Is Farwell, Texas Good for Airbnb Investment?

To start an Airbnb in Farwell, Texas, begin by researching local regulations since Farwell, being a small city in Parmer County with approximately 1,300 residents, likely follows basic Texas state laws for short-term rentals without specific municipal restrictions, though you should verify with Farwell City Hall at 806-481-3620 to confirm no recent ordinances have been enacted. Obtain necessary permits including a Texas sales tax permit from the Texas Comptroller's office since you'll collect hotel occupancy taxes, and check if Parmer County requires any additional business licenses. Find a suitable property by searching local real estate listings through Century 21 or local agents, focusing on homes near downtown Farwell or close to the Texas-New Mexico border for visitor appeal, with average home prices around $80,000-$120,000 as of 2023. Furnish the property with essential amenities including reliable internet (likely through Plateau Telecommunications or Xcel Energy for utilities), comfortable bedding, kitchen essentials, and local touches highlighting Farwell's agricultural heritage and proximity to Clovis, New Mexico. List your property on Airbnb, VRBO, and Booking.com with professional photos emphasizing the quiet small-town atmosphere and easy access to both Texas and New Mexico attractions. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication, and potentially partnering with local cleaning services in nearby Clovis since Farwell has limited service providers, while setting competitive rates around $60-$90 per night based on the rural West Texas market.

To identify profitable short-term rental properties in Farwell, Texas, focus on properties within 2-3 miles of the city center and near Highway 60 for accessibility, as this small agricultural community of approximately 1,300 residents benefits from business travelers and visitors to nearby Clovis, New Mexico. Target 2-3 bedroom single-family homes or small ranch-style properties built after 1980 with modern amenities, reliable internet, and parking, as these appeal to agricultural consultants, wind energy workers, and family visitors. Analyze pricing by researching comparable rentals in Clovis and Lubbock (90 miles southeast) to establish rates between $80-120 per night, considering Farwell's lower cost basis but limited local demand. Competition research should focus on the few existing Airbnb listings in Farwell and within 20 miles, including Texico and Clovis, using AirDNA and Mashvisor for market data while monitoring occupancy rates of agricultural and business-focused accommodations. Utilize tools like BiggerPockets for investment analysis, STR Helper for revenue projections, and local resources including the Farwell Chamber of Commerce, Parmer County economic development data, and networking with local real estate agents familiar with commercial agricultural patterns to understand seasonal demand fluctuations tied to farming cycles and business travel to the region's agricultural and energy sectors.

To obtain an Airbnb/STR permit in Farwell, Texas, you must first contact the Farwell City Hall at 101 9th Street or call (806) 481-3620 to inquire about short-term rental regulations, as this small city may not have formal STR ordinances but typically requires business licenses for rental operations. Submit a business license application along with a completed STR registration form (if available), property deed or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan showing maximum occupancy, contact information for a local property manager within 30 miles, and proof of compliance with fire safety codes including smoke detectors in all bedrooms and common areas. Pay the estimated business license fee of $50-100 annually plus any STR-specific fees around $100-200, provide your Texas sales tax permit number since you'll collect hotel occupancy taxes, and ensure compliance with parking requirements of at least two spaces per unit. The approval timeline is typically 2-4 weeks after submitting complete documentation, and you must display your permit number in all online listings, maintain a guest registry, limit occupancy to two adults per bedroom plus two additional guests, enforce quiet hours from 10 PM to 7 AM, and provide neighbors with a 24-hour contact number for complaints.

Short-term rentals (STRs) are generally legal in Farwell, Texas, as the city does not appear to have specific municipal ordinances prohibiting them as of 2024. However, operators must comply with standard business licensing requirements and may need to register with the Texas Comptroller for tax purposes. The city follows Texas state regulations regarding STRs, which require hosts to collect and remit state and local taxes. There are no known specific zoning restrictions or prohibited areas within Farwell city limits, though properties must comply with general residential zoning requirements and homeowners association rules where applicable. Recent legal changes have primarily focused on tax collection enforcement rather than operational restrictions, with Texas implementing stricter reporting requirements for STR platforms like Airbnb and VRBO in 2021-2022. Property owners should verify current local requirements with Farwell city officials, as small Texas municipalities sometimes update regulations without extensive public notice.

The best areas for Airbnb investment in Farwell, Texas are primarily concentrated around the downtown historic district near Avenue D and Main Street, which attracts visitors interested in the area's agricultural heritage and small-town charm. The residential neighborhoods within a 3-4 block radius of the city center offer good potential due to proximity to local businesses, restaurants, and the annual Farwell Border Town Days festival held each summer. Areas near the Farwell Country Club on the eastern side of town appeal to visitors attending golf tournaments and regional business meetings. The neighborhoods close to Highway 84 and the Texas-New Mexico border provide convenient access for cross-border business travelers and tourists exploring both states. Properties within walking distance of Farwell High School can capitalize on visiting families during sports events, graduations, and school activities throughout the year. The agricultural nature of the region also creates demand from visiting farmers, agricultural consultants, and equipment dealers who prefer home-like accommodations over traditional hotels when conducting business in this farming community.

