Is Muleshoe, Texas Good for Airbnb Investment?

To start an Airbnb in Muleshoe, Texas, begin by researching local regulations through the City of Muleshoe Planning Department and Bailey County offices, as most small Texas towns require business licenses and may have zoning restrictions for short-term rentals. Contact Muleshoe City Hall at 215 S 1st Street to obtain necessary permits, which typically include a business license ($50-100 annually) and potentially a special use permit for residential properties used commercially. Find a suitable property by working with local real estate agents like Nieman Realty or searching online platforms, focusing on homes near downtown Muleshoe or close to attractions like the National Mule Memorial. Furnish the property with essential amenities including Wi-Fi, cable TV, full kitchen appliances, comfortable bedding, and local touches reflecting West Texas culture, budgeting approximately $5,000-15,000 for a complete setup. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting the rural Texas charm and proximity to Lubbock (70 miles northeast), setting competitive rates around $75-125 per night based on local market analysis. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management software like Hostfully or hiring a local property manager, while maintaining compliance with Texas state tax requirements including collecting and remitting hotel occupancy taxes to both the state and potentially Bailey County.

For identifying profitable short-term rental properties in Muleshoe, Texas, focus on location criteria near the Muleshoe National Wildlife Refuge and agricultural business districts, as this small town of approximately 5,000 residents attracts hunters, birdwatchers, and agricultural professionals. Target properties with 2-3 bedrooms, full kitchens, and outdoor spaces that can accommodate hunting groups and business travelers, with pricing analysis showing potential rates of $80-120 per night based on limited local competition. Research existing STRs on Airbnb and VRBO within a 30-mile radius including Clovis, New Mexico, to understand market gaps, and utilize tools like AirDNA, Mashvisor, and local MLS data through Lubbock-area real estate platforms. Consider properties near Highway 84 for accessibility, focus on homes built after 1980 for better condition, and analyze seasonal demand patterns tied to hunting seasons (October-January) and agricultural cycles, while monitoring Bailey County economic development initiatives and tourism promotion efforts through the Muleshoe Chamber of Commerce for market insights.

To obtain an Airbnb/STR permit in Muleshoe, Texas, you must first contact the Muleshoe City Hall at 215 South 1st Street or call (806) 272-4528 to inquire about short-term rental regulations, as the city may require a business license and zoning compliance verification. Required documents typically include a completed business license application, property deed or lease agreement, certificate of occupancy, liability insurance documentation showing minimum $1 million coverage, floor plan of the rental unit, and a signed affidavit of compliance with safety codes. The application fee is estimated at $50-100 for the business license plus potential zoning review fees of $25-75. You must also register with the Texas Comptroller for state tax purposes and obtain a sales tax permit since short-term rentals under 30 days are subject to state hotel occupancy tax. The timeline for approval is typically 2-4 weeks after submitting complete documentation, though initial zoning review may add 1-2 weeks. Muleshoe likely requires compliance with residential zoning restrictions, parking requirements for guests, noise ordinances, and maximum occupancy limits based on square footage and bedroom count, along with annual renewal of permits and maintaining current insurance coverage throughout operation.

Short-term rentals (STRs) are generally legal in Muleshoe, Texas, as the city does not appear to have specific municipal ordinances prohibiting or heavily regulating STR operations as of 2024. Like most small Texas cities, Muleshoe likely follows state regulations and basic zoning requirements, meaning STRs can typically operate in residential areas provided they comply with standard property use guidelines and obtain any necessary business licenses. There are no known prohibited areas specifically for STRs within city limits, though properties must still adhere to general zoning classifications and homeowners association rules where applicable. Recent legal changes have been minimal at the local level, with most Texas STR regulation occurring at the state level through companies like Airbnb and VRBO working with state tax authorities since 2019-2020 for occupancy tax collection. Property owners should verify current business license requirements with the City of Muleshoe and ensure compliance with any applicable HOA restrictions, but the regulatory environment remains relatively permissive compared to larger Texas metropolitan areas that have implemented more restrictive STR ordinances.

The best areas for Airbnb investment in Muleshoe, Texas are primarily concentrated around the downtown historic district near Main Street and American Boulevard, which attracts visitors interested in the town's agricultural heritage and serves business travelers visiting local farming operations and equipment dealers like those along Highway 84. The residential areas near Muleshoe High School and the city park on West Avenue offer family-friendly accommodations for parents visiting students or attending school events, while properties close to the Muleshoe National Wildlife Refuge (approximately 20 miles south) capitalize on eco-tourism and bird watching enthusiasts, particularly during migration seasons. The industrial corridor along Highway 70 and near the railroad tracks provides convenient lodging for agricultural business travelers, equipment sales representatives, and workers involved in the region's significant cattle and farming operations, with companies like Cargill and various grain elevators driving consistent demand throughout the year.

