I once organized the rental yields of two properties in San Antonio in a spreadsheet. It involved dividing the rental income by the purchase price, and after seeing the results, I became more curious about the relationship between home prices and rent in this city. Given the recent market, it seems like a good time to examine this relationship.

According to Zillow, the typical home value in San Antonio is $251,065, which has decreased by 2.1 percent compared to a year ago as of May 31, 2026. RentCafe reports that the average rent is $1,264, down 2.65 percent from a year ago. Both home prices and rents are trending downward.

The ratio of home prices to rent, calculated by dividing the home price by the annual rent, yields a figure of about 17 for San Antonio. This is relatively low compared to other major cities in Texas, indicating that the barrier to entry for purchasing is comparatively lower. However, the simultaneous decline in both home prices and rents is something to watch closely. A decrease in rent suggests that rental demand is not as tight as it used to be.

In the industry, there is a common benchmark for this ratio. A ratio below 15 is seen as favoring purchases, while above 20 leans towards renting. The figure of 17 for San Antonio is close to the boundary favoring purchases, but the concurrent decline in home prices and rents makes it difficult to use as an absolute standard.

Among the cases I reviewed, some investors consider purchasing based solely on rental yields, but when factoring in vacancy periods and management costs, the actual returns often end up being lower than initially calculated. There is no guarantee of specific returns, so it's safer to adopt a conservative approach.

If the purpose is to live in the home, the approach changes. If you have a down payment ready and plan to stay for more than five years, the current period of suppressed home prices may appear to be a less burdensome time to enter the market. Conversely, if your stay is short or there is a possibility of moving, it may be safer to continue renting when considering closing costs and selling expenses.

When it comes to mortgages, in addition to principal and interest, property taxes and insurance premiums are added monthly. Texas has no state income tax, but property tax rates are relatively high, so families moving from other states should definitely factor this in. If you are looking for areas with good school districts, consider using metrics like GreatSchools, but keep in mind that school district boundaries change frequently, so it's advisable to verify the assigned school for the specific address before purchasing.

If your down payment is less than 20 percent, a monthly PMI (private mortgage insurance) will be added, and closing costs can range from 2 to 5 percent of the home price, which are often overlooked in actual market observations. It's also a good practice to set aside an emergency fund equivalent to three to four months of living expenses. After purchasing, moving costs, furniture, and minor repairs often come all at once. The closing period typically takes about 30 to 45 days. Aligning this period with the end of your current rental contract can help reduce double housing costs. San Antonio is a region with frequent relocations for military personnel, so the turnover of rental properties is relatively fast, which is something to consider if you plan to continue renting.

If you transition to purchasing without a clear idea of your length of stay, you may incur losses from closing and selling costs when you move again in a few years. On the other hand, if you are certain about staying in this city for a long time, the current period of suppressed home prices is not a bad time to enter the market. After purchasing, you will also need to handle repairs for things like roofs or HVAC systems that the landlord would have taken care of when renting.

This article is not investment or legal advice, and I recommend consulting with a professional before making any actual contracts.