San Antonio is the most overlooked mid-term rental market in the country. While every cost seg shop is chasing Austin Airbnbs, San Antonio investors are quietly running fully-furnished 30-to-180 day rentals to traveling military personnel, contracted nurses at Brooke Army Medical Center, and PCS-ing families staging between assignments — and getting the same FF&E density as a true STR without any of the city ordinance risk. Stone Oak’s proximity to BAMC alone drives a furnished-rental ecosystem most national operators have never heard of.
- $90,000 Accelerated Depreciation
- $33,300 Est. Year-1 Tax Savings
- 42x Return on Study Cost
Want a number for a specific property here? Use the calculator — it’s pre-set with property-type defaults you can adjust to match your basis and tax bracket.
Cost Segregation in San Antonio, TX
San Antonio Investment Snapshot
- Typical Price Range $350K–$475K
- Revenue Range $2,800–$4,500/mo gross MTR (furnished, 30–180 day stays)
- Common Property Types Stone Oak SFR, Alamo Heights bungalow, Universal City new-build, Schertz suburban
- State Income Tax 0%
- Top Neighborhoods Stone Oak, Alamo Heights, Universal City, Northeast Side, Schertz
- Typical Year-1 Savings $24,000–$42,000
The San Antonio Market
San Antonio’s investor playbook does not look like Austin’s, Dallas’s, or Houston’s. The city is anchored by Joint Base San Antonio (the largest joint base in the Department of Defense — combining Lackland, Randolph, and Fort Sam Houston) and Brooke Army Medical Center, the Army’s only Level 1 trauma center. That single fact reshapes the rental market: there is constant 30-to-180 day demand from PCS-ing military families, traveling medical contractors at BAMC, and corporate relocations tied to USAA, Valero, and the surrounding defense contractor ecosystem.
Stone Oak — the master-planned community 18 miles north of downtown — is the hub. Its proximity to both BAMC (10 miles) and the Northeast quadrant of JBSA (15 miles) makes it the default destination for a furnished rental targeting either audience. Properties run $375K–$500K for 3BR/2BA SFRs in HOA-managed neighborhoods with pools and gym amenities. Alamo Heights — the historic enclave inside Loop 410 — runs higher ($500K–$800K) and serves a more white-collar relocation clientele. Universal City and Schertz, on the JBSA-Randolph side, run $300K–$425K and target enlisted families on PCS orders.
The MTR play is the underappreciated angle. A 30-to-180 day stay is too long to be regulated as an STR (San Antonio’s STR ordinance only applies to stays under 30 days, and even then it is permissive compared to Austin or Hillsborough County) but too short to be a traditional unfurnished LTR. Investors furnish the property to corporate-housing standards — full kitchen, linens, smart TVs, work-from-home setups, washer/dryer — and target the platforms that serve relocations: Furnished Finder, Zeus, Blueground, military housing referral services. The result is FF&E density indistinguishable from an Austin Airbnb, but with multi-month bookings and zero ordinance risk.
Why Cost Segregation Hits Different in San Antonio
The MTR business model is the cost seg engine. A fully-furnished 30-to-180 day rental carries the same 5-year FF&E bucket as a short-term rental: every appliance, piece of furniture, electronic, linen package, and decor element is depreciable personal property. On a $385K Stone Oak rental, the 5-year bucket alone routinely clears $35K–$45K — comparable to a $500K+ Austin STR despite a 25% lower purchase price.
Texas climate adds a meaningful 15-year bucket. Every Stone Oak SFR has a privacy fence (mandatory in most HOAs), a covered patio or pergola, irrigation (San Antonio’s drought regimes make landscaping irrigation effectively required), and frequently a pool or hot tub. The 15-year property bucket on a typical $385K MTR runs $35K–$50K. Add the 5-year FF&E and the total reclassified basis often clears 28–30% — at the high end of residential cost seg outcomes.
Texas zero-state-tax math is the multiplier. Every reclassified dollar saves the federal marginal rate (37% top bracket) with no state offset, no state recapture, and no state conformity issues. A San Antonio MTR producing $90K in accelerated depreciation generates $33,300 in year-one federal savings — clean, simple math.
A Real San Antonio Example
A 3BR/2BA new-build in Stone Oak’s Sonterra section, purchased for $385K in late 2024 and immediately furnished as an MTR targeting BAMC traveling nurses and PCS military families. After pulling $75K of land value, the depreciable basis lands at $310K. The cost seg study identifies $42K in 5-year property (full appliance package, two queen and one king mattress set, dining and living room furniture, smart TVs in every room, work-from-home desk and Herman Miller chair, kitchenware and small appliances, washer/dryer, ceiling fans, blinds and curtains, area rugs, smart locks and security cameras), $9K in 7-year property (built-in custom storage and closet systems), and $39K in 15-year property (privacy fence around the entire backyard, paver patio with pergola, drip irrigation system, San Antonio xeriscape with mature live oaks and crepe myrtles, hot tub on dedicated electrical, exterior accent lighting). Total reclassified: $90K. At 37% federal and 0% TX state, that is $33,300 in year-one savings.
