Fredericksburg that works with the city. I believe when I was checking with the city, they were proposing a few more new changes. I can't remember exactly, but I believe the main ones had to do with additional parking restrictions and water. Water had to do more with pools and hot tubs. They were cracking down on how often you can use city water to refill them. Doesn't affect us, but it would affect anyone with a hot tub because it would really hinder your ability to refill it. If you wanted to refill it more than the city allows, you would have to get private water to come to your house. My best piece of advice is to buy a house with an existing permit. Even when we got ours transferred, they were super strict when it came time to an inspection. We passed, but even little things like string lights or not having a grate over the fire pit were big concerns.
Overall the numbers in Fredericksburg are staying the same compared to 2022 in my experience. The extremely hot summer has subdued the demand this month though. I would buy again if I had the chance.
Why I choose Fredericksburg?- regional / drivable destination (I've personally rented out a bunch of Airbnbs here)
- already established STR laws (while very strict, they have shown to grandfather in permits and haven't proposed a flat out ban that would also retroactively take away permits)
- Fredericksburg also fights new hotels just as hard as STRs. This is why you don't see a bunch of national chains near main street
- numbers made sense compared to other regional destinations (Gulf Shores, Smokey Mountains, Galveston, ect.)
Great stuff - this type of regulation is somewhat counter-intuitively a lot better for investors than currently less regulated markets (where you don't know what could change dramatically in the future). Sounds like if you know and follow the rules you should not only be OK but pretty well insulated from competition (people swarming in and oversaturating)
Harpoon Capital514 Reviews - Rental Property Investor · Houston, TX · Member since 2021 · 11 posts · 10 votes3y
Totally agree @Robin Simon. Could you imagine having a bunch of STRs in Dallas and then the city randomly pulling the rug out from you?
For those who don't know, Dallas had a wide sweeping ban with no exceptions
- 1yRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Quote from @Ian Fortney:
Totally agree @Robin Simon. Could you imagine having a bunch of STRs in Dallas and then the city randomly pulling the rug out from you?
For those who don't know, Dallas had a wide sweeping ban with no exceptions
It sounds like Dallas eventually backed off this ban before implementation. My prediction that these "bans" and regulations are all going to pretty much converge into reasonable middle ground regulations (mostly including taxes fees) is still looking very good. I thinik a lot of municipalities are going to face money issues now and in the next few years where it will be too counterproductive to ban STRs (even if thats what the particular constituency wants) and give up the revenue
Harpoon Capital514 Reviews
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