San Antonio, a famous Texas city home to The Alamo, the NBA’s Spurs, and a Six Flags amusement park, but what does it look like as a real estate investment target? If you are interested in house hacking San Antonio, you’ve come to the right place!
We’re going to tackle the pros and cons of house hacking San Antonio by looking at the real world data and analyzing the good and the bad that San Antonio has to offer, as well as multiple strategies for financing a local house hacker and getting the best ROI on your investment.
Let’s jump in!
San Antonio: Tenant Friendly, or Landlord Friendly?
From the state level, Texas is a very landlord friendly state. According to Real Wealth, and agreed upon by about any other list of top landlord-friendly states you find, Texas is one of the best states to be a landlord in from a legal perspective.
The Texas Rental Codes tend to be more friendly towards landlords than tenants in general, and especially when comparing that code to what other states have. San Antonio doesn’t move the needle too much compared to the state code, and certainly don’t have the additional tenant protections like Austin has in place.
If your main concern is investing in landlord friendly cities, then San Antonio should meet those criteria with little issue.
How do the rest of San Antonio’s demographics shake out from an investor standpoint?
San Antonio Demographic Data Analysis
The 6 demographic data points that we’ve learned to use when analyzing a market are population growth, income growth, property value growth, crime level, crime change, and job growth.
When it comes to these six metrics, this is how San Antonio compares to our benchmarks:
|Data Point||Benchmark (since 2000)||San Antonio|
|Property Value Growth||40%||153.5%|
|Crime Level||< 500||438|
|Crime Change||0% or declining||+11%|
|Job Growth||> 1%||4.52%|
San Antonio looks good according to 5 out of 6 of the demographic points we use, but that one that misses – that’s going to be a very important “Ouch!” for many investors – and understandably so.
First, we’ll focus on the good. 5/6 demographics meet our criteria. The property value growth has been a very healthy 153.5% over the past two years which indicates good appreciation, and the city has solid population and income growth.
On top of that, San Antonio is home to a large University, an NBA franchise, and multiple tourist attractions which ups its value as a potential short-term or Airbnb destination.
On the negative side, the crime numbers. The crime change is bad. It’s not only increasing in San Antonio, but it jumped a whopping 11%.
Considering San Antonio already had a high crime level compared to many cities we’re looking at, even in Texas, that is alarming. Consider how much worse those crime rates are than what we looked at in our house hacking El Paso or house hacking Austin Texas articles, to take two real-life analysis examples.
If there’s another year or two like that it could move the Crime Level above the 500 mark that’s the cut off for investment, which is alarming based on current trends.
San Antonio is a market I’d invest in with caution, especially if I had the ability to move around to other more investment demographic friendly cities in the state.
So while we’d want to be careful with a San Antonio house hack, most of the metrics still come in good and if you grew up in a working class neighborhood, the one miss might not scare you off that much. Let’s dive into the best house hacking strategies to make this type of deal work!
5 Strategies for House Hacking San Antonio
San Antonio has a solid demand for rentals in addition to attracting its fair share of tourists. Because of this there are many great strategies we can employ to find a good deal house hacking in this Texas city.
Here are five of the best house hacking strategies for San Antonio.
Look at Multi-Unit Properties Like Duplexes
The mean prices for properties in San Antonio show a cheaper price for multi-unit properties like duplexes, triplexes, or other similar multi-unit properties. This is great news if you’re looking for a house hack because it makes it easy to have your slice of privacy while also having units ready to rent.
Based on the average monthly mortgage payment for a low down payment FHA loan, the mean rent from one unit would cover all but approximately $100 of the mortgage payment.
Keep in mind there are taxes, repairs, etc, but that’s true of any house and if you have a triplex, a 4-unit property or manage a better than average interest rate, or put down a down payment of more than 3.5%, then the deal starts looking very good.
Check out our free house hacking calculator to work with more precise estimates.
Location Matters in San Antonio
Neighborhoods can vary greatly in San Antonio. This is in regards to school quality, average income, quality of the housing, crime rates, and more. This is a city that tends to be neighborhood heavy – meaning there are a lot of different areas considered neighborhoods that have the population of small towns.
So a lot of 3,000 person neighborhoods versus 15,000 person neighborhoods. The quality of neighborhood is important, but location also matters because San Antonio is a prime area for Airbnb which really opens up the cash flow potential from house hacking.
Pay attention to the potential properties that are close to sites like The Alamo, Six Flags, or within a reasonable distance of UTSA. These have an even higher short-term rental potential.
Know All Your House Hacking Financing Options
Explore all your options when looking at how to finance a house hack. As we’ve covered before, many specialty loans are allowed for investment properties as long as the person is also living there. This is why ideas like VA loans for house hacking are worth exploring.
- VA loans for veterans
- FHA first time home buyers’ loans
- Conventional bank loans
- Fannie Mae & Fannie Mac housing loan programs
- Seller-based financing
Some of these are very easy to get approved for while others require more paperwork, steps, or negotiation.
