Have you been recently considering whether to enter the real estate rental market? Are you unsure what type of rental your particular house is best suited for? You’re not alone. Many people who buy rental properties face dealing with the initial task of answering these questions. The great thing is that there isn’t a right or wrong answer. Each choice is subjective, based on your unique circumstances.

When turning your current residence into a rental, or purchasing a home with the purpose to rent it out, property owners tend to take one of two strategies: short-term vs. long-term rentals.

Short-Term vs. Long-Term

Short-Term Rentals (STR) like to focus on people that rent to the tourism market, and San Antonio is an area that continues to thrive in that department. We have the Riverwalk, Fiesta Texas, the Alamo and many other places visitors love. These visits typically last about three to five days, a short-term stay. Although, the technical definition of a short-term rental allows visitors to stay up to 29 days.

There is a unique opportunity that has served San Antonio very well, and that is the need for a furnished rental for a longer stay. You do not need to pay the Hotel Tax, nor do you need a permit for these types of stays that are longer than 30 days. With people transitioning here, there is an open market, whether they’re waiting on a home to be completed or they’re traveling for work, etc. We have seen people and families stay up to a year in this type of situation. A lot of families considering this option have pets and other unique circumstances that either require or desire a single-family home vs a hotel.

The other option is a traditional rental. With these, there are minimal management requirements and utility costs that are the tenants' responsibility vs. a situation that the property owner would normally take care of.   

The Deciding Factor

If you’re still having trouble deciding, consider that the location of your rental home is also essential. For example, if you have a condo down on the Riverwalk, you’re more likely to get higher rates and an overall revenue increase, so you may want to lean towards making it an Airbnb or another short-term rental option. For example, a house bought on the Northwest side of San Antonio buried deep in the suburbs may be best marketed for month-to-month rentals or 6-12 month leases. San Antonio is vast and diverse, with many different parts of the city. Consider where your property is and use the primary purpose of your surrounding area to your advantage.

Renting in Today’s Market

The unfortunate truth is inflation has become fully present. It has affected everybody of all different economic backgrounds, and we must grapple with its impact. Discretionary spending in terms of travel will remain flat or even go down. People are becoming more conscious of where their money goes, which means you should, too, if you’re not already. Figure out your budget and what is financially feasible for you. Extravagant spending will only hurt you in the long run. For example, it’s best to keep furnishing expenses to $10,000 or less in a San Antonio market. However, the game has changed if you’re located in a luxury market like Dallas. People are willing to spend more in a high-end area, so you could see a better investment return if you make high-quality purchases.

The bottom line is to be innovative and strategized when making your rental plan. If you do it right, you could expect to make more income than you planned. With any extra money available, use it to continue building your wealth. Put it towards acquiring another hard asset to help hedge against inflation. After all, that’s the ultimate goal, and to achieve this, put yourself in a situation where you can earn at least 9% of your money back. And if you believe that because a possible recession is looming, it isn’t possible, remember this piece of information: real estate is hyper-local. What you may see in one part of the country is different in another. San Antonio is a part of the country that thrives when things get complicated. Our military and the government-based economy will help us outpace inflation. It’s happened in the past, and it will happen again.

Have Any Questions?

Bottom line, regardless of where you're at in your journey, we have the tools, the EXPERIENCE, and the desire to help those that we represent GROW WEALTH, and are happy to meet with you wherever you are on your journey. Just shoot us a text at 210-801-9115 24/7 and we will get you set up with one of our experts in this field to discuss. Real Estate is a great hedge against inflation and we are happy to help in any capacity!

Contact us at 210-801-9115 or send us a message here if you want more guidance on protecting against inflation and succeeding in the rental market. LRG is home to many specialists with the proper experience, and we are happy to be your mentors. In the end, we want to ensure you’re informed. As a champion of the regular family, we always want to see y’all win.