San Antonio, TX, is one of the fastest-growing cities in the country, and its rental market is evolving to meet the needs of a diverse and expanding population. With steady job growth, rising housing costs, and increased in-migration from more expensive states, landlords in San Antonio have an opportunity to provide flexible, affordable housing while building lasting value.
Whether you’re exploring long-term leases, short-term rentals, or coliving rental models like PadSplit, understanding San Antonio’s zoning, market dynamics, and neighborhood opportunities is key to maximizing your rental income—and your community impact.
Why San Antonio is a strong rental market
San Antonio has long been considered one of the more affordable cities in Texas, but rising demand and limited housing inventory are creating challenges for renters. As of 2025, average monthly rents range from $1,300 to $1,550, and nearly 49% of households in the city are renters.
Like other major Texas cities, San Antonio has a growing population of cost-burdened renters. Many working residents—especially in healthcare, military, hospitality, and construction sectors—now spend more than 30% of their income on rent. Affordable and workforce housing options are increasingly difficult to find, especially in high-opportunity areas near job centers.
For landlords who can provide compliant, cost-effective rental solutions, San Antonio offers consistent demand and opportunities for growth, particularly through shared housing models that help maximize space and revenue.
San Antonio’s job market and growth drivers
San Antonio’s economy is supported by a mix of public and private sector industries, with strong demand from military families, healthcare workers, students, and service industry employees. The city’s growth is fueled by both population increases and economic expansion.
Key industries include:
- Military and defense: Joint Base San Antonio (including Lackland, Fort Sam Houston, and Randolph) provides tens of thousands of jobs and drives off-base rental demand.
- Healthcare and biosciences: Major systems like Methodist Healthcare, Baptist Health, and UT Health San Antonio create housing demand near medical campuses.
- Tourism and hospitality: The Alamo, River Walk, and convention center attract steady visitor traffic and short-term rental potential.
- Higher education: The University of Texas at San Antonio (UTSA) and Texas A&M-San Antonio bring student, staff, and faculty renters to surrounding neighborhoods.
- Finance and cybersecurity: Companies like USAA and growing defense tech startups are increasing demand for housing near job hubs.
Understanding zoning and rental regulations in San Antonio
Texas is a landlord-friendly state with no rent control, but San Antonio enforces specific rules around short-term and shared housing. Compliance is essential to avoid fines or violations.
- Short-term rentals (STRs): STRs are legal but require city registration, annual permit renewal, and zoning approval. Type 1 STRs (owner-occupied) and Type 2 STRs (non-owner-occupied) are subject to different rules. Type 2 STRs are not permitted in all residential zones.
- Long-term rentals: Landlords must comply with health and safety codes, but there is no city-wide rental registration requirement for single-family properties.
- Coliving rentals: Coliving rental models like PadSplit are legal but must follow zoning, fire safety, and occupancy laws. Shared housing works best in R-4, MF-33, or mixed-use zones, where more than three unrelated adults can live in a single unit.
Best neighborhoods for long-term rentals
Harlandale
- Why invest? This working-class neighborhood offers investors affordable home prices and reliable rental demand.
- Rental market insight: Homes in Harlandale lease quickly due to proximity to highways and job centers.
- Best property types: Single-family homes, ranch-style houses, and small duplexes are common and accessible to investors.
- Ideal tenants: Blue-collar workers, families, and long-time residents typically seek affordable monthly rents.
Windcrest / Kirby
- Why invest? These established suburbs provide a quieter atmosphere and access to major employers like Rackspace and area hospitals.
- Rental market insight: The suburban feel and larger lot sizes appeal to families and renters seeking more space.
- Best property types: Brick homes, townhomes, and mid-sized single-family properties are in high demand.
- Ideal tenants: Public-sector employees, military veterans, and small families often rent in this area.
Best neighborhoods for short-term rentals
Downtown San Antonio / King William
- Why invest? This historic and highly walkable area offers strong tourism traffic year-round.
- Rental market insight: Short-term rentals perform well during festivals and conventions but must follow local licensing and zoning rules.
- Best property types: Historic homes, condos, and STR-zoned townhomes are best suited for tourist stays.
