1st Advantage MortgageSan Marcos, TX DSCR loans work like they do elsewhere: the lender divides the property's rent by its full monthly payment. The local inputs are a median gross rent of $1,322, median real estate taxes of $4,774 and a renter share of 69%.
Local data for San Marcos investors
Renters who pay cash rent in San Marcos have a median gross rent of $1,322 a month, close to the Texas median of $1,403, while owner-occupied homes carry a median value of $310,400. The gross rent-to-value ratio for San Marcos works out to 5.1% (twelve months of median rent divided by median value), a thin gross ratio, which tells you purchase prices are high relative to rent. The figure combines all rental types with all owner-occupied homes, so it is a screening number and not an appraisal.
| Indicator | Texas | San Marcos | Difference |
|---|---|---|---|
| Annual property tax bill, median | $4,232 | $4,774 | +13% |
| Household income, median | $78,476 | $51,281 | -35% |
| Typical owner-occupied value | $283,800 | $310,400 | +9% |
| Typical monthly rent | $1,403 | $1,322 | -6% |
| Share in 2-4 unit buildings | 5.3% | 11.1% | +112% |
| Share of homes detached | 64.4% | 35.0% | -46% |
| Long commuters, 45 min plus | 16.9% | 16.2% | -4% |
| Degree holders, age 25+ | 33.8% | 38.3% | +13% |
| Workers on their own account | 10.5% | 7.5% | -29% |
| Renters paying 30%+ of income | 51.7% | 66.5% | +29% |
| Units sitting vacant | 9.4% | 7.7% | -18% |
| Typical construction year | 1992 | 2001 | |
| Households that rent | 37.4% | 69.2% | +85% |
| Tax as a share of home value | 1.49% | 1.54% | +3% |
| Residents (Census estimate) | 30,188,424 | 70,897 |
The renter share in San Marcos is 69.2%, well above the Texas median of 37%, so the rental market is large and competitive. Against a median household income of $51,281 (well below the Texas median of $78,476), 67% of renters report rent at or above 30 percent of income.
What San Marcos investors are buying
Apartments and small buildings carry real weight in San Marcos, about 58% of units, with duplexes through fourplexes at 11%. San Marcos's median home was built in 2001, so many rentals are newer and the diligence shifts to association documents and builder warranties.
San Marcos reports 8% of units vacant and a rental vacancy rate of 5.1%, a measure of how quickly a listed unit might lease.
Investor takeaways for San Marcos
A 5.1% gross ratio leaves little margin in San Marcos. Every dollar of insurance, tax and association dues matters, and some deals work only with lower leverage. Median build year 2001 means many properties still have original systems under warranty or well within their lives. Renter-heavy markets like San Marcos favor investors with a clear tenant profile, whether workers, students or families.
The payment side of the San Marcos ratio
Homeowners in San Marcos paid a median $4,774 in real estate taxes, about 13% above the Texas median of $4,232, an effective rate near 1.54% of home value against 1.49% statewide. Measured against a year of median rent, taxes eat about 30% before any other cost shows up.
FEMA's National Risk Index (version 1.20, December 2025) rates Hays County as relatively moderate overall for natural hazard risk, with hail (relatively high), tornadoes (relatively high) and lightning (relatively high) among its leading hazards.
| Hazard in Hays County, FEMA index | Level |
|---|---|
| Winter weather exposure | Relatively High |
| Lightning exposure | Relatively High |
| Tornadoes exposure | Relatively High |
| Hail exposure | Relatively High |
| Social vulnerability score | Very Low |
| Annualized loss estimate | Relatively Moderate |
| Composite risk | Relatively Moderate |
A San Marcos landlord policy is priced on roof, age, wiring and location, and the annual premium divided by twelve lands in the payment the lender tests.
Running the numbers in San Marcos
Worked through with this city's own medians: rent of $1,322 against taxes of about $398 a month leaves $924 for principal, interest, insurance and dues at a 1.00 ratio, and $660 at a 1.25 ratio. That arithmetic is the whole game, and the real rent and quotes for your address replace these medians.
What TX law and San Marcos require of landlords
This page does not claim to list every San Marcos rental ordinance. Before you buy, call the city's planning or code office and Hays County to ask about rental registration, inspections and short-term rental permits, and read any association declaration. On lodging taxes, a San Marcos host should read this first. Texas imposes a state hotel occupancy tax on rentals of 29 days or less, collected by the owner unless a booking platform collects for the owner, and cities, counties and special districts can add a separate local hotel tax that the owner must register for and remit.
