San Antonio real estate investing: what the 2026 numbers say

Where the boomtown pitch misfires

San Antonio is the second fastest-growing city in the country by raw count. It added 43,217 residents between July 2023 and July 2024, behind only Fort Worth, according to the Census Bureau. Every syndicator's deck opens on that line, then asks for your money.

Here is what the deck skips. The median home in the city actually sold for $264,825 in the three months ending August 2026, down 1.9% from a year earlier, and it sat 58 days before closing at 97% of list, per Redfin. Rents slipped in the same window. So the city is filling up while its prices and rents drift down. That is a strange thing for a boomtown to do, and it should change how you buy here.

One note before the numbers. This is general information, not tax, legal or investment advice. Rates and rules move, so confirm every figure with the Census, the Bexar Appraisal District and a CPA before you write an offer.

The numbers that anchor a San Antonio deal

Start with sources that are not trying to sell you a house. Five of them frame the whole analysis.

The $235,700 Census value and the $264,825 Redfin sale price are not a contradiction. The Census number is what owners estimate their homes are worth across the whole city. The Redfin number is what changed hands recently, weighted toward the houses people list. Underwrite a purchase off the transaction figure. Anchor a rent off the Zillow three-bedroom rent of $1,673, which is the current ask for the kind of standard 3/2 an investor buys.

Two more Census lines matter. San Antonio owns its homes at just 52.2%, so more than four in ten households rent, which is a deep tenant pool for a landlord. Median household income is $65,056 and 17.1% of residents live in poverty. That mix, modest incomes against cheap-ish houses, is exactly what makes the rent-to-price ratio look tempting on a listing site and what makes the operating lines bite once you own the place. Read both halves before you buy.

The 1% rule, run against a real San Antonio house

The 1% rule says monthly rent should reach 1% of the purchase price. On a $264,825 house that means $2,648 a month. A typical San Antonio three-bedroom rents for $1,673. That is 0.63%, and it is 0.63% before a single expense.

Quoting that gross ratio as if it were your return is the most common mistake made about this market, and it is worth being blunt: it is fiction. The gap between $1,673 and the $2,648 the rule wants is not a rounding error. It is the difference between a rental that pays you and one you feed every month, and in San Antonio the lines that open that gap are property tax and insurance.

Run it the other way. To reach 1% on this house you would need $2,648 in rent, and nothing in the Zillow data says a standard San Antonio three-bedroom commands that. It commands $1,673. That figure slipped about $90 over the past year across all sizes, so the number you are counting on sits below the rule and keeps drifting the wrong way. The rule is not close, and time is not helping.

Texas has no income tax. It takes it on the tax bill

Texas advertises no state income tax, and the pitch leans on it hard. The state makes the money back on the property-tax line, and that line is where a San Antonio rental lives or dies. The Tax Foundation puts the effective property tax rate on owner-occupied housing in Texas at 1.40%, and Bexar County sits above the state average. On a $264,825 house, 1.40% is about $3,708 a year, or $309 a month, off the top of your rent.

Now the part investors miss. Texas caps a homeowner's taxable value at a 10% increase per year, under Tax Code Section 23.23. A rental gets no such cap. Buy an investment house and its assessed value resets to what you paid, then floats with the market every year after. The 2023 relief that Texans voted in, which raised the school homestead exemption from $40,000 to $100,000 per the Comptroller, went to owner-occupants. Investors got only a temporary three-year cap of 20% a year on non-homestead property, which is a ceiling on how fast the pain grows, not relief from it.

How high is the real bill? The property-data firm Ownwell pegs Bexar County's median effective rate near 1.55%, a touch above the statewide 1.40%, and on a rental with no homestead cap that upper end is the number to plan around. Appeal it every year. The county's assessed value is a starting point, not a verdict, and a won protest is the cheapest cash flow you will ever add to a San Antonio deal.

A monthly pro forma, line by line

Slogans hide inside gross numbers, so put every line on the page. Here is one $264,825 San Antonio rental at the $1,673 market rent for a three-bedroom, financed with 25% down at a 30-year rate near 7%. The reserve percentages are assumptions you can change. The shape will not move much.

