San Antonio short term rental

13 Replies

Hello everyone. My son and his family live in San Antonio. Every time we visit we have to rent a hotel room. I want to buy/ invest in a vacation property that we can use as a short term rental. Currently, our budget is $100,000 which is our HELOC balance. Any suggestions as to the popular tourist areas that would make a good investment? My wife and I are going to visit in late July or early August so I would like to connect with a realtor or investor in the forum that can work with us in finding a property. We want to eventually move to SA, so we plan in buy more properties in the future. Thank you for your help.

Brandon definitely mentioned some popular places, but I have another thought for you to consider as well.
Basic training is at Lackland Air Force Base, and there is a graduation nearly every single weekend of the year. People come from every state to see their Airman graduate, and they fill hotels all across the town. In your price range, you could provide a comfortable place for families to stay that’s far closer to the base than the hotels. It would save families from trying to navigate San Antonio and make it to the events on time; It would allow them to spend more precious time with their graduate-because time with their sons and daughters and siblings and spouses is very limited on that weekend; and it would provide a year-round opportunity for you to keep the unit filled and cash flow.
I have already earmarked several properties for you… If you’d like to have a peek, just send me your email, and I would love to chat with you more about this strategy.

Is the 100,000 budgeted for purchasing cash and furnishing it?  Are you open to financing?  This will determine a lot.  I would imagine furnishings could cost a bit to do right.  All mine are long term rentals but I find this strategy interesting and will look forward to updates on what you decide.  Best of luck to you!

@Frank Boet

Superhost here, just wanted to chime in and say you are asking the RIGHT questions. When people are looking to buy a STR, I ask "why are people traveling to the area." This is going to help you stay booked and run a great STR. Congrats and good luck!

Originally posted by @Travis Rasmussen :

@Frank Boet

Superhost here, just wanted to chime in and say you are asking the RIGHT questions. When people are looking to buy a STR, I ask "why are people traveling to the area." This is going to help you stay booked and run a great STR. Congrats and good luck!

Hello Travis, from your experience as a STR, do you own condos, townhomes or single family homes? Are there issues with existing neighbors opposing STR? I know that it would bother me if a neighbor turned their home into a STR. An investor bought a home in our neighborhood and made it into an assisted living facility much to the chagrin of the neighbors directly surrounding the home. What size are your properties? Two bedrooms or larger?

@Frank Boet

Honestly, it depends. It goes back to the original questions--why are people traveling there. What market are you diving into and why?

Personally, what I invest in depends on the market. I was just looking up a market for a colleague and it is COMPLETELY DIFFERENT than what I am purchasing in my market. It really does go back to the original question--who is traveling there and why.

STR owner here. Some good points have been made already regarding the areas of town, but wanted to add some more thoughts to consider. Areas near downtown are not just good for tourism, but SA hosts multiple conventions every week. I met another STR the other day who has what would be considered a low-end home around downtown, yet he is perpetually booked just based on the demand to be close. And the conventions last 4-5 days which is great revenue. Also, as mentioned above, completely stocking a house from scratch is a lot more expensive than you may think as everything adds up and up and up; so make sure you are budgeting your investment cost with that in mind.

Lastly, there is pending legislation for STRs in SA that will be voted on in the next couple of months. I attended their last public meeting, and it doesn't look like they will be banning it altogether as many cities have done. It is still being modified but as of now, they will be limiting the density of STRs to 1 out of every 8 houses on each block face--if you don't get grandfathered in. In order to get grandfathered in, you need to be registered with the city before the ordinance goes into effect. Registering with the city also means you will need to start paying the City and County hotel taxes if you haven't already (around 11%), AND if you have already been in business they are saying that you will be charged the back taxes along with a penalty and interest. This is still fluid, but as of now, this is what the ordinance is looking like to be voted on.

Originally posted by @Jason S. :

STR owner here. Some good points have been made already regarding the areas of town, but wanted to add some more thoughts to consider. Areas near downtown are not just good for tourism, but SA hosts multiple conventions every week. I met another STR the other day who has what would be considered a low-end home around downtown, yet he is perpetually booked just based on the demand to be close. And the conventions last 4-5 days which is great revenue. Also, as mentioned above, completely stocking a house from scratch is a lot more expensive than you may think as everything adds up and up and up; so make sure you are budgeting your investment cost with that in mind.