A landlord collecting a deposit in San Marcos works under Tex. Prop. Code §§ 92.103, 92.104, 92.107, which sets the limit as follows: No statutory cap. Rent regulation: No; local rent control is preempted except in declared disasters (Local Gov't Code 214.902). Expect to give 1 month (unless the lease says otherwise) of notice to end a month-to-month arrangement at a San Marcos rental.
Neighbors of San Marcos by the numbers
Of the cities listed, Austin is the most expensive ($555,300 median value) and San Antonio the least ($235,700); San Marcos sits at $310,400.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Round Rock | 44% | $6,424 | $418,600 | 127,786 | $1,763 |
| San Antonio | 48% | $4,122 | $235,700 | 1,479,835 | $1,324 |
| Austin | 57% | $8,024 | $555,300 | 979,539 | $1,729 |
| New Braunfels | 35% | $4,500 | $339,400 | 104,643 | $1,654 |
| San Marcos | 69% | $4,774 | $310,400 | 70,897 | $1,322 |
Employers and institutions near San Marcos rentals
Roughly 7.5% of employed people in San Marcos are self-employed, a base of investors and landlords for whom a rent-based loan is a practical option. Other workforce markers: government workers are about 19% of employment, 38% of adults hold a bachelor's degree or higher and 16% of commuters travel 45 minutes or more.
Employers named in Wikipedia's San Marcos entry for 2021 include Amazon, Texas State University, San Marcos Premium Outlets, Tanger Factory Outlets and SMCISD, which is where many tenants earn the income that pays rent. Colleges tied to San Marcos include Texas State University, and campus-adjacent streets often rent to students and staff on a school-year rhythm. Transportation links include interstate access via I-35 and air service through San Marcos Airport and San Marcos Municipal Airport. Easy highway and air access helps both tenant commutes and remote ownership.
Next steps for a San Marcos purchase
Bring the San Marcos numbers to a loan officer: the rent, the taxes, the insurance and your reserves. Apply online or ask for a quote, and use the calculator to preview the ratio.
More Texas markets
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- DSCR loans in Round Rock, TX
- Every market we cover
Source links
- U.S. Census Bureau data for San Marcos
- FEMA risk data used for San Marcos
- San Marcos overview (Wikipedia)
- San Marcos landlords: see Tex. Prop. Code §§ 92.103, 92.104, 92.107
- State rule cited for San Marcos hosts: Texas Comptroller, hotel occupancy tax
- Hotel tax FAQ for short-term rentals (Texas)
We took the San Marcos data from Census ACS five-year tables for 2020 to 2024, estimates with margins of error. RedFlagLease (CC BY 4.0) supplies the Texas landlord-tenant notes, and the statutes are linked. Reviewed in October 2026, with no promise that rules have stayed put.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
What rent do DSCR lenders use for a San Marcos rental?
Expect to supply a lease, or let the appraiser's rent schedule stand in for one; the San Marcos median rent of $1,322 is context and not a substitute.
Does the ratio in San Marcos include taxes and dues?
They count in full. A 1.25 ratio on $1,322 of rent permits a payment near $1,058, and median San Marcos taxes take about $398 of it each month.
How high are property taxes in San Marcos?
The Census reports a median of $4,774 a year for San Marcos owners, about 1.54% of median value against 1.49% for Texas. The county reassesses after a sale, so ask the tax office for an estimate on your purchase price.
Will a lender count nightly rental income at a San Marcos property?
Possible where lender guidelines allow it, subject to San Marcos and Hays County rules and to the building's association. Lenders usually average a year of bookings and discount the result.
How much deposit can a San Marcos landlord collect?
The cap is stated as follows: No statutory cap. A landlord has 30 days to return the deposit. Both come from Tex. Prop. Code §§ 92.103, 92.104, 92.107.
Should I worry about hazards at a San Marcos property?
FEMA's index puts the county at relatively moderate overall. A lender cares about the premium and any flood requirement, which are address-specific in San Marcos.
Should a San Marcos rental be bought in an LLC?
No, but it is common. Entity borrowers supply articles, an operating agreement and an EIN letter, and the owners typically guarantee the loan. A Texas attorney can advise on structure.