Is Kerrville, Texas Good for Airbnb Investment?

To start an Airbnb in Kerrville, Texas, begin by researching local regulations through the Kerrville City Hall and Kerr County offices, as the city requires short-term rental permits and compliance with zoning ordinances that typically restrict rentals to certain residential areas. Obtain necessary permits including a business license from the City of Kerrville (approximately $50-100), a short-term rental permit (around $200-300 annually), and ensure compliance with fire safety codes and occupancy limits. Find a suitable property by searching areas near the Guadalupe River, downtown historic district, or neighborhoods zoned for commercial/mixed-use, considering properties with 2-4 bedrooms that appeal to families and groups visiting for river activities, hunting, or festivals. Furnish the property with durable, comfortable furniture focusing on outdoor amenities like patio furniture, kayak storage, and Hill Country-themed decor, budgeting $15,000-25,000 for a complete setup. List your property on Airbnb, VRBO, and local tourism websites, highlighting proximity to river access, Kerrville Folk Festival grounds, and outdoor activities, with competitive pricing around $120-200 per night depending on size and amenities. Manage the property by establishing relationships with local cleaning services (typically $80-120 per turnover), maintenance contractors familiar with Hill Country properties, and consider using property management companies like Vacasa or local firms that charge 20-30% commission, while maintaining responsive communication with guests and monitoring reviews to ensure consistent bookings in Kerrville's seasonal tourism market.

To identify profitable short-term rental properties in Kerrville, Texas, focus on locations within 2-3 miles of the Guadalupe River, Kerrville-Schreiner Park, and downtown historic district, as these areas attract tourists year-round for river activities, festivals, and Hill Country charm. Target properties with 2-4 bedrooms, outdoor spaces like decks or patios, river access or views, and amenities such as hot tubs, fire pits, or game rooms that appeal to families and groups visiting for weekend getaways. Analyze pricing by researching comparable Airbnb and VRBO listings in the $150-300 per night range, considering seasonal fluctuations during peak times like Kerrville Folk Festival in May-June and summer river season. Study competition using AirDNA and Mashvisor to assess occupancy rates (typically 60-75% for successful properties), average daily rates, and market saturation in specific neighborhoods. Utilize local resources including the Kerrville Convention and Visitors Bureau for tourism data, Kerr County Appraisal District for property values, local real estate agents familiar with STR regulations, and Facebook groups like "Kerrville Real Estate" for market insights, while ensuring compliance with city short-term rental ordinances and HOA restrictions that may limit rental activities.

To obtain an Airbnb/STR permit in Kerrville, Texas, start by contacting the Kerrville Planning and Development Department at City Hall located at 701 Main Street or call (830) 257-8000, as the city requires short-term rental registration under their zoning ordinance. Submit a completed STR application form along with required documents including proof of property ownership or lease agreement, a site plan showing parking areas, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), contact information for a local responsible party available 24/7, and a signed affidavit acknowledging compliance with city regulations. Pay the application fee of approximately $150-200 plus an annual renewal fee of around $100-150. The approval process typically takes 2-4 weeks after submission of complete documentation. Kerrville-specific requirements include maintaining adequate off-street parking (minimum 2 spaces), ensuring the property meets all fire safety codes, limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining quiet hours from 10 PM to 7 AM, posting the permit number and emergency contact information prominently on the property, and ensuring compliance with HOA restrictions if applicable. The permit must be renewed annually, and the city conducts periodic inspections to ensure ongoing compliance with safety and zoning requirements.

Short-term rentals (STRs) are legal in Kerrville, Texas, but operate under specific regulations established by the city. Kerrville requires STR operators to obtain a permit and comply with occupancy limits, parking requirements, and noise ordinances. The city prohibits STRs in certain residential zoning districts and requires properties to maintain adequate off-street parking for guests. Recent changes around 2022-2023 included stricter enforcement of existing regulations and enhanced permit requirements, with the city implementing a registration system to better track and monitor STR operations. Properties must also comply with fire safety codes and cannot exceed maximum occupancy limits based on bedroom count, while operators are required to provide 24-hour contact information for noise or disturbance complaints from neighbors.

