Texas has always been a popular State when it comes to buying and investing in real estate, and Airbnb Galveston Texas is no exception.
From traditional to short term rentals, Texas offers investors a thriving and lucrative real estate market from city to city and county to county. However, while the state itself has a promising real estate market, not all cities will offer the same benefits to their investors as the rental market often differs.
Some cities in the state are better suited to traditional rental, which is a long-standing profitable real estate strategy. But with the rise of Airbnb, many people are gearing their investment property to be a short-term rental as it can often generate more profit if done correctly.
So in this article, we will take a closer look at Airbnb Galveston Texas. With the county’s scenic beaches, endearing beach towns that draw in millions of tourists each year, many people looking into the area’s real estate market see a greater potential in short-term rentals and the Airbnb business model as compared to the traditional renting strategy. If you are still hesitant about investing in Airbnb Galveston TX this 2022, keep reading to find out if the County of Galveston sounds like a good fit for your real estate investment goals.
2022 Housing Market of Texas and Galveston County
Before getting into the nitty-gritty of Airbnb in Galveston Texas, it is important to consider the Texas housing market as a whole this 2022. For the past few years, the entire state has seen an increase in the price of homes and properties, making it a seller’s market. However, 2022 seems to be bringing in a change in the real estate market of Texas. With the projected 2% decrease in property values by Zillow, the state is about to shift into a buyer’s market.
While this may seem like a bad thing that properties are not appreciating as much compared to previous years, this may have some benefits to investors looking to buy property this year. Having a buyer’s market means that investors looking to buy a property this 2022 will have more negotiating power during the initial sale.
With the decrease in value, sellers will be on the struggling end to find a buyer at a higher price point, pushing them to sell at a lower price. Purchasing a property now can help ensure that you will make a decent profit and could lead to higher returns on investment in the long run.
In Galveston county specifically, Zillow reports the 2022 trend to most likely adopt a balanced real estate market. This means that neither the seller nor buyer has significant negotiating power over the other during the initial sale. While the median home price in the county went up 13.7% year-over-year rate, with properties in Texas decreasing in value, Galveston homes are expected to remain stagnant and show little growth or decline in their value this year.
Those who already own an investment property in the city will not see an increase in value this year. But if you are looking to buy Galveston beach house rentals for your Airbnb business, you are likely to find one at a more reasonable median price, which will have the potential to appreciate in the following years.
Why Should You Invest In Airbnb Galveston Texas?
Aside from the housing market of Texas allowing you to perhaps buy a more reasonably priced property this 2022, Galveston contains all the factors that make a great Airbnb city. From its millions of seasonal tourists around Texas and the rest of the United States and its coastal prices, Airbnb Galveston has all the makings of a lucrative rental property and successful Airbnb business. Here are just some reasons as to why you should invest in Airbnb Galveston Texas this 2022:
1. Thriving Tourism Market For Airbnb’s
Why is Airbnb Galveston Texas such a good investment? Well, as a real estate model that heavily relies on seasonal tourists and short-term renters, Galveston’s high tourist rate benefits any Airbnb. As a coastal area in the heavily populated state and the fourth most visited state in the country, Galveston is naturally going to attract in-state and out-of-state visitors throughout the year.
With the management of Covid-19 and its infection cases finally being somewhat under control, tourist restrictions and travel are expected to make a full recovery this 2022. While this can be said for the entire country, Galveston sees around 7 million visitors and has a 3.5% increase of tourists each year.
Whether it be Galveston beaches or the moody gardens, there is something for everyone in the area, contributing to its popularity amongst tourists and potential short-term renters. With minimal restrictions and a history of a high tourist rate, you can expect that your Airbnb property will have a lot of traffic from seasonal travelers.
2. Lower Costs of Properties
Airbnb Galveston Texas allows investors to buy a rental property in a popular tourist destination, without having to deal with high property prices and excessive loans. Alongside the great potential in Galveston Texas Airbnb for any savvy real estate investor, it is worth noting that on average, Galveston’s properties are 2% cheaper than the national average. Due to the lower capital and minimal loans, Airbnb Galveston Texas is a lower-risk investment as compared to other cities in the state.
With the projected stagnant real estate market in Texas and the properties in Galveston being cheaper, this may be the perfect place for new investors trying to get into real estate with limited financial capabilities or someone trying to learn the ropes of short-term rental real estate.
