San Antonio is Texas's most cash-flow-friendly major metro — meaningful population (1,547,253) and 1.4%/yr growth, but at a $275,000 median price that's materially below Austin or DFW. The 3.13% cap rate and 0.51% rent-to-price ratio reflect that price advantage. Where Austin became an appreciation market and Dallas became a corporate-relo growth market, San Antonio stayed closer to its working-class structural roots and the math that produces.
Military and medical are the dominant employment anchors. Joint Base San Antonio (the largest joint base in DoD by population) anchors stable tenant demand on the east, south, and northeast sides. The South Texas Medical Center, USAA's headquarters, and the Methodist / Baptist hospital systems anchor white-collar professional employment. Submarkets stratify: Stone Oak, Alamo Heights, Terrell Hills, and the 1604 north loop draw premium family rentals around top-ranked NEISD and Alamo Heights ISD schools. The North Central / Castle Hills area offers walkable urban rentals. The South Side, West Side, and parts of the East Side offer deeper value with school-district trade-offs.
Texas property tax at 1.72% is the structural challenge — no state income tax, but Bexar County's sale-triggered reassessment can push your actual bill 20–40% above what the seller paid. Verify the new assessed value before underwriting. Insurance is more affordable than DFW or Houston (less hail risk, no hurricane exposure), water restrictions during summer drought affect lawn-care responsibilities under leases, and the military tenant base brings stability but also Service Members Civil Relief Act considerations on lease termination. San Antonio is the Texas market where the 1% rule still has a meaningful chance of passing at the median, which is the simple test for whether the math actually works.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
San Antonio's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $275,000, the $1,390/mo rent produces only $718/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($55K at 7%) would result in approximately $-745/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
Property taxes consume 28% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes San Antonio a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
All figures below are computed from San Antonio's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 1.72% effective rate on the $275,000 median price, the annual tax bill is $4,730 — that's very high (top 15% of US markets) (+62% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If San Antonio continues appreciating at 2.5%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $275K | $1,390 | 3.1% |
| Year 1 | $282K | $1,432 | 3.1% |
| Year 2 | $289K | $1,475 | 3.2% |
| Year 3 | $296K | $1,519 | 3.2% |
| Year 4 | $304K | $1,564 | 3.2% |
| Year 5 | $311K | $1,611 | 3.2% |
Same median-priced San Antonio property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $275K | $718 | $8,616 | 3.1% |
| 20% down conventional @ 7% | $63K | $-745 | $-8,940 | -14.1% |
| 25% down DSCR @ 8.5% | $80K | $-868 | $-10,417 | -13.1% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $206K | $1,182 | $6,578 | 3.2% | $548 |
| At median | $275K | $1,390 | $7,047 | 2.6% | $587 |
| Above median (~125% price) | $344K | $1,598 | $7,516 | 2.2% | $626 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at San Antonio's historical appreciation rate of 2.5%:
On a $55K down payment, that's a 14.4% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to San Antonio, not generic boilerplate:
Pre-filled with San Antonio medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in San Antonio.
San Antonio, TX has a population of 1,547,253 and has been growing at 1.4% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $275,000 paired with median rents of $1,390/mo produces an estimated cap rate of 3.13%.
Property taxes at 1.72% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 6.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.0x, homes cost about 5.0 times the local median income of $55,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, San Antonio is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.