STR market- north Las Vegas vs San Antonio

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STR market- north Las Vegas vs San Antonio

Kanika Jain
Member since 2024 · 15 posts · 11 votes

Hi

I am torn between two STR markets- North Las Vegas or San Antonio. Can someone help me understand which one is better in terms of ROI for a 4 bedroom SFH.

Thanks,

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Michael Baum:

Hey @Kanika Jain, so Las Vegas can be a real difficult place to have a STR. Most of the regs prohibit it within the city, so I would check and see if the area you are looking allow it.

Your best bet is to look at the markets on VRBO and AirBNB and see what is out there right now. What do their calendars look like, what is their nightly rate and amenities they offer.

Look at the pricing of places you are interested in and run some numbers.


for get STR in Vegas go mid term rental  those will bring in basically as much if not more than STR with not nearly the hassle and  such.. STR is a business/ job  .. if your looking for that I guess its OK.. but if you want more passive with stellar returns.. Look at Summerlin and MTR.
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  • Stephen DeThample
    Real Estate Agent · Las Vegas, NV · Member since 2020 · 461 posts · 305 votes
    2y

    Use the short term rental calculator on BiggerPockets to help you compare properties. 

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    2y

    Hey @Kanika Jain, so Las Vegas can be a real difficult place to have a STR. Most of the regs prohibit it within the city, so I would check and see if the area you are looking allow it.

    Your best bet is to look at the markets on VRBO and AirBNB and see what is out there right now. What do their calendars look like, what is their nightly rate and amenities they offer.

    Look at the pricing of places you are interested in and run some numbers.

    2Reply
  • Jeremy R.Business Member
    Property Manager · San Antonio, TX · Member since 2024 · 38 posts · 15 votes
    2y

    Hi @Kanika Jain, I operate about 20 STR properties in San Antonio and would be happy to discuss the market with you.

    [email protected]210-934-5318
    Five Star Vacation Home Rentals5197 Reviews
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    2Reply
  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 717 votes
    2y

    @Kanika Jain

    Also consider how you will manage the day to day and long term of property inspections. Can you get to either market and back home easily? Also consider the property taxes in TX vs NV. NV has the 4th lowest property taxes in the nation and do not reassess on the sale. I also agree the STR regulations in Vegas are not easy to work with. I'm in the Reno, NV market and it's much friendlier for investing in STRs in NV.

    0Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    What process brought you to those 2 markets as finalists?

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Michael Baum:

    Hey @Kanika Jain, so Las Vegas can be a real difficult place to have a STR. Most of the regs prohibit it within the city, so I would check and see if the area you are looking allow it.

    Your best bet is to look at the markets on VRBO and AirBNB and see what is out there right now. What do their calendars look like, what is their nightly rate and amenities they offer.

    Look at the pricing of places you are interested in and run some numbers.


    for get STR in Vegas go mid term rental  those will bring in basically as much if not more than STR with not nearly the hassle and  such.. STR is a business/ job  .. if your looking for that I guess its OK.. but if you want more passive with stellar returns.. Look at Summerlin and MTR.
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Savannah Holzer
    Lender · Austin, TX · Member since 2023 · 233 posts · 96 votes
    2y

    Hey Kanika, both North Las Vegas and San Antonio are good markets for short-term rentals, but they attract different types of visitors. North Las Vegas has high demand because of its proximity to the Strip, but regulations can be stricter. San Antonio offers more relaxed rules, steady tourism, and possibly lower property costs. You should compare property prices, local rules, and how often homes are rented to see which market might give you a better return.

    0Reply
  • Eric FernwoodBusiness Member
    Realtor · Las Vegas, NV · Member since 2014 · 998 posts · 1k+ votes
    1y

    Hello @Kanika Jain,

    I will compare Las Vegas and San Antonio net income and future rent and price growth.

    Net Income

    It's not about how much you gross but how much you net. When choosing an investment city, don't rely solely on simple return calculations; consider all major recurring costs. Property taxes and insurance are typically the two biggest recurring costs. Below is a comparison of Texas and Nevada.


    Sources for insurance and property taxes: Insurance - ValuePenguin, State Property Tax Rates - Rocket Mortgage.

    In order to demonstrate the impact of taxes and insurance on net rental income, I compared the overhead costs of a $400,000 property in Texas and Nevada. (These averages represent state-level data, and individual cities may levy additional taxes.)


    To achieve the same level of cash flow as a property in Nevada, you would need to generate a higher cash flow in Texas to offset the higher operating costs. The property must generate $5,712 ($9,037 - $3,325) more cash flow annually to compensate for the higher operating costs in Texas.

    Overhead costs have a large impact on cash flow.

    Property Price Growth

    According to Zillow:

    San Antonio and Other Texas Cities

    The challenge with San Antonio's appreciation and rent growth is its unlimited room for expansion. Here is a Google Earth timelapse view of San Antonio. With no limitations on growth, undeveloped land remains inexpensive. This gives people little reason to choose older existing homes over new developments. As a result, new homes effectively cannibalize appreciation and rent growth of existing homes. What does this mean for an investor?

    Financial freedom goes beyond simply replacing your current income; it's about sustaining your lifestyle for life. Inflation steadily erodes the purchasing power of a fixed sum. For example, what costs $100 today will require $155 in a decade, assuming a 5% average inflation rate. If rent growth fails to outpace inflation, you have to get a job to supplement your diminishing rental income.

    Las Vegas Metro Area

    Below is a map showing the Las Vegas metro situation.


    Las Vegas is a small island of private land surrounded by a vast expanse of federal land. Approximately 87% of Clark County (where the Las Vegas metro area is in) is under federal control. Currently, only about 16,000 acres of undeveloped land remain in Clark County. This scarcity has driven residential land prices in desirable areas to $1M per acre or more. Consequently, new single-family homes start at $550,000.

    The demographic we've targeted for over 16 years can only afford to rent homes priced between $350,000 and $475,000. Regardless of how many new homes are built, this doesn't increase the number of homes in this price range. The inventory of homes within this bracket is virtually fixed.

    Prices and rents are determined by demand, which is driven by population growth. Las Vegas adds 40,000 to 50,000 people each year. There is insufficient housing growth to accommodate all the new residents, so they are competing for the available housing.

    What is bringing so many people to Las Vegas? Jobs. At the last job fair, there were over 20,000 open positions. Depending on which article you read, there's between $26B and $30B under construction and in late planning stages in the metro area. This will create thousands of additional jobs, which will attract more people to Las Vegas.

    To summarize the Las Vegas situation: There is continually increasing demand due to population growth for an almost fixed number of homes. This dynamic will continue to drive up both prices and rents for the foreseeable future.

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  • Garrett BrownPro Member
    Rental Property Investor · Houston, TX · Member since 2024 · 516 posts · 553 votes
    1y

    Out of curiosity, how did you decide on these two markets? They both have some more strict STR regulations than I would be comfortable with. If a neighborhood is full of STRs, then not as scary.

    [email protected]
    BiggerPockets
    0Reply
  • Justin BrickmanBusiness Member
    Realtor · San Antonio, TX · Member since 2021 · 502 posts · 274 votes
    1y

    San Antonio's market is the best of both worlds. You can grow your wealth with appreciation by getting in early and you can cash flow early or at least break even year 1. 

    [email protected]210-827-6020
    Justin Brickman Realty4.9145 Reviews
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    0Reply
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