Everyone's selling the dream. Instagram reels of a cute casita with string lights in Fredericksburg. A buddy who "cleared six figures on his Canyon Lake Airbnb last year." A podcast guest who quit their job to run STRs in Wimberley.
What nobody's publishing? The actual math.
And that math can look... brutal.
I'm a licensed Texas real estate agent who lives on acreage in Hill Country. I help people buy investment properties here — and I also tell them when the numbers don't work. This article is the version of STR analysis I wish existed when I started digging into these markets. Real data. Real expenses. Real net cash flow.
No affiliate links. No "sign up for my course." Just the numbers.
The five markets (and why these five)
I picked Fredericksburg, Canyon Lake, Wimberley, Dripping Springs, and Bandera because they represent the full spectrum of Hill Country STR investing. Fredericksburg is the most mature and saturated. Canyon Lake is the lake play. Wimberley is the artsy boutique market. Dripping Springs is the Austin-adjacent growth bet. Bandera is the affordable wildcard.
Each one attracts a different guest, carries a different price tag, and — crucially — produces very different returns when you actually subtract expenses.
The gross revenue picture
Let's start with what the platforms report. I cross-referenced multiple STR analytics platforms to get ranges rather than a single number — because no one source tells the full story. Where sources disagreed, I noted the spread.
Fredericksburg
Active listings: ~1,450–1,900+ (Airbtics reports 1,219 active Airbnb listings; GetChalet counts 1,928 total vacation rentals including Vrbo — the gap is platform overlap and methodology)
Median occupancy: 47–49% (Airbtics: 48%; GetChalet: 49%)
Average daily rate (ADR): $227–$251 (Airbtics: $227; GetChalet: $251; AirDNA MarketMinder reports a higher $347 ADR but that includes luxury and large-capacity listings that skew the average)
Median annual gross revenue: $41,000–$48,000 (Airbtics: $41K; GetChalet: $47.8K)
Typical home value: ~$513,000 (Zillow Home Value Index, January 2026 via GetChalet)
Canyon Lake
Active listings: ~500–1,100+ (Rabbu: 506; Airbtics: 1,148 — the wider count includes surrounding unincorporated areas)
Median occupancy: 36–40% (AirDNA: 36%; Airbtics: 40%)
Average daily rate (ADR): $207–$318 (Airbtics: $207; AirDNA: $318; AirROI reports median at $247 with top 10% properties hitting $570+/night)
Median annual gross revenue: $32,000–$56,000 (Airbtics: $32K; Rabbu: $55.9K — this is the widest variance of any Hill Country market, driven by the enormous quality gap between lakefront and off-water properties)
Wimberley
Active listings: ~200–586 (Airbtics: 204 Airbnb listings as of late 2024; AirROI: 586 total across platforms in 2025)
Median occupancy: 34–47% (AirROI: 34% median, with top-quartile performers hitting 52%+; Airbtics: 47% — the spread likely reflects different time periods and platform mix)
Average daily rate (ADR): $197–$283 (Airbtics: $197; AirROI: $283)
Median annual gross revenue: $33,000–$37,000 (Airbtics: $33K; AirROI: $36.9K; AirDNA: $36.6K)
Dripping Springs
Active listings: ~638 (AirDNA MarketMinder)
Median occupancy: ~38% (AirDNA)
Average daily rate (ADR): ~$441 (AirDNA — this number is heavily skewed by event venues and luxury estate properties; the typical 2-3 bedroom cabin or casita performs well below this figure)
Median annual gross revenue: ~$35,000 (AirDNA)
Note: Unlike most Hill Country markets, Dripping Springs does not have platforms auto-remitting local HOT tax on your behalf — you're responsible for collecting and remitting the city's portion directly.
Bandera
Active listings: ~375 (AirDNA MarketMinder)
Median occupancy: ~35% (AirDNA)
Average daily rate (ADR): ~$184 (AirDNA)
Median annual gross revenue: ~$14,500 (AirDNA — this is the lowest of the five markets, but the buy-in is dramatically lower too)
What jumps out
A few things jump out immediately. Fredericksburg has the highest volume of listings and the most consistent revenue — but it's also the most expensive market to buy into. Bandera looks rough on paper, but the buy-in is dramatically lower. Dripping Springs has a deceptively high ADR that's inflated by a handful of luxury event properties — the typical cabin or casita does not command $441 per night.
Why the ranges matter: You'll notice I'm not handing you a clean, single number for any market. That's intentional. Every analytics platform uses different methodology — different listing counts, different time windows, different definitions of "active." When Airbtics says Canyon Lake grosses $32K and Rabbu says $56K, neither is lying — they're measuring different slices of the market. The ranges give you a more honest picture than any single source can.
