Bexar County, TX Cap Rates by Neighborhood

County-Wide Gross Yield: A Starting Point, Not a Conclusion

At a $257,675 median price and $1,379 per month in rent, Bexar County posts a county-wide gross yield of 6.42% and a price-to-rent ratio of 15.6x. That headline number is technically cash-flow-positive territory, but it does nothing to tell you where to buy or what to net after Texas's operating cost stack hits your income statement.

The aggregate is misleading for two reasons. First, gross yields across named submarkets range from 6% to 8%, a 200-basis-point spread that translates directly into the difference between a deal that pencils and one that does not. Second, the gross-to-net compression in Bexar County is one of the steepest of any major Texas market: effective all-in property tax rates of 2.1%–2.3% plus insurance premiums that jumped 15%–25% since 2023 mean your net yield can run 200–250 basis points below gross before you account for vacancy, management, or capex. On a $257,675 asset, that operating cost drag alone runs about $5,400–$5,900 per year in property taxes and a rising insurance line. Work that math before you screen by cap rate.

Submarket Breakdown: Where Yields Actually Land

West San Antonio and Harlandale

West SA and Harlandale sit at the upper end of the county's yield range, with gross rents-to-price running toward 7%–8%. At current median pricing that implies effective gross yields of roughly 7%–8% on assets trading below the county median. These are workforce rental neighborhoods with stable renter demand anchored by the county's three largest employment sectors: federal government and military, healthcare and local government education, and food service.

The tradeoff is that the east and southeast sides have seen prices drop more than 20% as of early 2026. That price compression can look like yield expansion on paper, but investors should underwrite those discounts against higher vacancy risk. County-wide vacancy ended 2024 at 7.2%, and discounted submarkets outside Loop 1604 likely run above that average. A 9%–10% vacancy assumption on an 8% gross yield can quickly erode net cash-on-cash to the point where the discount is fully consumed.

Southtown and Tobin Hill

Southtown and Tobin Hill are the tightest-yield submarket in the county, but carry the most visible appreciation optionality. Gross yields here likely compress toward the 6%–6.5% range given the revitalization premium already priced into Victorian-stock and infill parcels. The VIA Rapid Green Line, breaking ground June 2025 and running along San Pedro Avenue through downtown with service in early 2028, passes directly through the corridor connecting these neighborhoods northward toward the airport and southward toward the historic missions.

The transit premium has not yet been fully priced in. Investors who can acquire station-area parcels now, during the construction phase and active buyer's market conditions (55.6% of sales closing below asking as of 2025), are buying ahead of the service-launch price discovery cycle.

Dignowity Hill

Adjacent to downtown, Dignowity Hill has already cleared the early gentrification stage: empty lots absorbed by developers, Victorian homes appreciating, and food and entertainment density growing. Gross yields here likely fall in the 6%–7% range depending on vintage and condition. The neighborhood's proximity to the Green Line corridor and downtown employment makes it a hybrid cash flow and appreciation play at current entry prices.

Stone Oak and Alamo Ranch (North and Northwest)

North and northwest submarkets are experiencing price growth even as the broader county corrects. Stone Oak and Alamo Ranch are not the yield story. Gross yields in appreciating suburban corridors compress below the county median 6.42%. These submarkets are for owner-occupants or investors underwriting long-duration appreciation rather than near-term net cash flow.

Neighborhood Gross Yield Comparison

Property Tax: The Number That Changes Every Deal

At a 2.1%–2.3% all-in effective rate, Bexar County property taxes are the single largest operating line item on any rental property. On a $257,675 purchase:

• At 2.1%: $5,411 per year, or $451 per month
• At 2.3%: $5,927 per year, or $494 per month

Against $1,379 per month in gross rent, property taxes alone consume 33%–36% of gross rent before insurance, maintenance, vacancy, or management. That is not a flaw to dismiss; it is the structural reason the county-wide net cap rate runs about 4%–4.5% on stabilized assets despite a 6.42% gross yield.