Airbnb properties in Muleshoe, Texas are subject to the state hotel occupancy tax of 6% on gross rental receipts, which applies to all short-term rentals under 30 consecutive days. The Texas Comptroller requires hosts to register for a hotel occupancy tax permit and remit taxes monthly if collections exceed $500 or quarterly if under $500, with payments due by the 20th of the month following the reporting period. Bailey County, where Muleshoe is located, does not impose an additional county hotel occupancy tax as of 2023. The City of Muleshoe has not enacted a local hotel occupancy tax ordinance, so only the state rate applies. Airbnb automatically collects and remits the 6% state tax on behalf of hosts for bookings made through their platform since 2019, but hosts remain responsible for registration and compliance verification. Exemptions include stays of 30 days or longer, rentals to permanent residents, and accommodations provided to certain government employees on official business. Hosts must maintain detailed records of all rental transactions and guest information for at least four years, and failure to comply can result in penalties of up to 50% of the tax owed plus interest.

To start an Airbnb in Muleshoe, Texas, expect total costs around $85,000-$95,000. Property purchase represents the largest expense at approximately $65,000-$75,000 based on median home prices in rural Texas markets like Muleshoe. Furnishing costs typically range $8,000-$12,000 for a complete 2-3 bedroom setup including beds, linens, kitchen essentials, and living room furniture from retailers like IKEA, Wayfair, or local stores. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$3,000. Permits and fees vary but expect $300-$800 for business licenses, short-term rental permits, and city compliance requirements. Insurance costs approximately $1,200-$1,800 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, water, gas, internet, and cable total around $500-$800. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees to Airbnb ($300/month average), and marketing expenses ($100/month) total approximately $4,500-$5,100, bringing the complete startup investment to roughly $85,000-$95,000 for a turnkey Airbnb operation in Muleshoe, Texas.

Airbnb properties in Muleshoe, Texas face significant profitability challenges due to the town's small population of approximately 5,000 residents and limited tourism infrastructure, with average daily rates typically ranging from $45-75 compared to major Texas markets. Properties in Muleshoe generally generate annual revenues between $8,000-15,000, while expenses including mortgage payments, utilities, cleaning fees, insurance, and maintenance often total $12,000-18,000 annually, resulting in negative profit margins of -15% to -25% for most operators. Success factors in this market are extremely limited, with properties near the Muleshoe National Wildlife Refuge or those catering to agricultural workers and hunters during specific seasons showing marginally better performance. A typical 3-bedroom home purchased for $80,000 with a $600 monthly mortgage might achieve 25% occupancy at $60/night, generating $5,475 annually while facing $8,400 in mortgage payments alone, before additional operating expenses. The market lacks the business travel, events, or tourist attractions necessary for sustainable short-term rental profitability, with most successful property investors in Bailey County focusing on traditional long-term rentals or agricultural real estate investments rather than Airbnb operations.

Based on Muleshoe, Texas market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property acquisition costs and occupancy rates. Properties in Muleshoe generally reach profitability within 18-24 months, with average nightly rates of $75-$95 and occupancy rates around 45-55% annually due to agricultural business travel, hunting seasons, and regional tourism. Initial investment costs are relatively low at $80,000-$120,000 for suitable properties, with monthly operating expenses including utilities, cleaning, and maintenance averaging $400-$600. The market benefits from limited hotel options and steady demand from wind energy workers, cattle ranchers, and visitors to nearby attractions, though seasonal fluctuations occur with peak periods during hunting season (October-January) and agricultural busy seasons generating higher returns of 15-18% during those months.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Muleshoe, Texas. Local real estate agents like Muleshoe Realty and High Plains Real Estate Group have experience with investment properties in the area, while regional firms such as Amarillo-based Century 21 Big Country and Coldwell Banker First Equity Realtors serve the broader Texas Panhandle market including Muleshoe. National services like Mashvisor, AirDNA, and BiggerPockets offer market analysis tools and investment guidance for short-term rental properties. Property management companies such as RedAwning, AvantStay, and local vacation rental managers like West Texas Property Solutions can help optimize rental performance. Investment-focused real estate platforms including Roofstock, Fundrise, and HomeUnion occasionally feature properties in smaller Texas markets, while consulting services like STR Wealth and Airbnb Automated provide specialized guidance for short-term rental investments in emerging markets like Muleshoe.