A San Antonio Landlord's First Year: What Breaks and How to Budget for It

The first year of owning a San Antonio rental is not where you make money. It is where you find out whether your numbers work. Between a 100-degree July that murders a tired condenser, a hail storm that totals the roof, a property-tax bill that doubles because you just lost the prior owner's homestead cap, and a tenant who stops paying in month nine, the first twelve months are a stress test. Plan for it and the rental pays you for twenty years. Skip the planning and you will refinance, sell, or call an investor at a discount.

Below is the realistic failure list for a Bexar County single-family rental or small multifamily, ordered roughly by how often these issues land in month one through month twelve, with what to do before they do.

The property-tax shock in October

This is the single most common first-year surprise, and it has nothing to do with the tenant. If you bought the property from an owner-occupant, their homestead exemption and the 10% cap under Texas Tax Code § 23.23 disappear the January after closing. BCAD reappraises at full market value, and the exemption comes off. On a home that was assessed at $240k under a long-held homestead, the new assessment can land at $330k or more, and your October tax bill reflects it.

How to plan for it

• Pull the BCAD record before you close and note the prior assessed value vs. the likely market value. Underwrite to the market value, not the capped value.
• File a protest in May using Form 50-132 if the market value looks high. Informal first with a BCAD appraiser, then the ARB under § 41.41 if needed. Comparable sales from SABOR and condition photos are your ammunition.
• If your lender is escrowing taxes and insurance, expect an escrow shortage notice the following year. Either pay the shortage in a lump or let the monthly PITI jump. Do not be surprised when the mortgage payment goes up $200–$400.

HVAC failure in the first hot month you own it

San Antonio runs 95+ from June through September, and a tenant without working AC in August is not a tenant who waits patiently. Under Texas Property Code § 92.052, the landlord has a duty to repair conditions that materially affect health and safety; case law and local JP courts treat no-cooling in a Texas summer as exactly that. You have seven days from written notice before the tenant can pursue § 92.056 remedies, and in practice you should be moving same-day or next-day.

A 10–15 year-old system is borrowed time. If the inspector flagged age, assume the compressor, capacitor, or coil is the first-year repair. Budget:

• Capacitor or contactor: $200–$400, same-day fix.
• Coil or evaporator: $1,500–$3,500.
• Full condenser + air handler replacement: $7,000–$12,000 for a typical 3-ton system, more for two-story homes with zoning.

Get on a maintenance plan with a local HVAC company before May. A $150 spring tune-up finds the $400 capacitor before it becomes the $1,100 emergency weekend call.

Plumbing, slab leaks, and the Texas clay problem

Much of Bexar County sits on expansive clay — especially the south, east, and parts of the near northwest. Clay swells in rain and shrinks in drought, and it moves foundations. Slab movement cracks copper supply lines under the slab, and you find out when the water bill from SAWS jumps 300% or a warm spot appears on the floor.

What fails in year one:

• Water heaters older than eight years. Budget $1,400–$2,200 installed for a standard 40–50 gallon unit with a drip pan and current code compliance.
• Cast-iron drain lines in homes built before ~1980 (much of 78201, 78207, 78210, 78214). A scope camera before closing is $300 well spent.
• Outdoor hose bibs that freeze in the one hard January freeze SA gets every couple of years. Foam covers cost $3 each. A burst bib inside a wall costs $1,800.

For slab leaks, reroute above the slab through the attic rather than jackhammering — cheaper, faster, and your tenant can stay in place.

Roof damage after the next hail storm

San Antonio sits on hail alley. A serious storm hits somewhere in the metro most years, and insurance claims cluster around those events. If the roof is more than 12 years old, plan on replacing it during your hold period, and plan on a deductible of 1–2% of dwelling coverage (not a flat $1,000) on most landlord policies written in Texas after the 2016–2017 loss years.