Now subtract reality
Here's where most "STR income" articles stop. They show gross revenue and let you fill in the dream. Let's not do that.
I'm going to model a realistic scenario: a $450,000 purchase price (a common entry point for a 2-3 bedroom STR-suitable property in most of these markets, though tight in Fredericksburg and Dripping Springs). Conventional investment loan at 7.25%, 25% down ($112,500), 30-year fixed.
Your fixed monthly costs
Mortgage payment (P&I on $337,500 at 7.25%): ~$2,302/month = $27,624/year
Property tax (estimated at 1.8% — varies significantly by county and special district): $8,100/year
Insurance (Hill Country = wildfire zone in many areas): $3,000–$5,000/year — let's use $4,000
That's $39,724/year before you've hosted a single guest.
Your variable costs (as a percentage of gross revenue)
For this model, I'll use $42,000 in gross revenue — roughly the median for Fredericksburg, Canyon Lake, and Wimberley. I'll adjust for Bandera and Dripping Springs separately.
Property management (if you're not self-managing): 20–25% of gross = $8,400–$10,500 (local Hill Country property managers typically charge 20–25% with cleaning coordination; some charge 15% plus separate cleaning fees)
Cleaning fees (often covered by guest fees, but not always fully): $3,000–$5,000/year net cost to you
Maintenance and repairs (things break, guests break things): $3,000–$4,000/year
Supplies, linens, restocking: $1,500–$2,500/year
Hotel Occupancy Tax (HOT): 13% total (6% state + 7% local) — platforms like Airbnb now auto-collect and remit this in most Hill Country jurisdictions per the April 2025 Austin City Council changes and similar moves by other cities. However, this tax still affects your competitive pricing even when it's passed to the guest.
Platform fees (Airbnb host-only fee): ~3% = $1,260
WiFi/utilities (electric, propane, water, Starlink): $4,000–$6,000/year
Furnishing amortization (you spent $15K–$25K furnishing; spread over 5 years): $3,000–$5,000/year
Let's total the variable costs at the midpoint: roughly $28,000–$34,000/year if you're using a property manager, or $20,000–$25,000/year if self-managing.
The real net cash flow
Here's the number that matters — what actually hits your bank account after everything:
Scenario A: Managed STR at $42K gross
Gross revenue: $42,000
Fixed costs (mortgage, tax, insurance): -$39,724
Variable costs (managed): -$31,000
Net cash flow: -$28,724
You read that right. At median performance with a property manager, this deal is cash flow negative by nearly $29,000 per year on a $450K property.
Scenario B: Self-managed STR at $42K gross
Gross revenue: $42,000
Fixed costs: -$39,724
Variable costs (self-managed): -$22,500
Net cash flow: -$20,224
Still negative. By a lot.
Scenario C: Top-quartile performer at $65K gross, self-managed
Gross revenue: $65,000
Fixed costs: -$39,724
Variable costs (self-managed, scaled up): -$28,000
Net cash flow: -$2,724
Even a top-quartile property — the kind that's beautifully designed, perfectly located, and expertly optimized — barely breaks even on a $450K purchase at current mortgage rates. (For context, AirROI reports that top-25% Canyon Lake properties earn nightly rates of $367+, and top-10% performers hit $570+/night — but those are the exception, not the median.)
So why is anyone doing this?
Before you close this tab, here's the nuance that changes the math:
1. Appreciation
Hill Country property values have appreciated meaningfully over the past decade. Zillow's Home Value Index shows Fredericksburg home values at ~$513K as of January 2026, up 0.74% year-over-year — modest, but compounding. Other Hill Country markets have seen stronger long-term appreciation, especially during the Austin spillover years of 2020–2023. If your $450K property appreciates 3–5% annually, that's $13,500–$22,500 in equity growth per year. You're essentially paying $20K per year to build $15K–$22K in equity. Whether that's a good trade depends on your time horizon.
2. Tax benefits
Depreciation on the property and furnishings, mortgage interest deduction, and the ability to write off travel, supplies, and management fees can offset a significant portion of your other income. Talk to a CPA — this isn't financial advice — but the tax math often closes the gap that the cash flow math leaves open.
3. Personal use
If you're going to vacation in Hill Country anyway, a property that loses $15K per year but gives you 4–6 weeks of personal use plus appreciation plus tax benefits might be a better deal than paying $400/night at someone else's rental.
4. Lower purchase price changes everything
Bandera, where you can still buy a viable STR property for $250K–$350K, flips the math. Your mortgage is $1,200–$1,700/month instead of $2,300. Even at Bandera's lower $14K–$23K gross revenue, your fixed costs are proportionally lower. The margins get tighter, but the losses are smaller — and a well-positioned Bandera property near a dude ranch corridor can outperform the median significantly.
