Are San Antonio rentals still a smart move, or have higher rates and taxes wiped out the math? If you are weighing a first purchase or deciding whether to keep a home as a rental, you are not alone. The good news is you can still find solid long‑term plays in Bexar County, but the bar for cash flow is higher than it was a few years ago. In this guide, you will see the actual inputs to model, real‑world examples, and a practical checklist to help you invest with eyes wide open. Let’s dive in.
San Antonio rental snapshot
Prices and rents today
Recent market feeds show typical San Antonio single‑family home values in the roughly $245,000 to $280,000 range citywide. Citywide average apartment rents run about the mid‑$1,200s, and many 2 to 3 bedroom SFRs lease around the mid‑$1,400s to $1,900 depending on submarket and condition. When you underwrite a specific house, use true rent comps for that micro‑area rather than city averages. You can use the city’s average apartment rents as a directional anchor, then adjust to SFR comps.
Vacancy and new supply
San Antonio absorbed a wave of new multifamily deliveries after the pandemic, and occupancy softened through 2024 and 2025. In some areas, apartment occupancy dipped into the high 80s and asking rents came under pressure. That creates competition for renters near new build‑to‑rent communities and large apartment nodes. Local reporting highlights this dynamic, noting a pickup in vacancy and softening rents across parts of the market.
Financing costs in 2026
The national 30‑year fixed average has hovered in the high 5 percent range in early 2026 per the Freddie Mac Primary Mortgage Market Survey. Investor loans usually price a bit higher than owner‑occupied rates, often by about 0.5 to 1.0 percentage point. Always price your deal with a live lender quote. Even a small rate change can swing a rental from slightly positive to negative cash flow.
Property taxes to expect
Bexar County’s combined tax burden is a key expense. The city component for FY2025 is published at 0.541590 per $100 of valuation, and many parcels see a combined effective rate around 2.0 percent when you add city, county, ISD, and special districts. For a quick model, use 2.0 percent of market value, then refine with the parcel’s actual rate from the county’s official tax rates page.
What drives returns in Bexar County
- Vacancy allowance: Model 5 to 10 percent to reflect lease‑up time and turnover. Bias higher in submarkets facing heavy new supply.
- Property taxes: Budget around 2.0 percent of value citywide unless you pull the exact parcel rate. Reassess after any valuation change.
- Insurance: Texas landlord insurance often runs roughly $1,800 to $3,500 per year depending on coverage and location. Get quotes early and model conservatively. Reference: Texas landlord insurance cost ranges.
- Management: Full‑service management in San Antonio commonly runs about 8 to 10 percent of collected rent, plus a leasing fee that is often 50 to 100 percent of one month’s rent. Reference: typical Texas property management fees.
- Maintenance and CapEx: A quick rule is to reserve about 1 percent of purchase price per year. Older homes and homes with pools or larger yards can run higher.
- Closing cash: Many investors put 20 to 25 percent down on non‑owner‑occupied loans, plus 2 to 5 percent closing costs and initial reserves.
How to underwrite a San Antonio SFR
Follow a simple, repeatable process so you can compare apples to apples.
- Build your rent comp set.
- Pull recent signed leases and current SFR listings within the same micro‑area and school district boundary. Match bed, bath, age, and condition.
- Set a market rent, then apply your vacancy allowance to get effective rent.
- List every operating expense.
- Include property taxes, landlord insurance, professional management, HOA dues, owner‑paid utilities if any, routine maintenance, and a CapEx reserve.
- Calculate NOI and returns.
- Gross Annual Rent = monthly rent × 12
- Effective Rent = Gross Rent × (1 − vacancy%)
- NOI = Effective Rent − Operating Expenses
- Cap Rate = NOI ÷ Purchase Price
- Debt Service = annual mortgage principal and interest
- Cash Flow = NOI − Debt Service
- Cash‑on‑Cash = Annual Cash Flow ÷ Total Cash Invested
- Run sensitivities.
- Stress test your model for a rent drop of 5 to 10 percent and a rate increase of 0.5 to 1.0 percentage point. Also model a refinance scenario in case rates fall.
Two quick scenarios
These examples use conservative citywide inputs to show how the math moves. Swap in parcel‑specific taxes, true rent comps, and a real lender quote before you act.
Scenario A: Median purchase, average rent
- Purchase price: $250,000; 25 percent down; investor loan at 6.5 percent; monthly P&I about $1,185.
- Rent: $1,376 per month (a citywide 2‑bed reference point); vacancy 8 percent.
- Annual totals: Effective rent about $15,190; expenses about $11,594 (taxes around 2.03 percent, $2,000 insurance, 10 percent management, 1 percent maintenance, basic turnover).
