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, a short-term rental permit (approximately $100-200 annually), and ensure compliance with fire safety codes and occupancy limits. Find a suitable property by purchasing or leasing in permitted zones, focusing on areas near the Guadalupe River, downtown, or near popular attractions like Kerrville-Schreiner Park. Furnish the property with quality furniture, linens, kitchen essentials, and amenities like WiFi, smart TV, and outdoor seating to appeal to tourists visiting for river activities and Hill Country attractions. List your property on Airbnb and VRBO platforms with professional photos highlighting local attractions, competitive pricing around $80-150 per night depending on size and location, and detailed descriptions mentioning proximity to river access and downtown. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating check-ins/check-outs, maintaining the property regularly, collecting and remitting the required 15% hotel occupancy tax to the city and state, and building relationships with local cleaning services and maintenance contractors to ensure smooth operations year-round.

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's 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. Conduct pricing analysis using AirDNA and Mashvisor to identify properties generating $150-300 per night during peak seasons (spring/summer) with occupancy rates above 65%, while ensuring purchase prices allow for positive cash flow after expenses typically running 40-50% of gross revenue. Research competition by analyzing similar properties within a 5-mile radius on Airbnb and VRBO, noting their pricing strategies, amenities, and guest reviews to identify market gaps. Utilize local resources including the Kerrville Convention and Visitors Bureau for tourism data, Kerr County Appraisal District for property values, local STR management companies like Hill Country Retreats for market insights, and connect with Kerrville real estate agents specializing in investment properties who understand the city's STR regulations and seasonal demand patterns driven by events like the Kerrville Folk Festival and summer river tourism.

To obtain an Airbnb/STR permit in Kerrville, Texas, you must first contact the Kerrville Planning and Development Department at City Hall located at 701 Main Street to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances. Submit an application for a Certificate of Occupancy or business license through the city's permitting office, providing required documents including proof of property ownership or lease agreement, floor plans, fire safety inspection certificate, liability insurance documentation (minimum $1 million coverage), contact information for a local property manager if you're not local, and parking plan showing adequate off-street parking spaces. Pay the associated fees which typically range from $150-300 for the initial permit plus annual renewal fees of approximately $100-200. The approval process generally takes 2-4 weeks depending on inspection scheduling and document review. Kerrville-specific requirements include maintaining the property's residential character, ensuring compliance with noise ordinances, providing trash collection arrangements, displaying the permit number in all advertising, and adhering to occupancy limits based on bedroom count and septic system capacity if applicable. You must also register with the Texas Comptroller for state tax collection purposes and may need additional inspections from the fire marshal and health department depending on the property size and guest capacity.

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 Short-Term Rental 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. Operators must also provide contact information for a responsible party available 24/7 to address any issues. Recent changes around 2021-2022 included stricter enforcement of existing regulations and enhanced permit requirements following complaints from residents about noise and parking issues. Properties must meet safety standards including smoke detectors and fire extinguishers, and the city conducts periodic inspections to ensure compliance with health and safety codes.

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 companies like Peterson Health and Schreiner University. The Guadalupe River corridor neighborhoods are highly desirable due to proximity to river activities, tubing, and the annual Kerrville Folk Festival held at Quiet Valley Ranch since 1972. The Hill Country State Natural Area vicinity draws outdoor enthusiasts year-round for hiking, camping, and nature photography. Areas near Kerrville-Schreiner Park offer consistent demand from families visiting the swimming beach and RV travelers. The Louise Hays Park neighborhood benefits from its central location and proximity to the Kerrville Convention and Visitors Bureau events. Properties near the Museum of Western Art capture visitors interested in cowboy culture and western heritage tourism. The Riverside Nature Center area appeals to eco-tourists and bird watchers, while neighborhoods close to the Arcadia Theater district benefit from cultural tourism and local entertainment events throughout the year.

In Kerrville, Texas, Airbnb hosts 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 appropriate authorities - state taxes go to the Texas Comptroller's office by the 20th of the following month, while local taxes are remitted to the City of Kerrville by the same deadline. Hosts must register for tax permits with both the state and city before beginning operations. Airbnb may collect and remit these taxes automatically for hosts in some cases, but hosts remain ultimately responsible for compliance. Exemptions typically include stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and rentals to certain government employees or tax-exempt organizations with proper documentation.

The total cost to start an Airbnb in Kerrville, Texas would be approximately $285,000-$320,000. Property purchase costs around $220,000-$250,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property would cost $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and decor. Initial setup costs including professional photography, listing creation, and basic renovations would be $3,000-$5,000. Permits and fees including business license, occupancy permits, and city registration would total $500-$1,500. Insurance including short-term rental coverage would cost $2,000-$3,000 annually. Utilities setup and deposits would be $500-$800. First six months operating costs including utilities ($600/month), cleaning supplies ($200/month), maintenance reserves ($300/month), property management software ($50/month), and marketing would total approximately $7,000-$9,000. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add another $5,000-$10,000 to initial startup costs.

Airbnb properties in Kerrville, Texas demonstrate moderate profitability with average nightly 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 ($40-60 per turnover), property management (15-25% of revenue), 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 achieve higher profit margins of 25-35% compared to suburban locations at 15-25%, with lakefront cabins commanding premium rates of $180-250 nightly during peak summer months. Success factors include proximity to popular attractions like Kerrville-Schreiner Park, professional photography showcasing Hill Country views, responsive guest communication, and strategic pricing during events like the Kerrville Folk Festival which can triple nightly rates. A case study of a renovated 1920s cottage near downtown reported $28,000 annual revenue with $16,800 in expenses, yielding a 40% profit margin, while a standard suburban property generated $19,000 revenue with $13,300 expenses for a 30% margin, demonstrating that location and property character significantly impact profitability in this market.

Based on Kerrville, Texas market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%. Properties near the Guadalupe River and downtown area command premium rates of $120-180 per night with 65-75% occupancy rates during peak seasons. Initial investment recovery generally occurs within 6-8 years, with monthly gross revenues averaging $2,500-4,200 for well-positioned 2-3 bedroom properties. The Hill Country tourism market, supported by companies like River Point Resort and Kerrville Convention & Visitors Bureau data from 2023, shows consistent demand growth of 6-8% annually. Cash-on-cash returns improve to 15-20% after the third year as mortgage principal reduction accelerates and local market appreciation averages 4-6% annually, making break-even typically achievable within 18-24 months of operation with proper property management and marketing strategies.

STRSearch leads the national market for Airbnb investment property analysis and market research tools for investors seeking profitable short-term rental properties in Kerrville, Texas. Local real estate agents specializing in investment properties include Hill Country Premier Properties, Kerrville Realty Group, and Century 21 The Hills Realty who understand the vacation rental market dynamics in the Texas Hill Country region. National services like Awning (formerly RedAwning) provide end-to-end Airbnb investment services including property acquisition, Mashvisor offers market analysis tools, and BiggerPockets connects investors with local professionals. Regional companies such as Texas Hill Country Vacation Rentals and Frio River Vacation Rentals have expertise in the area's tourism patterns and rental potential. Additional local agents include Coldwell Banker D'Ann Harper Realtors and Keller Williams Realty who work with investors, while national platforms like Roofstock and Arrived Homes occasionally feature Texas Hill Country properties. Property management companies like Vacasa and RedAwning also provide market insights to help investors identify profitable opportunities in Kerrville's growing vacation rental market, particularly near the Guadalupe River and downtown historic district.