San Antonio. One of America’s most populated cities, filled with history, culture, and real estate investment opportunities. Whether you’re interested in traditional or Airbnb, investing in San Antonio real estate can be very profitable. Why is that? For starters, San Antonio was listed as number 3 on Forbes’ top 20 housing markets to invest in this year. It was also in the top 5 single-family housing markets by Auction.com and as number 3 in WalletHub’s healthiest housing markets in big cities. And that’s not all, San Antonio is also friendly to Airbnb. In R Street’s Roomscore 2016: Short-Term Rental report, San Antonio was among the most lenient cities to Airbnb, earning a score of 90.
What makes investing in San Antonio real estate so lucrative?
Large and Growing Population and Job Market
San Antonio stands as the seventh most populous city in the nation. Its population is only continuing to grow, with an 8% increase from 2010 to 2014. Millennials are also a large part of that growth. Another strong suit of San Antonio is its firm job market, with jobs ranging from oil and gas industries to manufacturing and military jobs. Even during the recession, the unemployment rate never went above the national average. It now sits at under 5%.
What does this mean for you, as a San Antonio investment property owner? This indicates that the city is a seller’s market. In other words, your investment property’s value will increase with the increasing population. This is something you definitely want to take advantage of.
Affordability
Although SA property prices have been upticking recently, they’re still lower compared to other big Texas cities and the country on average. The city’s financing status also makes investing in San Antonio real estate so appealing. With the lowest down payments in the country, stable mortgage prices, and low interest rates, buying San Antonio real estate investments feels welcoming. Buy now before prices rise!
Related: Texas Real Estate Investing: The Best Areas
Attractive Tourist Destination
Don’t want to invest in a traditional investment property? That’s fine, SA is still great for vacation rentals, including Airbnb.
San Antonio’s rich and unique history attracts many short-term rental dwellers. With the Alamo as a UNESCO World Heritage Site, the serene River Walk, and much more historical attractions, it’s easy to see why tourists flock to the city every year. Rich history along with theme parks such as Six Flags Fiesta Texas and SeaWorld makes San Antonio an ever so popular tourist destination.
Go Spurs Go!
The San Antonio Spurs basketball club is arguably the most popular thing to come from the city. As one of the NBA’s most elite teams for nearly two decades, the Spurs have attracted fans from all around the world to visit SA. These enthusiastic fans will need vacation rentals to stay in when their Spurs play. Sounds like a great Airbnb opportunity, if I do say so myself.
Interested in investing in San Antonio real estate? Here are the top five neighborhoods to invest in.
As a side note, the listed cash-on-cash returns and cap rates are the averages for the neighborhoods. An investment property there would typically have a higher cash-on-cash return and cap rate.
Top 5 Neighborhoods for investing in San Antonio Real Estate
Alamo Farmsteads
- Median Property Price: $194,900
- Traditional Monthly Rental Income: $1,021
- Airbnb Monthly Rental Income: $1,970
- Traditional CoC: 2.1%
- Airbnb CoC: 6.88%
- Airbnb Occupancy Rate: 58%
Alamo Farmsteads is a bankable neighborhood for investing in San Antonio real estate, especially through Airbnb. Low median prices, high occupancy rate, and great income, what more can you ask for?
Related: 7 Tips to Achieve a High Airbnb Occupancy Rate
King William
- Median Property Price: $427,500
- Traditional Monthly Rental Income: $2,445
- Airbnb Monthly Rental Income: $4,172
- Traditional CoC: 4.21%
- Airbnb CoC: 9.79%
- Traditional Cap Rate: 8.61%
- Airbnb Cap Rate: 14.55%
- Airbnb Occupancy Rate: 51.4%
Dubbed the “most beautiful historic neighborhood in Texas”, King William is a popular tourist destination in SA. The neighborhood contains art galleries, museums, shops, and restaurants, all preserved in elegant and historical designs. As seen from the data, an investment property in the neighborhood can be gainful as a traditional or Airbnb. An Airbnb strategy is more profitable, however. If you’re interested in investing in San Antonio real estate in this area, rent your investment property through Airbnb.
Lavaca
- Median Property Price: $333,750
- Traditional Monthly Rental Income: $1,124
- Airbnb Monthly Rental Income: $2,270
- Traditional CoC: -0.05%
- Airbnb CoC: 3.9%
- Traditional Cap Rate: 4.16%
- Airbnb Cap Rate: 8.36%
- Airbnb Occupancy Rate: 46.6%
Lavaca stands as the oldest neighborhood in San Antonio. Similar to King William, it’s popular to both residents and tourists. An Airbnb rental strategy is superior to a traditional one in this neighborhood.
Dignowity Hill
- Median Property Price: $257,048
- Traditional Monthly Rental Income: $1,903
- Airbnb Monthly Rental Income: $1,505
- Traditional CoC: 4.75%
- Airbnb CoC: 2.61%
- Traditional Cap Rate: 9.56%
- Airbnb Cap Rate: 7.29%
- Airbnb Occupancy Rate: 46%
Dignowity Hill has long been a historical residential neighborhood in the city. This parallels our data, too. With relatively low property prices, consider renting a property here as a traditional.
Tobin Hill
- Median Property Price: $359,000
- Traditional Monthly Rental Income: $1,170
- Airbnb Monthly Rental Income: $3,311
- Traditional CoC: -0.3%
- Airbnb CoC: 6.21%
- Traditional Cap Rate: 3.78%
- Airbnb Cap Rate: 10.71%
- Airbnb Occupancy Rate: 41.5%
As another one of the city’s historical areas, Tobin Hill has been a hotspot for Airbnb. It’s easy to see why. The average Airbnb monthly income is almost three times the traditional one. Investing in San Antonio real estate in Tobin Hill through Airbnb is the way to go.
Related: Best Places to Invest in Real Estate in 2017
Investing in San Antonio real estate is an opportunity you do not want to miss. With desirable tourist and resident destinations, healthy financing, and lucrative markets, San Antonio is a top city to buy an investment property in.
For more on investing in San Antonio real estate and other real estate markets in the U.S, visit Mashvisor.