5. You already own the property
If you inherited land, bought years ago at a lower price, or own your property free and clear, the mortgage line disappears from the spreadsheet and everything changes. A paid-off property generating $42K gross with $22K in variable costs is netting $20K/year in actual cash flow. That's a completely different investment.
Market-by-market honest take
Fredericksburg
The most proven market, but the most competitive. Nearly 2,000 active listings (per GetChalet's January 2026 count). Saturation is real — the median property earns $41K–$48K, but the median new listing entering this market is fighting for scraps unless it has a genuine differentiator (location within walking distance of Main Street, a pool, unique architecture). Buy-in is high ($500K+ for anything competitive per Zillow's current home value index). Best for: experienced operators who will self-manage and optimize aggressively, or cash buyers who don't carry a mortgage.
Canyon Lake
The widest variance of any Hill Country market. AirROI data shows peak-month revenue hitting ~$5,000 and low-season months dipping to ~$2,300. A lakefront home with a dock and hot tub can gross $60K+. A generic 3-bedroom a mile from the water might struggle to hit $25K. Occupancy drops to the mid-20s in winter (AirROI reports low-season occupancy around 26.5%). Best for: investors who can find a truly lakefront or lake-view property and are comfortable with seasonal swings.
The elephant in the room — water levels. Canyon Lake is sitting at roughly 58–59% of its conservation capacity as of April 2026, more than 20 feet below the full pool mark of 909 feet. The lake hasn't been full since late 2021, and it hit a record low near 878 feet in mid-2025 before a brief flood-driven recovery. Prolonged drought, population growth, and downstream water demands are compounding the problem. Local businesses are already feeling it — restaurants have closed, boat ramps have shut down, and tourism-dependent operators are reporting real pain. The lake is still usable — the main channel runs 80–100+ feet deep even now — but the shoreline has receded significantly, and some "lakefront" properties no longer look or feel lakefront. If you're buying in Canyon Lake for STR income, you need to underwrite the possibility that low water levels aren't a temporary blip but a recurring reality. Factor that into your revenue projections, your property selection, and your guest experience strategy. A Canyon Lake STR that doesn't depend entirely on the water — one with a pool, outdoor living space, or proximity to the Guadalupe River — hedges this risk better than one that's banking on dock access alone.
Wimberley
Charming market with genuine character, but the regulatory environment is evolving. Wimberley requires a Conditional Use Permit (CUP) process that can take months and involves a community impact statement, septic evaluation, and emergency management plan. Smaller listing pool means less competition, but also less demand data to rely on. AirROI notes that top-10% Wimberley properties hit 71%+ occupancy — which tells you this market rewards quality heavily. Best for: someone who wants to create a brand property with a unique identity and doesn't mind the permitting process.
Dripping Springs
The Austin spillover play. Strong event-driven demand (wedding venues, breweries, concerts along 290). But the median numbers are misleading — AirDNA's $441 ADR is pulled up by a handful of luxury estate rentals. The typical modest property performs closer to $25K–$35K gross. Also, platforms do not auto-remit HOT to the City of Dripping Springs, which means more compliance headaches for you as the operator. Austin's tightening STR rules (the July 2026 platform enforcement deadline will begin delisting unlicensed properties) may push some demand here, but it may also bring more scrutiny to surrounding jurisdictions. Best for: someone with an event-capable property or a property near the distillery/brewery corridor.
Bandera
The dark horse. Lowest buy-in, lowest ADR, lowest competition. AirDNA reports ~375 listings with a 35% occupancy rate and $184 ADR — the weakest raw numbers in Hill Country. But Bandera's draw is authentic: dude ranches, horseback riding, the Medina River, and the "Cowboy Capital of the World" brand. The guest profile is families and weekend cowboys, not bachelorette parties. If you can buy right ($250K–$350K), keep costs minimal, and position the property authentically, Bandera can pencil out. Best for: lifestyle investors who want to live nearby, buy affordably, and aren't chasing maximum revenue.
LTR comparison: the boring alternative that sometimes wins
Let's run the same $450K property as a long-term rental in Hill Country. Typical LTR rent for a 3-bedroom in these areas runs $1,800–$2,500/month depending on location.
At $2,200/month rent:
Annual rental income: $26,400
Vacancy (5% — one month turnover): -$1,320
Fixed costs (mortgage, tax, insurance): -$39,724
Maintenance (lower than STR — ~$2,500): -$2,500
Property management (8–10%): -$2,112
Net cash flow: -$19,256
Still negative — because the mortgage at today's rates is the killer in both scenarios. But the LTR model has less operational headache, less furnishing cost, less wear and tear, and more predictable income. For many people, losing $19K/year on an LTR that's building equity is preferable to losing $28K/year on a managed STR doing the same thing.