Before your first spring:

• Confirm your policy is a DP-3 landlord policy with replacement cost, not actual cash value. ACV on a 15-year-old roof pays almost nothing.
• Photograph the roof at move-in from the ground on all four sides. You will need the before photos to distinguish new hail damage from pre-existing wear.
• Keep a roofer's contact, not just the 1-800 storm chasers who show up the week after.

The tenant problem you did not see in screening

Even with solid screening under the standards in the Fair Housing Act and Texas Property Code Chapter 92, the first tenant sometimes fails. The two patterns that show up in the first year:

• Late, then non-pay around month six to nine. Job loss, divorce, a co-signer who moved out. You serve a 3-day notice to vacate under § 24.005, file the petition in the correct Bexar County JP precinct (there are four — file where the property sits, not where you live), get a hearing 10–21 days out, and if you win, a writ of possession executes about a week later. Total timeline: 3–6 weeks if uncontested, longer if the tenant answers.
• Lease violations short of non-pay. Unauthorized occupants, a dog that was never disclosed, smoking inside. Document in writing, send notice by a method your lease requires (certified mail + regular mail is the safer combo), and cure-or-vacate before you file.

Budget one month of lost rent plus $500–$1,500 in filing, service, and potential attorney fees per eviction. A vacancy reserve of two months' rent is not optional in year one.

What most people get wrong

1. Treating the security deposit like income. Under § 92.103–104 you have 30 days after the tenant surrenders the property to return the deposit with an itemized list of deductions. Spending it during the tenancy and scrambling at move-out is how landlords end up paying three times the deposit plus $100 plus attorney fees under § 92.109. Keep it in a separate account. Do not touch it.
2. Using a generic online lease. The TAR residential lease (available to SABOR members through TREC-affiliated forms) or a lease drafted by a Texas real-estate attorney handles late fees, the Military Clause under SCRA § 3955 (critical near JBSA-Randolph, Lackland, and Fort Sam Houston), and the § 92.056 repair-request procedure correctly. A generic LegalZoom lease does not.
3. Self-help lockouts or utility shutoffs. § 92.0081 and § 92.331 are specific. Changing locks, shutting off CPS Energy or SAWS service, or removing a door is a fast path to a lawsuit the landlord loses. Use the courts.
4. Underinsuring or relying on the prior owner's policy. The day you close on a non-owner-occupied property, a homeowner policy is the wrong policy. You need a DP-3 with a landlord liability rider. Require the tenant to carry renter's insurance naming you as an additional interest — put it in the lease and verify the declarations page.
5. Skipping the move-in inspection form. Without a signed, photographed condition report, the deposit deduction fight at move-out is one you will lose in JP court. See our separate piece on move-in inspections — this is the single highest-leverage hour of the year.
6. Forgetting that Alamo Heights, Terrell Hills, Olmos Park, Castle Hills, and Leon Valley have their own codes. A rental registration or inspection requirement in Alamo Heights (78209) is not the same as City of San Antonio rules. Check the municipality, not just the ZIP.

A realistic year-one reserve

For a typical $275,000 single-family rental in a neighborhood like Converse, Live Oak, Schertz, or the 78250 / 78240 corridor, the first-year reserve that keeps you out of trouble is roughly:

Bucket	Amount
Vacancy (2 months rent)	$3,500–$5,000
HVAC / plumbing / appliance repairs	$2,500–$5,000
Insurance deductible (hail)	$3,000–$6,000
Tax/escrow shortage after exemption loss	$1,500–$4,000
Eviction + turnover (worst case)	$2,000–$3,500

If you do not have that liquid in a separate account on day one, you are underfunded. Refinance, price the rent correctly, or wait until you do.

Where to go from here

If you are still in the planning phase, read the other pieces in this pillar on setting market rent, screening, and lease drafting before you list. When you are ready to market the unit, you can list your rental on RentInSA at /list-your-home, browse the local rental market at /rentals to benchmark your pricing, or connect with an investor-friendly agent at /agents who has run the Bexar County numbers more than once. The goal of year one is not to maximize cash flow. It is to survive it cleanly so year two through year twenty can do their job.