Don’t settle just for the easiest route. If the easiest route gets you the best rates that’s great, but it’s important to do all the work to see what your options are and weigh the pros and cons of each.
Keep Short-Term Rental Possibilities in Mind
Don’t limit your options. While you may like the security of a long-term rental for a house hack, because of the large amount of tourism it’s worth looking at short-term rental opportunities. Especially if the best property you find is close to a touristy area.
A reasonable number of monthly rentals can often earn more than a full-time renter, and with short-term rentals you always have the ability to put rentals “on pause” when you will be out of town or just need a break.
Look at “Upward Trend” Neighborhoods
Some neighborhoods might not look great now, but have clear signs of improving. Talking to locals and figuring out what places are better than they were five or ten years ago, which areas are seeing a drop in crime instead of a rise in crime, or where several properties have been bought and renovated can lead to neighborhoods that are actually undervalued because they are setup to improve and grow over the next few years.
Those neighborhoods showing “upward trends” are worth a look when they’re on the borderline of what you were considering.
It is worth noting that depending on the overall situation in the city, local investment, economy, etc., that there isn’t always a clear neighborhood that is turning around or moving upward versus not.
However, there’s almost always some blocks, some areas of neighborhoods, or blocks targeted for expansion by businesses or colleges for expansion and those areas are prime places to invest.
Because even if you’re bought out after a few years of house hacking, if you do this right it’s almost always for far more than you owe and often more than the current retail value of the property.
3 Strategies to Airbnb House Hack San Antonio
Short-term rentals work extremely well in cities like San Antonio because there is a high demand for temporary housing from multiple major tourist sites. There are a few ways to improve your options in acquiring a good property for Airbnb.
Look at Traditional Multi-Unit Housing Options
With a multi-unit property whether it’s a duplex, triplex, or multi-unit (apartment) “house,” it can be a lot easier to set up the house hack. In some cities the multi-unit houses are much more expensive than standalone houses, but San Antonio does not fall in this group.
The multi-unit housing units in San Antonio actually have a lower mean price than the standalone houses. That doesn’t mean a single family house can’t work with house hacking, but this simply expands the number of options available to house hackers.
Pay Attention to Location
While the main focus needs to be a good property in an area you’re comfortable in living in, if you can find that close to a major tourist draw then that can increase the success of your Airbnb listing in San Antonio.
Some of the major tourist attractions in San Antonio include:
- The Alamo
- San Antonio River Walk
- Six Flags Fiesta San Antonio
- Natural Bridge Caverns
- San Antonio Zoo
Finding properties relatively close by to these spots can increase the number of short-term rentals a property gets in a year, making them more profitable.
Use Expected Rent to Acquire Financing
Many first-time investors don’t know this, but for properties that have multiple units (basically anything above a single family house in most cases) you can take the expected rent based on average local rent numbers and the bank or lender will add that to your income when applying for a loan.
This can increase the number of properties available by making more loan money available to you with that bump up in income during the loan application process. This can also be a way to get money for any badly needed repairs or upgrades the property should get.
San Antonio Neighborhoods: Good & Bad
Every city has its neighborhoods in high demand versus those that aren’t, and San Antonio is no exception. Because of the overall high crime numbers, it is even more important to keep a very close eye on where each property you’re looking at is located and what the surrounding area is like.
Focusing on crime numbers and quality of local life, some of the best neighborhoods in San Antonio are:
- Terrel Hills
- Olmos Park
- Alamo Heights
- Tobin Hill
These neighborhoods, on average, are going to provide more safety and a higher demand for properties compared to others. This can also mean you need to work harder to get a good deal that cash flows, but there are plenty of options.
The following are among the most dangerous San Antonio neighborhoods and while that’s not to say a good house hacking deal can’t be found, it will take more work, and for some people might just not be a comfortable investment.
The most dangerous San Antonio neighborhoods by crime numbers are:
- Wheatley Hills
- Denver Heights
- Eastwood Village
- Nevada Street
- Mission San Jose
There are an above average number of rough neighborhoods in San Antonio, so proceed cautiously but opportunities are here for good deals on houses.
Should You House Hack San Antonio, Texas?
There are still plenty of opportunities to find a good deal house hacking San Antonio. While the high crime rates are a concern, every city has good neighborhoods and the combination of a solid economy, University, and tourist attractions make it attractive long-term.
The Mean Property Value Numbers for San Antonio Are:
- All housing units: $198,380
- Detached Houses: $202,987
- Townhouses/Attached Units: $174,239
- Duplexes: $176,400
- 3 & 4 Unit Structures: $140,442
- 5+ Unit Structures: $150,562
- Median Rent: $1,029
When you start playing with the numbers to realize how many properties have potential to appreciate and create cash flow, which is a 1-2 combo many cities’ real estate markets struggle to provide.
Overall, despite it’s challenges, there’s a lot to really like about San Antonio as a resident and in investing in real estate. The key here is knowing what your risk tolerance is and doing the research to make sure you’re living in a neighborhood you’re comfortable with.
Do that and follow the advice in this guide and you will be able to find a great San Antonio house hacking deal that works for you!