If you’re trying to decide whether short-term rentals are worth your investment in Killeen, we have some information to offer you that might help you decide.
There is never a single answer that fits every investor profile. The best places to invest and the best properties to invest in will depend on your investment goals and financial plans now and in the future.
As professional property managers in Killeen, we focus on long-term residential leases that offer owners stability and consistent, recurring income. But, we can see the value of a short-term rental, especially when you consider the high per-night rental values that are available and the demand from travelers and vacationers who may only be in town for a few weeks, a few months, or even a few days.
Let’s dive into the pros and cons of offering short-term rentals in Killeen.
Pros: Benefits of Investing in Short-Term Rentals in Killeen
Killeen is a growing city and rental market that draws attention for its unique blend of steady economy, population growth, and proximity to Fort Cavazos, one of the largest U.S. military bases. With a mix of visiting military families, college students, traveling professionals, and vacationers, Killeen offers consistent demand for short-term rental properties.
Here are some of the best reasons to rent out short-term properties:
1. Higher Income Potential
Short-term rentals can provide significantly higher income compared to traditional long-term leases. Nightly and weekly rental rates in Killeen are competitive due to consistent tourism, visiting families, and business travelers. A well-appointed property in a prime location can bring in more revenue in a month than many long-term leases do.
Plus, Killeen’s affordability relative to other Texas cities allows investors to acquire property at a lower cost, all while benefitting from higher yields in the short-term rental market.
2. Flexibility in Property Use
One of the standout advantages of short-term rentals is the flexibility they offer. Unlike long-term leases, short-term rentals allow property owners to use the property themselves between guest bookings. Maybe you’ll want to block off a few days to visit Killeen yourself or provide a space for friends and family. With short-term rentals, that’s entirely within your control. If you know you’ll have a son or a daughter looking for a place to live, you might want to keep your property available instead of wrapping it up in a long-term lease with a tenant who thinks of that property as their home.
3. Consistent Demand from a Diverse Market
Demand for short-term rentals in Killeen remains steady throughout the year. It’s fueled by a mix of markets, including military families who are visiting Fort Cavazos and college visitors who are coming to see Central Texas College or Texas A&M University – Central Texas. We also see plenty of traveling consultants, business professionals, and contractors in the area who might opt for a rental home rather than a hotel. And tourism is growing. Sightseers looking to explore Killeen’s local attractions are also renting short-term properties.
This diverse range of rental demographics minimizes the risks of long-term vacancies, making it easier to maintain a steady stream of income.
4. Growth in Real Estate Value
Killeen’s housing market has shown steady growth due to its expanding population and economic stability. Even beyond rental income, short-term rental investments are likely to appreciate over time, increasing the long-term value of your property portfolio. When you’re renting out to short-term guests instead of long-term tenants, you can make decisions faster about your property. If you want to sell right away, you don’t have to wait out a lease agreement while planning for a tenant’s move-out.
5. Opportunity for Hands-Off Management
If the idea of managing bookings, cleaning schedules, and guest communications sounds overwhelming, don’t worry—professional property management companies in Killeen like ours are ready to help. We handle the day-to-day operations of your short-term rental, ensuring that it runs smoothly without requiring significant effort on your part.
6. Strengthened Community Ties
Not everyone loves the concept of short-term rentals and the impact they can have on a community. However when done ethically and responsibly, short-term rentals contribute positively to the local economy. They support tourism, create jobs through maintenance and cleaning services, and encourage travelers to spend at local businesses. Many neighborhoods in Killeen welcome professionally managed short-term rentals that operate respectfully within the community.
Investing in short-term rentals in Killeen, TX, can be an excellent opportunity for real estate investors to boost profitability, diversify their portfolios, and tap into a growing market.
Cons: Drawbacks to Short-Term Rentals in Killeen
While short-term rental investments like Airbnb or vacation homes might seem lucrative at first glance, they come with numerous challenges that can impact your profit margins and peace of mind. For most real estate investors in Killeen, long-term leases offer greater stability, reliability, and even profitability in the long run.