Lastly, there is pending legislation for STRs in SA that will be voted on in the next couple of months. I attended their last public meeting, and it doesn't look like they will be banning it altogether as many cities have done. It is still being modified but as of now, they will be limiting the density of STRs to 1 out of every 8 houses on each block face--if you don't get grandfathered in. In order to get grandfathered in, you need to be registered with the city before the ordinance goes into effect. Registering with the city also means you will need to start paying the City and County hotel taxes if you haven't already (around 11%), AND if you have already been in business they are saying that you will be charged the back taxes along with a penalty and interest. This is still fluid, but as of now, this is what the ordinance is looking like to be voted on.

Hi Jason,

What type of property do you rent and would you mind giving me an idea of the area.  I'm trying to familiarize myself with San Antonio as much as possible using Zillow and Redfin. There are so many great areas like near the military bases, the Alamo, Downtown, Sea World, etc to invest in that I'm overwhelmed. Should I start off with a one bedroom condo, a 2 bedroom townhome or a 4 bedroom sfh? Just a lot of options out there.

I have a small single-family home (1000 sq ft), and it's in one of the areas mentioned :) Since you have so many options, I can see why it might feel overwhelming, but I don't think you can go wrong with any of them. The most important thing is that the numbers work. I'd look at the pricing on one of the sites and then correlate that with your purchase price. It's not like a regular rental, so you will need to have days for cleaning/turnover unless you can afford a service to do it in a couple of hours.

The type of home you get will just determine what type of client you'll attract. 1-bedroom condo might attract more business clients traveling solo (some of which stay for weeks and have an expense account), 2-bedroom might get more families on a budget, SFH might get more families more willing to spend. Because there is so much competition your prices need to be competitive, so I wouldn't go for anything too expensive on the far north/northwest side of town (personal opinion). I knew someone who tried to do it in a solid B neighborhood just north of Sea World and was losing money like crazy, so don't go too far out of the city center if you can. I know people with SFH that are doing amazing, and I also know someone with a condo near a gun range who is overflowing with bookings because of the specialized certifications they train for. Anywhere near downtown or around Fort Sam Houston or Lackland should also do well.

I can't speak to the NE side, but I think that might be decent as well. Home prices are still reasonable, and it might attract people who think Austin is so much cooler than SA and want to visit both cities.

Jason, that is awesome information! The HOA's are definitely going to play a big factor in my decision making. I think to be successful as a STR one has to stand out from the cookie cutter crowd. The key is to find a niche, like near that gun range, and to provide a "wow factor", like an in ground pool, game room, near a park, a natural preserve, etc. I have visited Airbnb.com and looked at a lot of properties for rent and many look alike. No wow factor. They mostly must compete on price if they don't have something special to offer guests, other than decor. I believe that in the hospitality business guests are looking for an "experience" not just a room and a bed. This is just my opinion.

Originally posted by @Jason S. :

STR owner here. Some good points have been made already regarding the areas of town, but wanted to add some more thoughts to consider. Areas near downtown are not just good for tourism, but SA hosts multiple conventions every week. I met another STR the other day who has what would be considered a low-end home around downtown, yet he is perpetually booked just based on the demand to be close. And the conventions last 4-5 days which is great revenue. Also, as mentioned above, completely stocking a house from scratch is a lot more expensive than you may think as everything adds up and up and up; so make sure you are budgeting your investment cost with that in mind.

Lastly, there is pending legislation for STRs in SA that will be voted on in the next couple of months. I attended their last public meeting, and it doesn't look like they will be banning it altogether as many cities have done. It is still being modified but as of now, they will be limiting the density of STRs to 1 out of every 8 houses on each block face--if you don't get grandfathered in. In order to get grandfathered in, you need to be registered with the city before the ordinance goes into effect. Registering with the city also means you will need to start paying the City and County hotel taxes if you haven't already (around 11%), AND if you have already been in business they are saying that you will be charged the back taxes along with a penalty and interest. This is still fluid, but as of now, this is what the ordinance is looking like to be voted on.

Interested to be looped in if you get any updates on the ordinances. Seems like a lot of 'limbo' from what I've read so far.