10 Best Airbnb Markets in Texas

Texas, the second-largest state in the US by both population and land area, offers real estate investors a huge selection of towns and cities. However, to assure the highest possible returns when it comes to profitability, one must be aware of the top rental markets in Texas.

Investing in the Best Airbnb Markets in Texas

It would be a vast understatement to say that Texas has a plethora of investment properties. When it comes to Texas, it’s not a matter of supply. The Lone Star State has a sufficient supply to match the rising demand for real estate.

10 Best Airbnb Markets in Texas

Let's quickly examine the Texas real estate market's characteristics and the reasons why people find it to be so alluring before we answer that question.

Why Are Real Estate Investors Attracted to Texas?

These are a few of the prime reasons why Texas has some of the best investment properties in the nation.

• It is a state that is landlord-friendly. Being on the right side of the law always pays off. Texas is quite kind to landlords and offers them a wide range of benefits, so investors need not worry too much about legal issues.
• Its population is increasing at a steady rate. As more and more individuals continue to move to Texas, the demand for rental properties is still very high.
• It has a flourishing economy. The local housing market will always benefit if an economy is doing extraordinarily well. The greatest rental markets in Texas are characterized by robust economies, low unemployment rates, and high median earnings, all of which contribute to a healthy real estate market.
• No income taxes. Every moral person understands that paying taxes is the right and responsible thing to do. The beautiful thing about Texas is that this is not a concern for investors since it is one of the nine states without an income tax. This is great news for investors because it raises their return on investment.
• The properties are reasonably priced. A town or city's affordability is one of the factors that makes it one of the finest rental markets. Texas's high land supply and low cost of living both contribute to the state's low house prices.

Despite the COVID-related interruptions, demand for Texas real estate was maintained at a solid level as 2021 came to an end. Overall, it's still a fantastic spot to make real estate investments, especially for individuals looking to expand their investment portfolios, create passive income streams, or start careers as holiday rental owners or managers.

However, just because the state provides a very large selection for investors does not automatically imply that every property in it is a gold mine. Despite the many reasons why people fall in love with Texas, you still need to do your research if you want to find the rental markets in Texas that will yield the highest returns.

The Top Texas Short-term Rental Markets for Investors

They say everything is big in Texas. The real estate market there is comparable. How can an investor be sure they obtain the highest return on a Texas real estate investment with hundreds of locations and tens of thousands of options? Which Texas markets for short-term rentals are the best?

The top ten Texas markets are shown below based on several profitability indicators (all metrics as per Mashvisor) and draw factors. Every market has a unique blend of benefits and drawbacks. Investors should take the time to carefully compare and contrast the various kinds of data to determine which ones correspond with their investment objectives.

Best Texas Market for Short-term Rentals

Consider entering the short-term rental market, like that of Airbnb, if you're a real estate investor trying to increase the profitability of your Texas investment properties. According to research, short-term rentals have seen a huge increase in their market share in travel lodging since the pandemic started, reaching as high as 41% in 2020.

The major short-term rental markets in Texas are shown below:

Abilene, Taylor

Despite having a low price-to-rent ratio, Abilene nevertheless generates more than $2,700 in monthly rental income thanks to its 62.99 percent occupancy rate. Its museums and world-class attractions draw tourists and history enthusiasts.

• Median Property Price: $262,209
• Average Price per Square Foot: $130.88
• Days on Market: 35
• Listings: 118
• Airbnb Occupancy Rate: 62.99%
• Airbnb Rental Income: $2770.18
• Airbnb Daily Rate: $175
• Airbnb Cash-on-Cash Return: 6.92%
• Price-to-Rent Ratio: 7.89 (low)
• Walk Score: 30.4

Boerne, Bexar

Even while the price-to-rent ratio in the city tends to favor traditional rentals, its short-term rental game is not far behind with an occupancy rate of almost 50% and a cash-on-cash return of 2.79 percent, making it one of the finest areas in Texas for real estate investors.

• Median Property Price: $887,297
• Average Price per Square Foot: $266.85
• Days on Market: 78
• Listings: 115
• Airbnb Occupancy Rate: 48.82%
• Airbnb Rental Income: $3761.66
• Airbnb Daily Rate: $242
• Airbnb Cash-on-Cash Return: 2.79%
• Price-to-Rent Ratio: 19.66 (medium)
• Walk Score: 71

Ennis, Ellis

With a staggering $5,818.90 monthly income at a close to 72 percent occupancy rate and a cash-on-cash return of 7.83 percent, Ennis is one of the top Airbnb rental income earners in the entire state of Texas. It simply makes sense for investors to want a piece of the action when the figures are that good.

