Is Groom, Texas Good for Airbnb Investment?

To start an Airbnb in Groom, Texas, begin by researching local regulations through Carson County and the City of Groom offices, as this small town (population ~600) likely has minimal short-term rental restrictions but may require basic business licenses or permits from the city clerk. Find a suitable property by contacting local real estate agents like those at Panhandle Plains Realty or searching online platforms, focusing on properties near Interstate 40 since Groom serves as a Route 66 stop with attractions like the Leaning Water Tower and Cross of Our Lord Jesus Christ. Obtain necessary permits by visiting Groom City Hall to apply for any required business licenses (typically $25-100 annually) and ensure compliance with fire safety codes through the local fire department. Furnish the property with essential amenities including reliable Wi-Fi, air conditioning (crucial for Texas heat), comfortable bedding, kitchen basics, and Route 66 themed decor to appeal to travelers, budgeting approximately $3,000-8,000 for a complete setup. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting the historic Route 66 location and proximity to Amarillo (20 miles east), setting competitive rates around $60-120 per night based on local hotel prices. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating with local cleaning services like those in nearby Amarillo, and maintaining the property regularly while building relationships with neighbors and local businesses to enhance the guest experience in this small Texas Panhandle community.

To identify profitable short-term rental properties in Groom, Texas, focus on properties within 2-3 miles of Interstate 40 and Highway 207 intersection, as this small Panhandle town of approximately 574 residents primarily serves as a stopover for travelers between Amarillo and Oklahoma City. Target 2-4 bedroom single-family homes or mobile homes priced between $30,000-$80,000 with good highway visibility, adequate parking, and reliable internet connectivity, as the area lacks luxury accommodations and serves budget-conscious travelers, truckers, and occasional tourists visiting the famous "Leaning Water Tower of Texas" landmark. Conduct pricing analysis using AirDNA and Mashvisor to identify the limited competition (likely fewer than 5-10 active STRs in the area), with nightly rates typically ranging $60-$120 depending on property size and amenities. Research existing listings on Airbnb and VRBO within a 20-mile radius including Claude and Panhandle to understand occupancy patterns, which likely peak during summer travel months and hunting seasons. Utilize tools like STR Helper for market analysis, coordinate with Gray County appraisal district for property values, and leverage Google Trends to track search volume for "Groom Texas lodging" while considering the town's strategic position as a fuel and rest stop along the historic Route 66 corridor, though success will depend heavily on competitive pricing and consistent availability for transient travelers rather than destination tourism.

To obtain an Airbnb/STR permit in Groom, Texas, you will need to contact the City of Groom directly at their city hall located at 200 Broadway Street or call (806) 248-7131, as this small municipality likely handles permits through their general business licensing process rather than having a dedicated STR department. Required documents typically include a completed business license application, property deed or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental property, and a signed affidavit acknowledging compliance with local zoning ordinances. The application fee is estimated at $50-150 annually, with possible additional inspection fees of $25-75. The timeline for approval is approximately 2-4 weeks from submission of complete application materials. Specific Groom requirements likely include compliance with residential zoning restrictions (STRs may only be permitted in certain zones), maintaining adequate parking spaces (minimum 2 spaces per unit), ensuring the property meets fire safety codes including smoke detectors in all bedrooms and common areas, providing emergency contact information to the city and neighbors within 150 feet, and adhering to occupancy limits based on bedroom count (typically 2 guests per bedroom plus 2 additional). You must also register with the Texas Comptroller for state tax purposes and may need to collect and remit local hotel occupancy tax if applicable.

Short-term rentals (STRs) are generally legal in Groom, Texas, as this small town in Carson County does not appear to have specific municipal ordinances prohibiting or heavily regulating STR operations as of 2024. Like most rural Texas communities, Groom likely falls under state regulations which generally permit STRs unless locally restricted. The town, with a population under 600 people, has minimal zoning restrictions and no known prohibited areas for STRs, though operators must still comply with basic safety requirements, tax obligations including state and local occupancy taxes, and any applicable homeowners association rules. There have been no recent significant legal changes specific to Groom regarding STR regulations, and the permissive approach reflects the town's rural character and limited regulatory infrastructure. Property owners should verify current local requirements with Carson County and ensure compliance with state tax registration requirements through the Texas Comptroller's office.

The best areas for Airbnb investment in Groom, Texas are primarily along Interstate 40 near the Leaning Water Tower attraction and the historic downtown district around Highway 207. The I-40 corridor is attractive because it captures road trip travelers and tourists visiting the famous Leaning Water Tower of Texas, a quirky roadside attraction that draws thousands of visitors annually who need overnight accommodations. The downtown area near the railroad tracks offers charm for guests interested in small-town Texas experiences and railroad history tourism. Properties near the Groom Cross, one of the largest crosses in the Western Hemisphere erected in 1995, attract religious tourists and pilgrims making spiritual journeys. The agricultural areas on the outskirts can appeal to agritourism visitors and those seeking rural retreats. Business travelers working in the oil and gas industry, wind energy sector, and agricultural businesses also create steady demand, particularly for properties with easy highway access for workers commuting to nearby Amarillo or Pampa operations.

