Texas Short Term Rental Investment Guide

The best Texas STR markets include Austin (tech hub with major events like SXSW and ACL), San Antonio (tourism destination with the River Walk and Alamo), Houston (business travel and medical center demand), Dallas-Fort Worth (corporate relocations and sports events), Galveston (beach destination), Fredericksburg (wine country getaway), South Padre Island (spring break and beach tourism), and Port Aransas (family-friendly Gulf Coast destination). Each market offers unique opportunities based on tourism patterns and local demand drivers.

Texas does not have statewide STR regulations, meaning rules vary significantly by city and county. Austin requires STR licenses with different types for owner-occupied vs. non-owner-occupied properties. San Antonio and Houston have specific permitting requirements. Dallas has occupancy limits and registration requirements. Galveston requires permits for vacation rentals. It's essential to work with a local STR-specialized agent who understands the specific regulations in your target market.

Texas STR income varies significantly by market and property type. Austin properties average $51,000+ annually with $225 nightly rates. Beach destinations like Galveston and South Padre Island can generate $60,000-$100,000+ during peak seasons. Hill Country properties in Fredericksburg average strong weekend rates due to wine tourism. Major metros like Dallas and Houston perform well with business travelers. Actual earnings depend on location, property size, amenities, and management quality.

Texas STR operators must collect and remit the state Hotel Occupancy Tax (HOT) of 6% on rentals of less than 30 consecutive days. Additionally, most cities and counties impose their own local HOT rates, which can range from 7-17% combined with state taxes. Some platforms like Airbnb collect and remit taxes automatically, but operators should verify compliance. A Texas STR specialist can help ensure you understand all applicable tax obligations.

Whether you need a property manager depends on your location, investment goals, and availability. Many successful Texas STR investors self-manage using tools like smart locks, automated messaging, and local cleaning services. However, professional management (typically 20-35% of revenue) can be valuable for out-of-state investors or those with multiple properties. Our matched agents can connect you with reputable local property managers or provide guidance on self-management strategies.