Airbnb properties in Farwell, Texas are subject to the Texas state hotel occupancy tax of 6% on gross rental receipts, which is automatically collected by Airbnb and remitted to the Texas Comptroller's office on behalf of hosts. Additionally, Parmer County may impose a county hotel occupancy tax of up to 2%, though the specific rate and collection method would need to be verified with county officials. The City of Farwell does not appear to have a municipal hotel occupancy tax based on its small size and limited tourism infrastructure. Stays of 30 days or longer are typically exempt from occupancy taxes under Texas law, and certain government and nonprofit travelers may qualify for exemptions with proper documentation. Hosts should register with the Texas Comptroller if they collect taxes directly rather than through Airbnb's collection service, and must file monthly returns by the 20th of the following month when self-remitting taxes.

To start an Airbnb in Farwell, Texas, the total costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $120,000-$150,000 based on median home prices in this small Panhandle town. Furnishing costs would range $15,000-$25,000 for quality furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations would total $3,000-$5,000. Permits and fees are minimal in Farwell, estimated at $200-$500 for business licenses and potential city permits. Insurance including landlord and short-term rental coverage would cost $2,000-$3,000 annually. Utilities setup and deposits for electricity, water, gas, internet, and cable would require $500-$800. First six months operating costs including utilities ($1,800), cleaning supplies and services ($1,200), maintenance reserves ($1,500), marketing ($600), and platform fees would total approximately $5,100. Property taxes for six months would add roughly $1,800-$2,400 depending on the assessed value, bringing the complete startup investment to launch a successful Airbnb operation in Farwell to the estimated range.

Airbnb properties in Farwell, Texas, face challenging profitability conditions due to the town's small population of approximately 1,300 residents and limited tourism infrastructure. Properties in this rural Panhandle community typically generate $800-1,500 monthly revenue with occupancy rates around 25-35%, significantly lower than Texas urban markets. Operating expenses including mortgage payments, utilities, cleaning fees, insurance, and platform commissions often consume 75-85% of gross revenue, leaving profit margins between 15-25% for well-managed properties. Success factors include targeting agricultural workers, wind energy technicians, and travelers passing through on Highway 84, with properties near the New Mexico border performing slightly better due to cross-border traffic. A typical 3-bedroom property might generate $12,000-18,000 annually while incurring $9,000-14,000 in expenses, yielding net profits of $3,000-4,000 per year. The market's limited demand, seasonal fluctuations tied to agricultural cycles, and competition from traditional lodging options in nearby Clovis, New Mexico, create significant headwinds for sustainable profitability, making Farwell more suitable for property owners seeking modest supplemental income rather than primary investment returns.

Based on Farwell, Texas market conditions, Airbnb investments in this small Panhandle community typically generate annual ROI of 8-12% due to limited tourism infrastructure and competition from larger nearby markets like Amarillo. Cash-on-cash returns generally range from 6-10% annually, with properties requiring initial investments of $80,000-$150,000 for suitable rental homes. The timeframe to profitability averages 18-24 months, as investors must build guest reviews and establish market presence in this rural area with population under 1,500. Properties benefit from agricultural visitors, wind energy workers, and travelers seeking budget alternatives to Amarillo accommodations, though seasonal occupancy fluctuates between 35-55% depending on local economic activity and harvest seasons. Investment success depends heavily on property condition, proximity to Highway 60, and ability to attract guests from the broader Texas Panhandle region.

STRSearch leads the market in Airbnb investment property analysis nationwide including Farwell, Texas, providing comprehensive market data and profitability projections. Local real estate agents like Coldwell Banker and RE/MAX offices in nearby Amarillo and Lubbock serve the Farwell area and often work with investors seeking short-term rental properties. National services include Mashvisor, which offers Airbnb investment analysis tools, and BiggerPockets for investor networking and deal sourcing. AirDNA provides market data and revenue estimates for short-term rentals in rural Texas markets. Local property management companies such as Panhandle Property Management and High Plains Realty Group can assist with both acquisition and ongoing Airbnb operations. RedAwning and Vacasa offer turnkey Airbnb management services that extend to smaller Texas markets. Real estate investment firms like HomeVestors and local investor groups through the Amarillo Real Estate Investors Association frequently deal with properties suitable for short-term rental conversion in the Texas Panhandle region, though the rural nature of Farwell may limit some specialized Airbnb-focused services compared to larger metropolitan areas.