- Result: NOI about $3,596. Annual debt service about $14,221. Pre‑tax cash flow roughly −$10,625 per year. Cash‑on‑cash is negative on about $70,000 invested.
Takeaway: With current rates, city‑average rents, and conservative expenses, a typical financed SFR may not cash flow on paper. Many investors look at total return instead, including principal paydown, depreciation, and potential appreciation.
Scenario B: Better rent‑to‑price mix
- Purchase price: $210,000; same financing; rent targeted at $1,750; same expense ratios.
- Result: Higher rent and a lower purchase price lift NOI and move cash flow closer to breakeven, sometimes modestly positive or modestly negative depending on exact taxes and insurance.
Takeaway: Small shifts in price, rent, or interest rate can change the outcome. Negotiation, light upgrades that justify higher rent, and lender shopping matter.
Where San Antonio rentals can still work
- Focus on rent‑to‑price: Seek micro‑markets where SFR rents are strong relative to purchase price. Compare multiple comps, not a single listing. Watch days on market for rentals nearby.
- Track demand anchors: Employment centers like Joint Base San Antonio, the Medical Center, and large corporate campuses help support steady renter pools. These do not guarantee high yields, but they can stabilize demand through cycles.
- Watch supply competition: If a submarket added many new apartments or build‑to‑rent homes, expect tougher lease‑ups or more concessions. The recent apartment supply wave is a real factor.
- Check flood risk before you buy: Standard policies do not cover flood. Use the San Antonio River Authority tools to check floodplain status and obtain a flood quote if the parcel is in or near a Special Flood Hazard Area. Start with SARA’s flood safety and mapping resources.
- Verify taxes parcel‑by‑parcel: Two streets can have very different bills based on ISD and special districts. Always pull the parcel’s components from Bexar County.
Taxes, laws, and risk checks
- Depreciation and reporting: Residential rentals are generally depreciated over 27.5 years and reported on Schedule E. Review the IRS rules in Publication 527 and consult a CPA for current guidance.
- Texas tax context: Texas has no state income tax, which can help after‑tax returns. Weigh that benefit against higher local property taxes when you model.
- Eviction basics: Texas requires a written Notice to Vacate in most cases before filing in JP Court, with defined timelines to judgment and appeal. Read Tex. Property Code §24.005 on FindLaw’s code page and consult counsel for case‑specific advice.
- Flood insurance: If your property sits in a mapped flood zone, you will likely need a separate flood policy and you should budget for it. Use SARA and FEMA tools for parcel checks.
- 1031 exchanges: You can defer capital gains tax when trading one investment property for another if you follow strict rules and timelines. Learn the basics from this overview of 1031 exchange rules and involve a qualified intermediary and tax advisor.
A simple next‑step checklist
- Pull three to five recent signed lease comps that match bed, bath, and condition within your micro‑area.
- Model vacancy at 5 to 10 percent and set a CapEx reserve near 1 percent of price.
- Price property taxes with the parcel’s combined rate. Recalculate after any valuation change.
- Get a landlord insurance quote and, if relevant, a flood quote before you offer.
- Shop your investor loan and run three cases: base, stress, and best case.
- Ask a local manager for a written fee schedule and expected days‑on‑market for similar homes.
Bottom line: San Antonio remains an attractive, relatively affordable market with steady long‑term demand, but 2026 underwriting needs to be conservative. Many financed SFRs will show thin or negative cash flow if you use realistic taxes, insurance, and vacancy. If you target stronger rent‑to‑price pockets, negotiate well, and plan for total return over time, you can still build a durable portfolio here.
If you want local eyes on a specific property, tenant placement support, or a second opinion on your underwriting, our team is here to help. Reach out to Harkin Realty for data‑driven guidance and high‑touch service across San Antonio and the Hill Country.
FAQs
What cap rate is typical for San Antonio single‑family rentals in 2026?
- Many deals trade around the mid‑4 percent to mid‑6 percent cap rate range, with wide variation by zip code, condition, and tax burden.
How should I estimate Bexar County property taxes for a rental?
- Use about 2.0 percent of market value as a quick citywide estimate, then pull the parcel’s combined rate from Bexar County to model precisely.
How do current mortgage rates affect San Antonio rental cash flow?
- With 30‑year averages in the high 5 percent range and investor loans pricing higher, debt service can compress or erase cash flow unless rent‑to‑price is favorable.
Do I need flood insurance for a San Antonio rental property?
- Standard policies do not cover flood; if a parcel is in or near a mapped flood zone, you should secure a separate flood policy and budget for it.
Is there rent control in San Antonio?
- Texas generally does not allow municipal rent control in typical conditions, so San Antonio does not have a citywide rent control program.
What down payment do lenders usually require for an investment property?
- Many conventional investor loans require 20 to 25 percent down, plus closing costs and reserves. Always confirm with your lender.
