How Much Money Can You Charge For an Airbnb in Galveston?

With its combination of gorgeous beaches, down-home charm, and pleasant coastal weather, Galveston, TX has long been an inviting locale for visitors. If you're in the Airbnb business, you may be eyeing this beachfront city as an ideal site for your next rental property purchase.

Before you get ahead of yourself, let's discuss how much you can expect to make running an Airbnb listing out of Oleander City!

Investing in the Galveston Airbnb Market

With over 3,500 Airbnb listings and more than 7 million visitors annually, Galveston is a busy city with a thriving short-term rental market. All of that makes it attractive for an entrepreneur looking to get into the Airbnb game in this coastal city.

Several key factors make Galveston a great location to invest in, including its positive real estate market projections, its bustling tourism sector, and its array of enticing locations. We're going to discuss each of these features at length so you can have a better idea of the Airbnb market in Galveston. 

Real Estate Market Projections

While Texas isn't currently in a buyer's market, its above-average housing inventory combined with slowly falling house prices suggest that things may be changing in favor of buyers seeking to acquire some valuable Texas property.

Galveston County in particular has seen a more balanced real estate market, meaning that home sales haven't been tilted in favor of either the buyer or the seller.

However, Galveston home prices tend to be a bit cheaper than the national average, meaning that you could pick up a Galveston beach house for a moderate price and hope to see some appreciation on that property down the road.

Fast-Growing Tourist Sector

As we've already said, Galveston enjoys a lot of tourism, with 7+ million visitors stopping through this coastal city every year. In hotspots like Galveston Island, tourism-related occupations make up one out of every three jobs, with the city as a whole enjoying nearly $230 million in tax revenues thanks to tourism.

In other words, Galveston has a robust tourist sector that's perfect for anyone looking to make a profit through short-term or vacation rental property ownership. If you can find the right property in the right part of town (close to recreational opportunities and attractions), you can snag a place that's perfect for tourists of various stripes.

Solid Locations and Neighborhoods

As a city, Galveston is perfectly situated about an hour away from Houston and a day trip's journey away from Corpus Christi and Austin. Finding a location in Galveston means being near these major cities while also enjoying local attractions.

However, some particular neighborhoods in Galveston have a greater profit potential than others, especially when it comes to short-term rental situations. For instance, an average Airbnb listing in Pirates Beach has a 46% occupancy rate and a typical nightly rate of $247, leading to a projected annual revenue of $41,724.

An average Airbnb listing in the East End Historic District, meanwhile, enjoys a comparable occupancy rate of 46% but a lower nightly rate of $156. In this part of town, the projected annual revenue comes out to a still-respectable $26,264. This difference makes sense given the fiercer competition between the East End's 200+ active listings compared to Pirates Beach's total number of listings (under 100 as of this writing).

Lasker Park is another great opportunity, with an average of 130+ listings and a 42% occupancy rate at a nightly rate of $144, leading to a projected revenue of $22,059 in one year's time. These are just a few of the primo opportunities you can find when investing in the short-term rental property market in Galveston.

Things to Keep in Mind When Investing in Galveston Airbnb

One of the most important parts of any short-term rental business, including any enterprise located in Galveston, is familiarity with local and state laws. For that reason, you need to understand the state laws that Texas has put in place to determine the rules and regulations for short-term rental businesses.

You should also know about both the local and state taxes that will affect your STR business, as well as a couple of other city ordinances to keep in mind when running your Airbnb business.

You should also familiarize yourself with Texas law in general regarding short-term rental rules and regulations, as well as specific rules and policies that apply just in Galveston County (more on that below!).

Galveston STR Laws and Regulations

Compared to many urban areas, Galveston is relatively open and unrestricted when it comes to starting up your own Airbnb business. That’s because the State of Texas prohibits any local (i.e. county or municipal) governments from passing any laws or ordinances that would outlaw short-term rentals, which makes Texas quite an Airbnb-friendly place.

Texas state law defines a “short-term rental” as a booking that lasts no more than 30 days. The City of Galveston enforces this standardized, state-defined rental period limit.

The biggest obligation Texas levies against Airbnb owners is its requirement to register with the state comptroller and pay the state's hotel occupancy tax, as well as any county or other local hotel occupancy taxes.

In Galveston, the current Hotel Occupancy Tax for short-term rentals is 9% of your total gross, which needs to be paid to the city either monthly (if taxes owed would exceed $500 per month) or quarterly (if taxes owed would be less than $500 per month). A $25 fine may be levied whenever you fail to submit your STR taxes and income by the deadline.

If you decide to advertise your property, city ordinances also require you to attach your state registration number (obtained when you license with the state comptroller's office) to any listing or promotion.

Property Taxes and Other Costs

Apart from paying the relevant state and county hotel occupancy taxes, you'll also need to pay a one-time $50 fee when you register for your license to operate a short-term rental business within the State of Texas.

Obviously, you'll also be responsible for any property taxes that apply to your vacation rental home. While Texas tends to have higher property taxes in general, Galveston in particular currently has an average property tax rate of 1.65%, which is a few points above the national average property tax rate of 1.10%.

While this tax rate certainly isn't an unbearable amount, it is still worth considering when deciding to invest in the Galveston vacation rental market.

The Bottom Line: How Much Can You Charge in Galveston?

Ultimately, the Galveston Airbnb management market shows a lot of promise for short-term rental property entrepreneurs. Different Airbnb analytics tools have found that the average Texas Airbnb can charge a daily rate of $175 with an occupancy rate of 40%, putting projected monthly income at about $2,750.

In Galveston, meanwhile, you can expect an occupancy rate closer to 46% while commanding a nightly rate of around $182 (with the potential for a higher day rate in a more desirable part of town, of course). This would put your projected monthly income at around $2,860.

Depending on the location and features of your Galveston property, you can typically charge a daily rate between the high $100s or low $210s.

Contact Us Today

Looking to invest in a Galveston beachfront property? Contact the Airbnb experts at Vello to find out how we can make your dreams of developing your vacation rental business a reality!

If you have any questions feel free to ask

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