Is Hondo, Texas Good for Airbnb Investment?

To start an Airbnb in Hondo, Texas, begin by researching local regulations through the City of Hondo Planning Department and Medina County offices, as Texas generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Obtain necessary permits including a Texas sales tax permit from the Comptroller's office, a City of Hondo business license (estimated $50-100 annually), and ensure your property meets fire safety and building codes through inspections. Find a suitable property by analyzing Hondo's tourism market near attractions like the Medina River and historic downtown, considering properties with 2-4 bedrooms that can accommodate families visiting for events or business travelers. Furnish the space with essential amenities including Wi-Fi, air conditioning (crucial for Texas heat), quality bedding, kitchen supplies, and local guidebooks highlighting Hondo's proximity to San Antonio (40 miles). List your property on Airbnb, VRBO, and Booking.com with professional photos, competitive pricing ($80-150/night estimated for Hondo market), and detailed descriptions emphasizing local attractions like the Hondo Historic District and nearby Medina Lake. Manage operations by establishing cleaning protocols between guests, implementing keyless entry systems, maintaining responsive communication, collecting and remitting Texas state sales tax (6.25%) plus any local hotel occupancy taxes, and ensuring compliance with homeowner's insurance requirements that cover short-term rental activities.

To identify profitable short-term rental properties in Hondo, Texas, focus on properties within 2-3 miles of downtown Hondo near Highway 90 and close to attractions like the Medina River and historic downtown district, as these areas attract visitors traveling between San Antonio and Del Rio. Target 2-4 bedroom single-family homes or ranch-style properties with outdoor spaces, pools, or unique Texas charm features, as these appeal to families and groups visiting for hunting, fishing, or business at nearby oil and gas operations. Analyze pricing by researching comparable STRs on Airbnb and VRBO in the $80-150 per night range, considering Hondo's proximity to San Antonio (45 minutes) may attract overflow guests during peak events like Fiesta or Rodeo season. Competition research should focus on the limited existing STR inventory in this smaller market of approximately 9,000 residents, identifying gaps in amenities or property types that aren't currently offered. Utilize tools like AirDNA for market analysis, STR Helper for revenue projections, and local resources including the Hondo Chamber of Commerce for event calendars, Medina County property records for acquisition research, and networking with local real estate agents familiar with investment properties in this emerging South Texas STR market that benefits from Eagle Ford Shale activity and recreational tourism.

To obtain an Airbnb/STR permit in Hondo, Texas, you must first contact the Hondo City Hall at 1014 18th Street or call (830) 426-3477 to inquire about short-term rental regulations, as the city may require a business license and special use permit for STR operations. You'll need to submit an application form along with required documents including proof of property ownership or lease agreement, liability insurance certificate (typically $1 million minimum), floor plan of the property, parking plan showing adequate guest parking, and contact information for a local property manager if you're not residing locally. The application fee is estimated at $100-300 for the initial permit plus potential inspection fees of $50-150, and you may need to pay annual renewal fees of approximately $75-200. The approval timeline typically takes 30-60 days depending on completeness of application and any required inspections. Hondo-specific requirements likely include compliance with residential zoning restrictions, maximum occupancy limits based on bedrooms and square footage, noise ordinance compliance, proper waste management arrangements, and maintaining the property's residential character. You must also register for city sales tax collection and remit the required hotel occupancy tax, and ensure the property meets all fire safety and building code requirements before receiving final approval to operate as a short-term rental.

Short-term rentals (STRs) are generally legal in Hondo, Texas, as the city does not have specific municipal ordinances prohibiting them as of 2024. However, operators must comply with standard business licensing requirements and may need to obtain a general business permit from the city. Properties used as STRs must meet basic safety and zoning requirements, with residential zoning typically allowing such uses unless specifically restricted by homeowners associations or deed restrictions. The city has not implemented the stricter regulations seen in larger Texas cities like Austin or San Antonio, though operators should still comply with state tax requirements including hotel occupancy taxes. Recent years have seen minimal changes to STR regulations in Hondo, with the city maintaining a relatively permissive approach compared to urban areas that have enacted caps, registration requirements, or geographic restrictions. Property owners should verify current zoning compliance and any applicable HOA restrictions, as these remain the primary limitations on STR operations in the area.

