Thinking of investing in San Antonio houses for sale? Let’s see if the San Antonio real estate market is a good place for investment.
Texas keeps hitting the news this year as it’s home to several strong housing markets, like Dallas-Fort Worth, Austin, and San Antonio. For many years, these cities made it in the PwC’s Emerging Trends in Real Estate Report among the top cities in the US housing market for real estate investing. And this year is no different. Both Dallas and Austin are in the top 10 markets to watch, while San Antonio is in the top 20. This, however, does not mean that San Antonio houses for sale are less favorable for real estate investing. In fact, there are numerous reasons why property investors should consider investing in the San Antonio real estate market.
1) San Antonio Is an 18-Hour City
The 2019 Emerging Trends Report has shown that 18-hour cities have been growing in popularity. Rather than 24-hour cities like New York, Los Angeles, and Chicago, 18-hour cities (like San Antonio) are the surprising best locations for real estate investors. Key reasons for property investors’ increasing confidence in the performance of 18-hour cities are millennials and economic growth.
Related: The Millennial Effect on the Real Estate Market
For years, San Antonio houses for sale have mostly attracted families and retirees due to the city’s reputation as being family-friendly. However, it appears that millennials and younger people have recently been flocking to the city as well! This increasing young population has led to economic growth – as we’ll see in the next point. In effect, this is influencing investment choices in the San Antonio real estate market which gives more property investors the confidence to invest here.
2) Strong Job Market and Population Growth
If you’ve spent time in San Antonio the last several years, it’ll come as no surprise that the local economy and job market are thriving. As of May 2018, the city has an unemployment rate of 3.2% which is far below the national average of 4%. In addition, new job opportunities seem to be appearing all the time! San Antonio is home to companies like Rackspace, NuStar Energy, and USAA, among others. On top of that, the city’s large military presence also expands the workforce by a whopping 100,000 jobs. This thriving job market is making San Antonio one of the best cities to invest in real estate in Texas.
This is also a big factor driving population growth. A U.S. Census Bureau Report tracked the fastest-growing cities in the US between 2016 and 2017. San Antonio was the clear winner, with the largest population gain in the country (almost twice the national rate) during this period! This growth doesn’t seem to be diminishing any time soon. The combination of the strong job market and population growth means San Antonio houses for sale definitely make for good real estate investments.
3) Tight Supply Is Boosting Home Prices
One concern affecting the San Antonio real estate market is the below-average level of supply. According to the Emerging Trends Report, the housing development in San Antonio has also been slowed by the rising cost of materials and construction labor. The demand, meanwhile, appears to be strong. Due to this imbalance, it’s easy to understand why economists forecast continued price growth for San Antonio houses for sale.
According to Zillow, the median home value in San Antonio is $173,500. This is an increase of 9.1% over the past year and Zillow predicts it will rise 2.5% within the next year. Of course, this translates into strong real estate appreciation that San Antonio real estate investors have been and will continue to benefit from.
According to LittleBigHomes, which publishes forecasts of home price trends in 380 Metropolitan Statistical Areas, the historical home price appreciation for San Antonio real estate was:
- 3% in the last year
- 40% in the last 5 years
- 43% in the last 10 years
In addition, this forecast identified the San Antonio real estate market as “warm.” This means it’s not yet a seller’s market, but it’s definitely heading towards that direction. If home prices keep on this upward trend, then San Antonio houses for sale will be more expensive at the end of the year than they are right now. So, real estate buyers need to act fast if they want to score a good deal before prices get any higher.
Use our Property Finder to quickly find lucrative investment properties in San Antonio that match your criteria in a matter of minutes!
4) Strong Rental Market and Favorable Demographic
The fact that property prices are rising is actually good news for San Antonio real estate investors. This increase, along with the rising mortgage rates in the US housing market, means that fewer people will be able to afford to buy a house. As a result, many of the city’s population will opt to rent one instead. After a rental market analysis on San Antonio, it appears that the city is a strong rental market which is something owners of rental properties should look for in a location for investing in real estate.
Related: 5 Steps to Conducting an Accurate Rental Market Analysis
The demographic breakdown of the San Antonio real estate market is also favorable. The city has a significantly higher percentage of its population in the 0-to-24 and 25-to-44 age cohorts. This younger population is supporting good labor force growth as well as the rental market seeing as millennials aren’t buying homes due to unaffordability, higher mortgage rates, tighter credit, and student debt. San Antonio is actually one of the best cities to invest in real estate to rent out to millennials. Thus, buying San Antonio houses for sale and then renting them out to long-term tenants is a smart real estate investment.
4) Airbnb San Antonio
For the longest time, San Antonio has been one of the “silent cities” that doesn’t have a legal framework in place for short-term rentals. However, on November 1st of 2018, the San Antonio City Council passed an ordinance that officially regulates and legalizes short-term rentals in the city. Some of these new regulations include zoning restrictions, permits, and short-term rental taxes.