- Ideal guests: Vacationers, business travelers, and couples exploring the River Walk often stay in this district.
Southtown / Lavaca
- Why invest? These creative, culturally vibrant neighborhoods are located near the River Walk and attract niche travelers.
- Rental market insight: Homes in this area often command premium nightly rates when properly permitted and furnished.
- Best property types: Bungalows, artist lofts, and modern in-fill homes are ideal for guests seeking an authentic San Antonio experience.
- Ideal guests: Creative professionals, food lovers, and tourists looking for a local vibe stay in this area.
Best neighborhoods for coliving rentals
West San Antonio (Edgewood area)
- Why invest? This area contains many older, spacious homes that can be configured for shared housing.
- Rental market insight: The neighborhood serves renters working in trades, service, and logistics industries.
- Best property types: Homes with four or more bedrooms and shared common areas work well for room-based leasing.
- Ideal tenants: Contractors, shift workers, and cost-conscious renters often choose coliving setups in this area.
East San Antonio
- Why invest? This side of the city offers large homes at affordable prices and proximity to Fort Sam Houston.
- Rental market insight: Coliving rentals in East San Antonio often stay full due to demand from military families and essential workers.
- Best property types: Larger single-family homes with multiple bedrooms and bathrooms support shared housing models.
- Ideal tenants: Military personnel, new residents, and workforce renters benefit from low-cost, flexible housing options.
Emerging neighborhoods to watch
Denver Heights
- Why invest? This neighborhood is experiencing revitalization and is just minutes from downtown.
- Rental market insight: Investors are seeing rising demand from young professionals and artists moving into the area.
- Best property types: Renovated bungalows, duplexes, and single-family homes with ADU potential are ideal.
- Ideal tenants: Creative workers, renters priced out of downtown, and long-term residents benefit from newer amenities.
Palm Heights
- Why invest? Located in central San Antonio, this area offers affordable homes and improving infrastructure.
- Rental market insight: Palm Heights is seeing increased interest from both renters and small-scale investors.
- Best property types: Cottage-style homes, ranch houses, and properties with backyard space are ideal for conversions.
- Ideal tenants: Small families, budget-conscious renters, and those seeking convenient access to transit corridors often live here.
Sustainability and energy efficiency trends
With high summer temperatures and aging housing stock, energy efficiency is increasingly important for landlords. Improvements not only lower utility costs but also appeal to cost-conscious and environmentally aware tenants.
- High-efficiency HVAC systems and smart thermostats
- Insulation and weatherization improvements for older homes
- Solar panel incentives and CPS Energy rebates for efficient appliances
- Xeriscaping and water-saving fixtures in drought-prone neighborhoods
These upgrades can increase long-term ROI while making rental properties more competitive.
Financing and tax considerations for San Antonio landlords
- Property taxes: Texas has no state income tax, but San Antonio’s property tax rates are among the highest in the country.
- Financing options: DSCR loans, FHA 203(k) rehab loans, and private financing are common among investors targeting value-add opportunities.
- Insurance considerations: Older homes may require roof, foundation, or HVAC upgrades to meet insurer requirements.
- Local incentives: Some neighborhoods offer access to opportunity zone tax benefits and historic preservation credits.
Make the most of San Antonio’s rental market
San Antonio is an ideal city for landlords who want to invest in growing communities, support workforce housing, and increase cash flow. Whether you’re pursuing long-term leases in Harlandale, STRs in King William, or coliving in Edgewood, your rental strategy can help meet the demand for flexible, affordable living.
Coliving rental models like PadSplit allow landlords to reduce vacancies, increase revenue, and serve renters who are often priced out of traditional lease options. It’s a smart, scalable way to grow your portfolio while making a real difference.
Join PadSplit today to increase your rental revenue while helping address San Antonio’s growing need for affordable, workforce-friendly housing.
The information provided in this blog post is for general informational purposes only. It should not be construed as legal, financial, or professional advice. The content is intended to provide general guidance and should not be relied upon for making specific decisions.
PadSplit strongly recommends consulting with qualified legal counsel, licensed financial advisors, tax professionals, or other relevant experts for advice concerning your specific situation and investment needs. PadSplit makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information contained in this post.