• Median Property Price: $498,533
• Average Price per Square Foot: $193.09
• Listings: 10
• Airbnb Occupancy Rate: 71.89%
• Airbnb Rental Income: $5,818.9
• Airbnb Daily Rate: $218
• Airbnb Cash-on-Cash Return: 7.83%
• Price-to-Rent Ratio: 7.14 (low)
• Walk Score: 78

Fredericksburg, Gillespie

Even with a pandemic, Fredericksburg in Gillespie county maintains a thriving tourism sector and is the center of the Texas wine industry. When setting up shop in this unassuming city, an investor is most likely to obtain a high return on their investment.

• Median Property Price: $851,905
• Average Price per Square Foot: $404.61
• Days on Market: 133
• Listings: 581
• Airbnb Occupancy Rate: 51.98%
• Airbnb Rental Income: $4,388.39
• Airbnb Daily Rate: $284
• Airbnb Cash-on-Cash Return: 3.79%
• Price-to-Rent Ratio: 16.18 (medium)
• Walk Score: 69

Marfa, Presidio

One of the top short-term rental markets in Texas is Marfa, which is known throughout the world for its art and culture and draws visitors from all walks of life. Even though the town has a small population, tourism is growing, making it a profitable place for real estate investors to invest.

• Median Property Price: $645,308
• Average Price per Square Foot: $326.41
• Days on Market: 137
• Listings: 117
• Airbnb Occupancy Rate: 52.19%
• Airbnb Rental Income: $3,094.43
• Airbnb Daily Rate: $199
• Airbnb Cash-on-Cash Return: 2.93%
• Price-to-Rent Ratio: 17.38 (medium)
• Walk Score: 60

South Padre Island, Cameron

South Padre Island, well-known for its white sand beaches, is a terrific vacation spot for families as well as a popular spring break destination.

• Median Property Price: $814,099
• Average Price per Square Foot: $414.38
• Days on Market: 62
• Listings: 343
• Airbnb Occupancy Rate: 50.91%
• Airbnb Rental Income: $3,284.15
• Airbnb Daily Rate: $229
• Airbnb Cash-on-Cash Return: 1.88%
• Price-to-Rent Ratio: 20.66 (high)
• Walk Score: 51

Denison, Grayson

Denison’s history is rich in flavor and personality, and its residents are dedicated to preserving the unique history. The Texas Commission on the Arts endorsed Denison as one of the original arts and culture districts making it appealing for visitors interested in arts and culture.

• Median Property Price: $320,575
• Average Price per Square Foot: $179.26
• Days on Market: 18
• Listings: 98
• Airbnb Occupancy Rate: 55%
• Airbnb Rental Income: $1,950
• Airbnb Daily Rate: $174
• Airbnb Cash-on-Cash Return: 2.42%
• Price-to-Rent Ratio: 21.75 (high)
• Walk Score: 67

Houston, Harris

Houston, one of the most diverse cities in the nation, has been dubbed "the American city of the future" and described as "smart, skilled, and soulful." That's a lot of praise, and in our opinion, it's merited. From bayou-side hikes and Asiatown food crawls to Downtown discoveries and tours of local music and art, there is a lot to do in Houston.

• Median Property Price: $920,835
• Average Price per Square Foot: $386.13
• Days on Market: 119
• Listings: 11,719
• Airbnb Occupancy Rate: 55%
• Airbnb Rental Income: $1,810
• Airbnb Daily Rate: $150
• Airbnb Cash-on-Cash Return: 1.92%
• Price-to-Rent Ratio: 37.78 (high)
• Walk Score: 41.61

Keller, Tarrant

With more than 300 acres (121 hectares) of developed property for 11 park sites and 23 miles (37.01 km) of hiking and bicycling trails, Keller, a suburban community in Tarrant County, is primarily residential. "Successfully mixing big-city comforts with small-town charm," the city claims in its advertising. It draws so many visitors due to its proximity to the Trinity River.

• Median Property Price: $700,418
• Average Price per Square Foot: $239.51
• Days on Market: 52
• Listings: 96
• Airbnb Occupancy Rate: 72%
• Airbnb Rental Income: $2,770
• Airbnb Daily Rate: $207
• Airbnb Cash-on-Cash Return: 1.76%
• Price-to-Rent Ratio: 22.99 (high)
• Walk Score: 71

Tyler, Smith

For locals, and visitors, as well as those attending conventions and business meetings, Tyler offers a variety of year-round attractions.

• Median Property Price: $489,041
• Average Price per Square Foot: $180.63
• Days on Market: 82
• Listings: 191
• Airbnb Occupancy Rate: 67%
• Airbnb Rental Income: $2,097
• Airbnb Daily Rate: $148
• Airbnb Cash-on-Cash Return: 1.78%
• Price-to-Rent Ratio: 26.91 (high)
• Walk Score: 75