Investment property in San Marcos Texas

Real Estate Agent with Ross Realty Advisors

Investment property in San Marcos Texas cannot be compared to investment property in most other cities. 

Why is it different (and uniquely beneficial to investors)?

San Marcos is a vibrant college town in the sub market of the Austin - Round Rock MSA.

The 2010 US census estimates that there are currently 44,894 people living in San Marcos.

The total student enrollment at Texas State University - San Marcos for fall semester 2010 was 32,586.

Keep reading for the secret that makes investment property in San Marcos a hidden treasure for investors.

Obviously not all of the students at the University live in San Marcos and some that do, live in dormitories. Having said that, the bulk of the student population (and the population of the entire city) are students renting off-campus housing units. Now when you calculate the tens of thousands of students looking for rentals in this city with only 18,179 housing units in total (per census) you begin to see why citywide occupancy is always over 90% and why rents are currently around $1 - $1.20 per SF, per month.

These facts should be enticing to any investors out there running the numbers, but this is not what makes investment property in San Marcos Texas unique. Nope, it gets even better and even more investor friendly.

The thing that really makes investment property in San Marcos Texas incomparable to other cities (and even other college towns) is the infamous "Single Family Zoning Ordinance" that is strictly enforced by local authorities. This ordinance effectively makes it illegal for 3 or more un-related individuals to occupy the same single family residential house. What does this mean?

This means that 3 college friends cannot rent the typical 3/2 house in a regular subdivision. Nope, that would be a violation. The ordinance imposes daily fines for the owner, the renters and even the property manager, until the occupancy status is reduced to 2 or fewer un-related persons. But how does that effect the real estate investor or investment property in San Marcos Texas?

This SFR zoning ordinance effectively shuts out the student renters from the vast majority of all houses in the city. It forces the students to seek rentals in the significantly smaller pool of multi-family zoned properties locations. These are the duplexes, four-plexes and apartments. I presume the law was originally intended to keep students from renting houses and throwing parties in the quiet neighborhoods of the voting homeowner residents. And in doing so, it has forced the high demand of student renters into the small supply of "MF zoned" properties which has the effect of high rents and high occupancy for the MF zoned units.

Here is a quick example, take your avg 3/2 SFR. 3 students at Texas State San Marcos would pay anywhere from $1500 to $2000 per month to rent this house BUT THEY CAN'T. Instead this SFR would need to be rented to a family (or to 2 students) and would likely rent for up to $1200 per month to these markets. And the 3 unrelated students are forced into choosing between the scarce supply of MF duplexes or to settle for apartment living.

So there it is. The SFR zoning ordinance, coupled with the fast growing student population and the shortage of MF duplexes makes investment property in San Marcos Texas very different and frankly, more valuable than other places or college towns.

If you would like more info on this market and/or a list of all the duplexes and OFF-MARKET investment properties in San Marcos, please Fill out my form!

Comments (2)

Simon Shekerjian


I have a contact actively looking for TX MF Off-Market Properties $8 Mil to $50+ Mil.

Thank you.

Please respond by email to:

Simon Shekerjian                                     

Ph. & Fax: 818-763-5409                         

Cell: 818-482-8808                                  


May 18, 2011 01:57 PM
Laurie Jarrett
Keller Williams Realty Heritage-New Braunfels - New Braunfels, TX
REALTOR - New Braunfels, San Marcos, Texas Real Es

Good post, Scott. I have a nice duplex in Westover for sale. 2/1.5 per side, over 1,000 s.f  per side, two story.  817-819 Allen St. priced at $160,000.  Please check it out and keep it in mind if you have any clients.


May 21, 2011 11:47 AM