Related: Learn About the New Regulations on San Antonio Short-Term Rentals
This, nonetheless, should not discourage you from investing in short-term rentals in the San Antonio real estate market. It only means you need to do your homework and ensure you’re staying in line with the law. Other than that, investing in Airbnb rentals in San Antonio remains a profitable investment strategy. As a matter of fact, data from Mashvisor’s Investment Property Calculator shows that Airbnb is actually the optimal rental strategy!
The Alamo, a popular tourists destination in San Antonio
Where to Find San Antonio Houses for Sale to Rent Out on Airbnb
Since owning an Airbnb investment is the optimal way to make money with a rental property in SA, here’s a list of the best neighborhoods where real estate investors will find profitable San Antonio houses for sale to buy and rent out on Airbnb to short-term tenants:
Sun Gate
- Median Property Price: $149,900
- Price Per Sq/Ft: $142
- Airbnb Rental Income: $3,553
- Airbnb Occupancy Rate: 54%
- Cash on Cash Return: 15%
Jefferson Heights
- Median Property Price: $102,749
- Price Per Sq/Ft: $121
- Airbnb Rental Income: $2,195
- Airbnb Occupancy Rate: 51%
- Cash on Cash Return: 11%
Hillcrest
- Median Property Price: $285,000
- Price Per Sq/Ft: $110
- Airbnb Rental Income: $4,702
- Airbnb Occupancy Rate: 50%
- Cash on Cash Return: 10%
Blossom Park
- Median Property Price: $252,600
- Price Per Sq/Ft: $130
- Airbnb Rental Income: $3,665
- Airbnb Occupancy Rate: 55%
- Cash on Cash Return: 10%
Los Angeles Heights-Keystone
- Median Property Price: $142,550
- Price Per Sq/Ft: $94
- Airbnb Rental Income: $2,726
- Airbnb Occupancy Rate: 52%
- Cash on Cash Return: 9%
United Westwood
- Median Property Price: $104,900
- Price Per Sq/Ft: $81
- Airbnb Rental Income: $2,185
- Airbnb Occupancy Rate: 61%
- Cash on Cash Return: 9%
Arboretum
- Median Property Price: $229,000
- Price Per Sq/Ft: $133
- Airbnb Rental Income: $3,665
- Airbnb Occupancy Rate: 46%
- Cash on Cash Return: 8%
Ingram Hills
- Median Property Price: $169,000
- Price Per Sq/Ft: $106
- Airbnb Rental Income: $2,684
- Airbnb Occupancy Rate: 55%
- Cash on Cash Return: 8%
People Active in Community Effort
- Median Property Price: $97,167
- Price Per Sq/Ft: $91
- Airbnb Rental Income: $1,808
- Airbnb Occupancy Rate: 57%
- Cash on Cash Return: 8%
Start out your 7-day free trial with Mashvisor now to start analyzing and comparing investment properties in the neighborhood of your choice!
Looking for Traditional San Antonio Houses for Sale?
If you’re not interested in Airbnb and would rather go for a traditional rental property, here are the best neighborhoods to consider according to Mashvisor’s Investment Property Calculator. Note: To learn more about our product and how we’ll help you make faster and smarter real estate investment decisions, click here.
People Active in Community Effort
- Median Property Price: $97,167
- Price Per Sq/Ft: $91
- Price-to-Rent Ratio: 7
- Traditional Rental Income: $1,191
- Cash on Cash Return: 5%
Jefferson Heights
- Median Property Price: $102,749
- Price Per Sq/Ft: $121
- Price-to-Rent Ratio: 10
- Traditional Rental Income: $898
- Cash on Cash Return: 4%
Riverside South
- Median Property Price: $161,225
- Price Per Sq/Ft: $108
- Price-to-Rent Ratio: 11
- Traditional Rental Income: $1,273
- Cash on Cash Return: 3%
Los Angeles Heights-Keystone
- Median Property Price: $142,550
- Price Per Sq/Ft: $94
- Price-to-Rent Ratio: 9
- Traditional Rental Income: $1,253
- Cash on Cash Return: 3%
Village North One
- Median Property Price: $280,350
- Price Per Sq/Ft: $138
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $1,876
- Cash on Cash Return: 3%
Prospect Hill
- Median Property Price: $149,866
- Price Per Sq/Ft: $94
- Price-to-Rent Ratio: 14
- Traditional Rental Income: $898
- Cash on Cash Return: 3%
Looking at this data, it’s no wonder why many real estate investors are turning their eyes to the San Antonio real estate market. So, what are you waiting for? Click here and analyze and find the best San Antonio houses for sale in a matter of minutes using AI and real estate predictive analytics!