The STR wins when: you self-manage, you're a top-quartile operator, or you already own the property. The LTR wins when: you want passive income, you live far away, or you don't have the appetite for hospitality management.
The hybrid play nobody talks about
Here's what some smart Hill Country operators are doing: STR during peak season (March–November), then flipping to a furnished mid-term rental (MTR) during the slow winter months. Travel nurses, remote workers, insurance claims tenants, and winter Texans will pay $2,500–$4,000/month for a furnished 30+ day stay. No cleaning turns, no guest management, steady income during the months when your Airbnb would be sitting at 27% occupancy.
This hybrid model can add $7,500–$12,000 in winter revenue while reducing your management workload during the slowest months. It's not glamorous, but it's smart.
What I tell my clients
When someone comes to me wanting to buy an STR in Hill Country, I don't try to talk them into it or out of it. I run the numbers on the specific property they're looking at — not market averages, but the actual projected revenue for that property based on comparable listings, that property's tax rate, that property's insurance quote, and that property's realistic expense profile.
Sometimes the math works. When it does, we move fast.
More often, the math works only if certain conditions are true: you self-manage, you buy below market, you add an ADU, you operate the hybrid model, or you're in it for appreciation and tax benefits rather than cash flow. Those are all legitimate strategies — but you need to go in with eyes open, not Instagram-filtered.
The worst outcome isn't buying an STR that underperforms. It's buying one without running the numbers first.
The off-market list
Here's something most people don't realize about Hill Country real estate: the best deals rarely hit Zillow. Ranchers sell to neighbors. Estates settle quietly. Landowners test the waters with their agent before going public. By the time a property is on the MLS, the insiders have already passed on it — or scooped it up.
I keep a private list of people who want first access to off-market Hill Country properties — land, ranches, STR-ready homes, and investment plays that I hear about through my network before they're listed publicly. When something crosses my desk that fits, I send it to the list. No algorithms. No Zillow bidding wars. Just a heads-up from someone who's plugged into the community.
→ Join Lauren's Off-Market List
Drop your email. Tell me what you're looking for (acreage range, area, budget, STR vs. lifestyle). When I hear about something that fits, you'll know before the market does.
Free. Private. No spam — just opportunity.
Ready to look at actual properties?
If you've read this far, you're serious. Let's skip the generic Zillow browsing and talk about what's actually on the market right now, what the real numbers look like on specific properties, and whether an STR, LTR, or hybrid strategy fits your situation.
I run these numbers for my clients before they make an offer — not after.
Lauren Byington: 830-992-9914
HillCountryInsider.com
How I sourced this data
Transparency matters. Here's exactly where the numbers in this article come from and how I used them:
I cross-referenced six publicly available STR analytics platforms: AirDNA MarketMinder (airdna.co), Airbtics (airbtics.com), Rabbu (rabbu.com), GetChalet (getchalet.com), AirROI (airroi.com), and Awning (awning.com). Home value data comes from the Zillow Home Value Index. Regulatory information was verified against official city and state sources, including AustinTexas.gov and the City of Dripping Springs.
Why ranges, not single numbers: Every platform uses different methodology. Some count only Airbnb listings; others aggregate Airbnb, Vrbo, Booking.com, and direct booking sites. Some define "active" as any listing with at least one booking in the past 12 months; others use a stricter threshold. Time windows vary — some report trailing 12 months, some report calendar year, some report a rolling average. When Airbtics reports Canyon Lake at $32K annual revenue and Rabbu reports $56K, neither is wrong — they're measuring different pools of properties over slightly different periods.
Rather than pick the number that supports a narrative, I present the range and let you see the spread. Where a number seemed like an outlier or was skewed by a specific property type (like Dripping Springs' $441 ADR being inflated by luxury event estates), I noted that explicitly.
What this data is NOT: These are market medians and averages. They do not predict what your specific property will earn. A beautifully designed, professionally photographed, optimally priced property in a prime location will dramatically outperform the median. A generic, poorly maintained listing with bad photos will dramatically underperform it. The expense model is based on typical ranges I've seen across client properties and industry standards — your actual costs will vary based on your property, your management style, and your county's tax rate.
This article is not financial or investment advice. I'm a real estate agent, not a CPA or financial advisor. The tax benefits, depreciation strategies, and appreciation projections mentioned here are general observations — consult a qualified tax professional before making investment decisions based on any of this.
When this data expires: STR markets move. I plan to update this article quarterly with fresh data pulls. If you're reading this more than 6 months after the publish date of April 2026, the specific numbers may have shifted — check the platforms directly for the latest, or reach out to me and I'll tell you what I'm seeing in real time.
Published April 2026 by Lauren Byington · Hill Country Insider · hillcountryinsider.com
Last data pull: Q1 2026 (trailing 12-month data from mid-2025 through early 2026)
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