Here’s what to watch out for if you move forward with short-term rentals.
- Volatile Income
Short-term rentals hinge on demand, and Killeen’s market doesn’t always guarantee steady bookings.
While tourism hotspots benefit from consistent visitor traffic, Killeen’s primary draw is Fort Cavazos, which attracts a niche group of visitors rather than throngs of tourists. During off-season periods or slower months, your income from short-term rentals could take a significant hit. Conversely, long-term tenants provide stability with predictable monthly rental income and fewer gaps in occupancy, helping you reliably plan your finances.
- High Operating Costs
Managing a short-term rental isn’t just about collecting nightly rates. There are numerous recurring expenses that you wouldn’t face with long-term leases, such as:
- Furnishing Costs: To appeal to guests, short-term rentals need to be fully equipped with furniture, decor, kitchen appliances, and more. However, furniture that is regularly worn out must be replaced more often.
- Higher Utility Bills: Unlike long-term rentals where tenants pay utilities, short-term rental owners bear electricity, water, and internet costs to attract bookings.
- Frequent Cleaning and Maintenance: After each guest leaves, you’ll need professional cleaning services. Maintenance issues also arise frequently due to high turnover.
When these costs start adding up, your profit margins can shrink dramatically, making long-term leases a more financially sustainable option.
- Stricter Regulations
Short-term rentals are increasingly subject to changing local laws and regulations. Killeen has yet to establish sweeping restrictions like other Texas cities, but registration is required, and there are taxes that need to be paid. Owners will have to navigate the risk of evolving ordinances, which is always present. Regulations often include licensing requirements, occupancy limits, and even bans in certain neighborhoods. These added complexities can limit the profitability and legal security of short-term rental properties.
On the other hand, long-term leases enjoy far greater legal stability, as they operate under well-established tenant-landlord laws rather than fluctuating local ordinances.
- Constant Management Demands
Managing a short-term rental can become a full-time job, especially in a market like Killeen. Here’s why:
- You need to quickly respond to guest inquiries, complaints, and booking requests. Guests in a short-term property expect hotel-like services, which means owners or hosts are on call 24/7.
- Property turnover every few days or weeks means more administrative work coordinating cleaning schedules, maintenance, and check-ins.
- Guest reviews directly affect your future bookings, so you must go above and beyond to provide excellent service.
If you’re not prepared to dedicate significant time or hire a property management company—which comes at an additional cost—long-term rentals are a less demanding choice. With long-term leases, tenant relationships are straightforward, with only occasional communication regarding maintenance or lease renewals.
- Tenant Quality and Risk
It’s not easy to screen every visitor who’s planning to spend a weekend on your property. Short-term renters are often transient and have less emotional or physical investment in their stay. This can sometimes result in misuse of your property or unpaid damages that fall outside insurance coverage.
Long-term tenants, particularly thoroughly screened tenants, often take better care of the property because they consider it their home. Building effective relationships with long-term tenants leads to fewer headaches regarding wear and tear or costly repairs.
We see and respect the benefits of short-term rentals, and we can help you manage those properties if that’s the way you decide to go.
Our experience in Killeen’s rental market tells us that long-term leases are better suited for this area, however. There’s more steady income, and with reliable monthly rent, you can budget confidently and minimize financial surprises. There are also fewer expenses. Owners can avoid recurring costs for guest turnover, cleaning, and utilities.
Killeen’s housing market is familiar territory for landlords leasing to long-term tenants, particularly military families or professionals relocating for work. Plenty of tenants are looking for long-term homes to rent.
Let’s talk about how we can make sure you’re making the best decisions for your investment portfolio with Killeen rental properties. Contact us at Shine Residential Management.
A property management company based in Harker Heights, Shine Residential Management cares for exceptional single-family homes throughout Central Texas, including in Killeen, Temple, Belton, Copperas Cove, Salado, and Georgetown.