In Groom, Texas, Airbnb properties are subject to the state hotel occupancy tax of 6% on gross rental receipts, which applies to stays of less than 30 consecutive days. Carson County, where Groom is located, does not impose an additional county hotel occupancy tax as of 2023. The City of Groom, being a small municipality with a population under 1,000, does not levy a separate municipal hotel occupancy tax. Texas requires hosts to register for a hotel occupancy tax permit through the Texas Comptroller's office and remit taxes monthly if collections exceed $500 per month, or quarterly if less than $500 monthly. Airbnb automatically collects and remits the state tax on behalf of hosts for bookings made through their platform since 2017, but hosts remain responsible for ensuring compliance and may need to file returns even when Airbnb collects the tax. Stays of 30 days or longer are exempt from hotel occupancy taxes, and certain government and nonprofit organization bookings may qualify for exemptions with proper documentation.

To start an Airbnb in Groom, Texas, the total costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $120,000-$150,000 for a median-priced home 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 expenses including professional photography, listing creation, welcome materials, and basic renovations would cost $3,000-$5,000. Permits and fees are minimal in Groom, estimated at $500-$1,000 for business licenses and any required local permits. Insurance including liability and property coverage specifically for short-term rentals would cost $2,000-$3,000 annually. Utilities setup and deposits for electricity, water, gas, internet, and cable would require $1,000-$1,500. First six months of operating costs including utilities ($600/month), cleaning supplies and services ($300/month), maintenance reserves ($200/month), platform fees to Airbnb ($150/month), and marketing expenses ($100/month) would total approximately $8,100. Additional considerations include property taxes, ongoing maintenance, and potential property management fees if not self-managed.

Airbnb properties in Groom, Texas, a small town along Route 66 with approximately 574 residents, face unique profitability challenges due to limited demand and seasonal tourism patterns. Properties in Groom typically generate $15,000-$25,000 annually in gross revenue, with average daily rates ranging from $65-$95 for entire homes and occupancy rates averaging 35-45% annually, peaking during summer months when Route 66 travelers and Palo Duro Canyon visitors pass through. Operating expenses including utilities ($150-$200 monthly), cleaning fees ($40-$60 per turnover), property management (15-20% of revenue), insurance ($1,200-$1,800 annually), and maintenance ($2,000-$3,500 annually) typically consume 60-70% of gross revenue. Net profit margins generally range from 15-25%, with successful properties earning $3,000-$6,000 annually in net income. Success factors include strategic positioning near Interstate 40, competitive pricing for the rural market, exceptional guest experiences highlighting local attractions like the Leaning Water Tower and Cross of Our Lord Jesus Christ, and efficient cost management. Properties that cater to motorcycle groups, vintage car enthusiasts, and families exploring Route 66 tend to perform better, with some hosts reporting 20-30% higher occupancy rates by targeting these niche markets and maintaining strong relationships with local businesses for guest referrals.

Airbnb investments in Groom, Texas can expect annual ROI of 8-12% based on the rural West Texas market dynamics, with cash-on-cash returns typically ranging from 6-10% depending on property acquisition costs and financing structure. Properties in Groom, located along historic Route 66 with approximately 574 residents, benefit from steady tourist traffic visiting the famous Leaning Water Tower and cross-country travelers, generating average daily rates of $75-95 during peak seasons and $50-70 during off-peak periods. Initial profitability typically occurs within 18-24 months for well-positioned properties, with occupancy rates averaging 45-60% annually due to the town's unique roadside attractions and proximity to Amarillo (40 miles east). Investment properties ranging from $80,000-150,000 can generate gross rental income of $12,000-20,000 annually, with net operating income after expenses (cleaning, utilities, maintenance, platform fees) typically yielding 35-45% profit margins, making Groom a viable market for investors seeking steady returns in the rural hospitality sector.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental investment properties across markets including Groom, Texas. For the Groom area, investors can work with local real estate agents like Amarillo-based Coldwell Banker First Equity Realty and RE/MAX Concepts, who have experience with investment properties in the Texas Panhandle region. National services include Awning (formerly RedAwning), which provides end-to-end Airbnb investment services, and Mashvisor, an analytics platform that helps identify profitable rental properties. Local property management companies like Panhandle Property Management and High Plains Real Estate Services can assist with both acquisition and ongoing management of short-term rentals. Additional national resources include BiggerPockets for networking and education, Roofstock for turnkey rental properties, and AirDNA for market analysis and revenue projections specific to the Groom market.