The mortgage rate is not a guess. Freddie Mac's survey put the 30-year fixed at 7.03% for the week ending September 24, 2026. Read the bottom line. Financed at that rate, this house bleeds about $477 a month. Pay cash and the same property throws off roughly $849 before debt, a cash-on-cash return near 3.9% on $264,825. That gap between the cash and financed outcomes is the whole reason San Antonio right now is a cash-buyer and off-market market, not a place to close a retail deal with a loan and wait.

Push on the assumptions and the shape barely moves. Put 40% down instead of 25% and the payment falls near $1,061, which still leaves the house about $212 in the red every month. You do not reach breakeven until roughly half down, around $132,000 in cash on a $265,000 house. Read that plainly. At a 7% rate a loan works against you on a retail San Antonio purchase, so the return has to come from paying cash or buying below market, not from the bank.

Insurance and the lines the pro forma hides

Insurance is no longer a small line, and the trend is documented. A 2025 Federal Reserve FEDS Note found the average monthly insurance cost per rental unit rose from $39 in 2019 to $68 in 2024, up more than 75% in real terms. That study covers apartment buildings, so treat it as direction, not a single-family quote, and San Antonio sits in a Texas hail and windstorm corridor that insurers price accordingly. Get a real bind on the exact house before you close. A premium a seller quotes from two years ago is a fantasy, and hail-damaged roofs are a frequent claim across South Texas.

The same study found landlords could not pass most of it on. Tenant rents rose only $7 to $12 a month from insurance since 2019, which means owners absorbed roughly 72 cents of every added dollar. Read that against a market where rents are already falling. If a turnkey seller hands you a pro forma with insurance at $60 and no vacancy reserve, you are reading a sales document, and the missing money is exactly where the promised return went.

The growth is real. The 2026 timing is not

The jobs behind the growth are real. Joint Base San Antonio supports 223,349 jobs and contributed $53.5 billion to the state economy in 2025, per the Texas Comptroller. Toyota builds the Tundra and Sequoia here with 3,700 direct workers and more than 5,600 at on-site suppliers, and in 2026 announced a $3.6 billion second line adding 2,000 jobs by 2030.

Now hold that against the price chart. The population grew 8% since 2020 and the median sale price still fell 1.9% over the past year. A plant that opens in 2030 does not pay your 2026 mortgage. New residents lift a market over a decade, through permits and payrolls, not through the price of the house you close on next month. Underwrite for today's rent and today's tax, treat the growth as a reason the exit is safer in ten years, and never pay a premium now for a boom the 2026 numbers have not delivered.

Neighborhood tiers, without the hype

Be suspicious of any page that lists ten San Antonio neighborhoods and attaches no numbers to them. That is the tell of an article written to rank, not to help. Current, reliable, per-neighborhood price and rent tables from one primary source do not exist, so read the city in tiers and confirm every deal with real comps.

The higher-price, thinner-yield tier runs through the northern suburbs like Stone Oak and Alamo Heights, where houses clear well past the city median and tenants stay longer. The middle is the maturing inner ring near the Pearl and Southtown, where price has outrun rent. The high-gross-yield tier is the cluster of lower-price South and West Side zips where the rent-to-price ratio looks best on paper and where turnover, older roofs and the uncapped tax bite hardest in practice. Pull your own comparables before you trust any of it. Our guides on running comps and calculating ARV walk through the method a lender will accept. Score a single zip at a time, the way Farmrix ranks owners, so you are comparing like with like instead of averaging three tiers that behave nothing alike.

Find the deal before it lists

The margin in San Antonio is in acquisition, because the MLS is where you pay retail for a sub-1% yield in a market with a heavy tax line. The investors who make it work buy off-market, from owners who want out before they list. That is where a ranked, mail-first approach earns its keep. Farmrix scores every owner in a San Antonio zip on how likely they are to sell in the next 6 to 12 months, ranks them, and prints and mails postcards to the top of that list, so your first call is with a seller already leaning toward the door. Pair it with clean owner data and you are not underwriting blind. The smallest package is 500 ranked owners and 500 postcards for $1,195, with data, printing and postage in the price.

Do three things before your next San Antonio offer. Pick one submarket and pull five real comps in it instead of trusting a city median that is drifting down. Build the pro forma with the property-tax line set at the market rate for a rental, not the capped homeowner rate. Then source the deal off-market, because a sub-1% yield bought at retail, in a city taxing it near 1.4% a year, is not an investment. It is a bet on a boom that has not shown up in the price.