The best areas for Airbnb investment in Kerrville, Texas include the Historic Downtown District, which attracts tourists visiting the Schreiner Mansion and attending events at the Cailloux Theater, plus business travelers to local banks and medical facilities. The Guadalupe River corridor neighborhoods are highly desirable due to proximity to tubing, kayaking, and the annual Kerrville Folk Festival which draws thousands of visitors each May. The Hill Country State Natural Area vicinity offers excellent potential for nature enthusiasts and hunters, particularly during deer season from October through January. Areas near Kerrville-Schreiner Park provide steady demand from families and RV travelers seeking cabin alternatives, while neighborhoods close to the Museum of Western Art capture visitors during special exhibitions and the annual Western Weekend. The medical district area around Peterson Regional Medical Center generates consistent business travel demand from healthcare professionals and patients' families. Properties within walking distance of the Kerrville Convention Center benefit from corporate events and conferences throughout the year, and the emerging arts district near the Hill Country Arts Foundation attracts cultural tourists and workshop participants.

In Kerrville, Texas, Airbnb operators are subject to both state and local lodging taxes. The Texas state hotel occupancy tax is 6% and applies to all short-term rentals under 30 days. Kerrville imposes a local hotel occupancy tax of 7%, bringing the total occupancy tax rate to 13% on gross rental receipts. These taxes are collected from guests at the time of booking and must be remitted monthly to the Texas Comptroller's office for state taxes and to the City of Kerrville for local taxes by the 20th of the following month. Operators must register with both entities and file returns even if no tax is owed. The city requires a certificate of occupancy tax registration, and failure to collect or remit can result in penalties and interest. Rentals of 30 days or longer are generally exempt from occupancy taxes, and some properties may qualify for exemptions if they meet specific criteria such as being used for certain medical treatments or extended stays for disaster relief, though documentation is required to claim such exemptions.

The total cost to start an Airbnb in Kerrville, Texas would be approximately $285,000-$320,000. Property purchase costs around $220,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property would require $15,000-$25,000 for quality furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic marketing materials would be $1,500-$2,500. Permits and fees in Kerrville typically include short-term rental permits, business licenses, and potential HOA approvals totaling $500-$1,200. Insurance for short-term rentals runs $2,000-$3,000 annually, with the first year paid upfront. Utility deposits and connections for electricity, water, gas, internet, and cable would cost $800-$1,500. First six months of operating costs including utilities ($200/month), cleaning services ($100 per turnover, estimated 8 turnovers), maintenance and supplies ($150/month), property management software ($50/month), and marketing ($100/month) would total approximately $4,200-$5,500. Additional considerations include potential property improvements or repairs ($5,000-$10,000) and working capital for the initial months before achieving consistent bookings.

Airbnb properties in Kerrville, Texas demonstrate moderate profitability with average daily rates ranging from $85-150 depending on property size and amenities, generating annual revenues of $15,000-35,000 for typical 2-3 bedroom homes with 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($50-75 per turnover), property management (15-25%), utilities ($150-250 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near the Guadalupe River or downtown historic district command premium rates of $120-200 nightly, achieving profit margins of 25-35% after expenses, while suburban properties average 15-25% margins. Success factors include proximity to popular attractions like Kerrville-Schreiner Park, the Museum of Western Art, and summer music festivals, with lakefront or river-access properties showing the strongest performance during peak seasons from March through October. Properties that invest in quality furnishings, professional photography, and responsive guest communication typically achieve 15-20% higher occupancy rates and can maintain premium pricing, with some well-positioned vacation rentals near recreational areas reporting net profits of $8,000-18,000 annually on properties valued between $200,000-400,000.

Airbnb investments in Kerrville, Texas typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, driven by the city's proximity to the Guadalupe River and strong tourism from San Antonio metro area visitors seeking Hill Country retreats. Properties near the river or downtown historic district command premium nightly rates of $120-180, with occupancy rates averaging 65-75% annually, while initial investments of $200,000-350,000 for suitable properties can achieve profitability within 18-24 months after accounting for renovation costs, furnishing, and marketing expenses. The market benefits from consistent demand during peak seasons (March-October) when river activities and festivals drive higher occupancy, with many investors seeing break-even on cash invested by month 20-28, though properties requiring significant renovations may extend profitability timelines to 30-36 months depending on initial condition and local permit requirements.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Kerrville, Texas. Local real estate agents like Hill Country Premier Properties and Kerrville Realty have experience with investment properties in the area, while Century 21 and Keller Williams offices in Kerrville often work with Airbnb investors. National services include AirDNA for market analysis, Mashvisor for property analytics, and BiggerPockets for investor networking and deal sourcing. Local property management companies like Hill Country Vacation Rentals and Texas Hill Country Properties can assist with both acquisition and management of short-term rentals. RedAwning and Vacasa also provide market insights and property management services for investors in the Kerrville market. Additionally, local mortgage brokers familiar with investment properties and vacation rental financing, such as First National Bank of Kerrville, can facilitate purchases for out-of-state investors looking to capitalize on Kerrville's tourism market near the Guadalupe River.