Bexar County has held its rate at $0.299999 per $100 assessed value since 2021, and the City of San Antonio's rate is unchanged from 2024. But the county projects a $145 million general fund deficit by FY 2029, driven partly by the more than $203 million drop in single-family residential market value in 2026 compared to 2025. Investors should not model flat tax rates through a projected hold period. The fiscal math makes future rate increases more likely than not.

The Bexar Appraisal District's biennial appraisal freeze beginning in 2026 means successfully protested 2025 assessed values carry into 2026, so investors closing this year should file protests immediately and preserve that lower assessment for two cycles.

Insurance and Flood Risk Adjustment

Homeowners insurance premiums jumped 15%–25% since 2023, driven by hail and wind exposure. On a policy that was running $1,800 annually, that increase adds $270–$450 per year in operating costs. Modeled over a 10-year hold, even at the lower end, that is a non-trivial drag on cumulative cash flow and net present value.

The flood map update compounds this for specific parcels. FEMA draft maps developed by the San Antonio River Authority show more than 5,639 buildings being added to draft floodplain zones, replacing rainfall data that dated to the 1960s. Properties remapped into Special Flood Hazard Areas face mandatory flood insurance under federally backed financing, adding several hundred to over a thousand dollars annually depending on structure and zone classification. Until final FEMA adoption completes the preliminary release, community appeals, and adoption process, all acquisitions near creek corridors or low-lying areas carry an unquantified but real insurance cost risk. Request current and draft FIRM panel data on every acquisition in these zones.

Cap Rate Compression vs. Decompression

Prices are decompressing, not compressing. The county-wide ZHVI is down 2.13% year-over-year, and Texas A&M data shows average sale prices fell from a 2022 peak of about $345,200 to $338,800 in 2025. Meanwhile, rents declined year-over-year in 2024, held down by the wave of new multifamily supply delivered from the 2022–2023 construction pipeline.

The result is that cap rates are expanding modestly on price declines alone. The more important dynamic, though, is what happens when the supply side reverses. Apartment starts collapsed 80% in 2024 to 1,874 units, the lowest since 2009, versus 9,526 in 2023. When that construction gap flows through absorption, the county's 7.2% vacancy rate should tighten and rent growth should resume. Investors buying at today's lower prices and modestly declining rents are positioned to capture both the rent recovery leg and the eventual return of price appreciation when inventory normalizes, likely beginning in 2026–2027.

Cap Rate Outlook

The near-term setup is the most investor-favorable Bexar County has offered in several years. Buyer's market conditions, 6.0 months of inventory, 17,131 active single-family listings, and 55.6% of sales closing below asking price allow acquisitions at prices where a 6.4%–8% gross yield is achievable in the right submarket. The pipeline collapse in multifamily means the rent pressure of the last two years is structural, not permanent.

Two events could extend the bull case for yields. An H-E-B campus expansion committing 1,232 new jobs by 2038 on the south side adds workforce rental demand near Harlandale. A Toyota assembly plant, if the $142.8 million incentive package lands the deal, would represent a step-change in manufacturing employment across the county.

Two risks deserve explicit budget line items. Property tax rate increases in the 2027–2029 budget cycle are a realistic scenario given the county's projected $145 million deficit. And insurance costs will not retreat; the hail and wind exposure that drove 2023–2024 premium increases is a durable feature of the Texas coastal-adjacent risk environment.

Net of those costs, investors underwriting to a 4%–4.75% stabilized net cap rate on well-located assets in cash-flow submarkets are working with a reasonable base case. Pushing to 5%+ requires either a submarket yield toward the 7%–8% end of the range, below-asking acquisition pricing, or an ADU addition that the 2022 code relaxation and the pending 2024–2025 UDC overhaul now make more achievable on existing single-family lots.

Model your specific deal with our investment property calculator to stress-test tax, insurance, and vacancy assumptions against your actual acquisition price.