The best areas for Airbnb investment in Hondo, Texas include the Historic Downtown District near Main Street, which attracts visitors interested in the town's Western heritage and proximity to the Medina River for fishing and outdoor activities. The area around Highway 90 corridor is ideal due to its accessibility for business travelers and tourists traveling between San Antonio and Del Rio, offering convenience for short-term stays. Properties near the Hondo Municipal Golf Course appeal to golf enthusiasts and weekend visitors seeking recreational activities. The residential neighborhoods around 18th and 19th Streets provide quiet, family-friendly accommodations for visitors attending local events like the annual Hondo Cinco de Mayo Festival or exploring nearby attractions such as the historic courthouse. Additionally, areas close to the Hondo City Park and Community Center are attractive for families visiting for youth sports tournaments and community events, while properties with easy access to FM 462 benefit from proximity to hunting ranches and outdoor recreation areas that draw seasonal visitors throughout deer hunting season.

In Hondo, Texas, Airbnb properties are subject to the state hotel occupancy tax of 6% on gross rental receipts, which is collected by the Texas Comptroller's office and must be remitted monthly if collections exceed $500 or quarterly if less. Additionally, Medina County imposes a 2% county hotel occupancy tax that applies to short-term rentals under 30 days, collected and remitted to the county tax assessor-collector on a monthly basis. The City of Hondo levies a municipal hotel occupancy tax of 7% on short-term rental accommodations, making the total combined rate approximately 15% for most Airbnb stays. Property owners must register with each taxing authority, collect taxes from guests at the time of booking or check-in, and file returns with payment by the 20th of the month following the collection period. Exemptions typically include stays of 30 days or longer, rentals to permanent residents, and accommodations provided to certain government employees on official business, though documentation requirements apply for claiming exemptions.

The total cost to start an Airbnb in Hondo, Texas would be approximately $185,000-$220,000. Property purchase costs around $150,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property would cost $8,000-$12,000 including beds, sofas, dining sets, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic renovations would be $2,000-$3,000. Permits and fees including business license, short-term rental permit, and tax registrations would cost approximately $500-$800. Insurance including landlord and short-term rental coverage would be $1,200-$1,800 annually. Utilities setup and deposits for electricity, water, gas, internet, and cable would cost $800-$1,200. First six months operating costs including utilities ($600/month), cleaning services ($100 per turnover), maintenance reserves ($200/month), property management software ($50/month), and marketing would total approximately $6,000-$8,000. Additional working capital of $3,000-$5,000 should be reserved for unexpected expenses and vacancy periods during the initial launch phase.

Airbnb properties in Hondo, Texas, a small city located between San Antonio and Uvalde, typically generate modest returns with average daily rates ranging from $75-$120 depending on property size and amenities. Properties in this market generally achieve 40-60% occupancy rates annually, with peak demand during hunting season (October-January) and summer months when visitors explore nearby attractions like Medina Lake. A typical 3-bedroom home generating $85 ADR with 50% occupancy would produce approximately $15,500 in annual revenue, while expenses including mortgage, utilities, cleaning, maintenance, insurance, and platform fees typically consume 60-70% of revenue, leaving profit margins of 30-40% or roughly $4,500-$6,200 annually. Success factors include proximity to outdoor recreation areas, competitive pricing below San Antonio rates, professional photography, and catering to hunters and weekend getaway travelers. Properties within 30 minutes of Medina Lake or featuring amenities like fire pits, game cleaning stations, or large outdoor spaces tend to outperform the market average by 15-25%, with some investors reporting annual returns of 8-12% on their initial investment when factoring in property appreciation alongside rental income.

Airbnb investments in Hondo, Texas typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the area's proximity to San Antonio (approximately 40 miles west) and growing tourism from the Medina River recreation area and historic downtown attractions. Properties in Hondo generally achieve profitability within 18-24 months, with average nightly rates of $85-120 for 2-3 bedroom homes and occupancy rates of 60-70% annually. The market benefits from steady demand from San Antonio visitors seeking rural experiences, hunters during deer season (November-January), and business travelers to local agriculture and energy sectors. Investment properties typically require $30,000-50,000 down payment on homes valued at $150,000-250,000, generating monthly gross revenues of $1,200-2,000 after accounting for seasonal fluctuations, with net cash flow of $300-600 monthly after expenses including property management (15-20%), cleaning fees, utilities, and maintenance costs.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Hondo, Texas, offering comprehensive market analysis and property recommendations. Local real estate agents in the Hondo area who focus on investment properties include Century 21 agents specializing in vacation rentals, Keller Williams Realty agents with STR expertise, and RE/MAX professionals who understand the short-term rental market dynamics in Medina County. National services that can assist Hondo investors include AirDNA for market data and analytics, Mashvisor for property analysis and ROI calculations, BiggerPockets for networking and deal sourcing, and Awning for comprehensive Airbnb investment services including property management. Additional local services include Hill Country Real Estate Group which has experience with vacation rental properties in the Texas Hill Country region, and specialized property management companies like Vacasa and RedAwning that can help investors identify properties with strong rental potential while providing ongoing management services for Airbnb operations in the Hondo market.