Airbnb Galveston Texas 2022 Projections
Now that you know the pros and cons of the real estate market of Galveston, you may be thinking that any property in Galveston will make a great Airbnb, but that is not the case. While Airbnb Galveston does have a lot of potential, you will have to choose the right neighborhood within the area to truly reap the Airbnb rental benefits it has to offer. Using Mashvisor’s real estate investment tools, we have sifted through the big data on Galveston properties and collected all the necessary analytics for you to make an informed decision and choose the best locations for your Airbnb real estate investment. With Mashvisor’s Airbnb calculator, you will also be able to see all the different metrics like cap rate, median price, monthly Airbnb rental income, and occupancy rate, which will help you decide if a property is profitable. The last thing you want to do is overpay for an underperforming property that eats away at your bottom line.
Based on Mashvisor’s data, here are the different neighborhoods in Galveston County and their subsequent metrics:
- Median Property Price: $455,721
- Average Price per Square Foot: $281
- Days on Market: 118
- Airbnb Rental Income: $3,195
- Airbnb Cash on Cash Return: 3.88%
- Airbnb Daily Rate: $217
- Airbnb Occupancy Rate: 50%
- Walk Score: 81
- Median Property Price: $644,354
- Average Price per Square Foot: $404
- Days on Market: 114
- Airbnb Rental Income: $3,414
- Airbnb Cash on Cash Return: 2.64%
- Airbnb Daily Rate: $416
- Airbnb Occupancy Rate: 37%
- Walk Score: 35
- Median Property Price: $410,127
- Average Price per Square Foot: $207
- Days on Market: 40
- Airbnb Rental Income: $2,911
- Airbnb Cash on Cash Return: 4.64%
- Airbnb Daily Rate: $276
- Airbnb Occupancy Rate: 51%
- Walk Score: 60
Airbnb Galveston Laws
When one thinks of how to invest in real estate, particularly Airbnb short-term rentals, they often forget to consider the laws and regulations that come with managing the property. Before buying any property in Galveston with the intention of putting it up on Airbnb, or any short-term rental for that matter, it is important to familiarize yourself with the city and state laws regarding the Airbnb real estate model. Throughout different states and cities, the rules for short-term rentals change and fluctuate depending on the area.
While there has been some discussion on Texas banning non-primary residences for short-term rentals, in general, it is still legal for people to host guests in their secondary and vacation homes. However, certain permits and fees do need to be paid to rent out your property in the state.
In addition to state regulations, Airbnb Galveston Texas has its own rules and regulations when it comes to hosting guests. Here are some of the rules and regulations implemented by Galveston City:
1. One-Time Registration Fee
To be able to legally accept guests and hosts on Airbnb Galveston Texas, you will be required to register your property with the Galveston Park Board as a short-term rental. This is important as this will give you your property’s registration number that will be used when filing for taxes and used in other business dealings in the city.
Registration has a one-time $50 fee and can be done quickly online.
2. Limit on Duration of Stay
While it is pretty common for most guests to only stay for a weekend or a couple of days, it is important to be aware of the limit Galveston City has imposed on the permitted length of stay on Airbnb. For any short-term rental property, Galveston City limits the rental period to a maximum of 30 days only. This means that one guest or group of guests under one booking can stay no longer than 30 days in your property under the short-term rental regulations of the city.
3. Scheduled Filing for Taxes and Income Declaration
Depending on how much your property generates in rental income, you may have a different schedule for filing taxes and declaring income. On a regular basis, Galveston City requires filing on the 20th of every month. However, if the taxes on your property do not go above $500 a month, you can do this quarterly instead. Taxes and income must always be filed even if there is no revenue during the filing period. If you do not submit your taxes and income on time, you may acquire a $25 fine.
4. Advertisements and Registration Numbers
After registration, you should be ready to list and promote your property and start generating rental income. Advertisements and promotional materials will help boost your occupancy rate and ensure that your property is always booked to generate income. However, before promoting and listing your property, it is important to know that while ads and promotions are legal in Galveston, you will need to attach your registration number to each advertisement and the listing itself. Failure to do so may lead to several fines and penalties.
Note: Rules and regulations are regularly updated by the city. Before investing in any property, please check the updated list of the cities ruling on short-term rentals.
The Bottom Line on Airbnb Galveston Texas Investments
Galveston Texas offers some of the best real estate deals across the country this 2022, especially in the short-term rental market. Like any real estate investment, Airbnb Galveston Texas has the potential to be a lucrative one, if you based your investment decisions on accurate and up-to-date data.
With Mashvisor’s real estate investment tools such as the Property Finder and Airbnb calculator, both new and seasoned investors will be able to find the best Galveston properties. Through our investment analysis tools, you will be able to make your decisions based on the property’s cap rate, cash on cash return, occupancy rate, rental income, and initial sale price amongst other critical data and information that will help guarantee the success of your investments.
Sign up for Mashvisor and get access to all our real estate data on Galveston and the rest of the United States to start your real estate investment journey today.