The MTR positioning matters for the IRS classification. Material participation is achieved through average stay length — for stays of 30 days or longer, material participation is established by the 100-hour-with-no-one-spending-more or 500-hour test (the same as a typical Schedule C business), and the rental is treated as non-passive. The accelerated deductions offset W-2 income directly without needing REPS qualification.
Who Is Doing This in San Antonio
The San Antonio MTR investor profile is unusual: a meaningful percentage are themselves military or former military, often officers or senior NCOs in the $150K–$300K household income range, who used a VA loan or a 1031 exchange out of a previous duty-station rental to acquire the Stone Oak or Universal City property. They are stationed at JBSA or recently transitioned out, and they understand the BAMC and PCS demand patterns from personal experience.
The second profile is the medical professional — physicians and CRNAs at BAMC, Methodist Hospital, and the South Texas Medical Center — who buy a Stone Oak property as an income-producing asset and run it as an MTR through one of the local property managers (Furnished Finder hosts, Zeus partners, or military-friendly small operators). Both profiles benefit from the MTR material participation pathway and the TX zero-state-tax stack.
A third profile worth noting: the PCS-into-the-area investor who buys a primary residence, lives in it for 1–2 years on assignment, then converts it to an MTR when they PCS out. Cost segregation runs at the conversion-to-rental date with a stepped-up basis based on FMV at conversion.
TX Tax Considerations
- Texas has no state income tax. Your cost segregation savings are entirely federal — no state recapture, no state conformity issues, no extra forms. A $90K reclassification at the 37% federal bracket = $33,300 in year-one federal savings.
- Property taxes in Bexar County are high (effective rate 2.0–2.5%) but property tax is unrelated to depreciation. The state income tax exemption is what makes the per-dollar reclassification math clean.
- Your estimate $33,300 Estimated Year-1 tax savings
- $90,000 Accelerated
- 42x ROI on study
- Adjust Your Numbers →
Based on a $385,000 San Antonio MTR property at the 37% federal bracket. Your actual results vary.
Want a number for a specific property here? Use the calculator — it’s pre-set with property-type defaults you can adjust to match your basis and tax bracket.
Common San Antonio Investment Properties
- 3BR/2BA new-build SFR in Stone Oak (Sonterra, Encino Park, Cibolo Canyons)
- Bungalow or 1940s ranch in Alamo Heights or Olmos Park
- Universal City or Converse SFR near JBSA-Randolph
- Schertz or Cibolo new-build serving the JBSA-Randolph and BAMC commuter zone
- Northeast Side fourplex or duplex on Loop 1604
Depreciable Features We Commonly See
- Full furnishing packages — beds, sofas, dining, work-from-home setups
- Kitchen appliance packages plus small appliances and cookware
- Smart TVs, smart locks, security cameras, and Wi-Fi mesh systems
- Washer/dryer pairs and laundry organization built-ins
- Privacy fencing, paver patios, pergolas, and outdoor kitchens
- Pool and hot tub installations with automated equipment
- Drip irrigation systems and xeriscape landscaping
- HVAC, water heater, and tankless water systems
What People Worry About (and What Actually Happens) “Will this trigger an IRS audit?”
No. Cost segregation is explicitly supported by IRS guidelines (Rev. Proc. 87-56) and the IRS Audit Techniques Guide for Cost Segregation. Tens of thousands of studies are filed every year. Our reports are designed to withstand scrutiny — that’s why they run 40+ pages with component-level documentation.
audit risk and cost segregation → “Is an MTR really treated like an STR for cost seg purposes?”
For cost segregation purposes, what matters is the property’s depreciable life classification (residential 27.5-year vs commercial 39-year) and the components within it — not the booking platform. A furnished 30-to-180 day rental still has the same 5-year FF&E (appliances, furniture, electronics) and 15-year site improvements (fencing, irrigation, landscaping) as a sub-30-day STR. The reclassification mechanics are identical. What changes is the material participation pathway — MTRs typically use the standard 500-hour or 100-hour-with-no-one-more tests rather than the STR-specific average-7-day test. “What if I sell in a few years?”
You’ll owe depreciation recapture at 25% on the accelerated portion when you sell. But if you 1031 exchange into another property, recapture is deferred indefinitely. Many San Antonio investors are mid-career military who plan to 1031 their San Antonio rental into their next duty-station property. “My CPA hasn’t mentioned this.”
Most CPAs know about cost segregation but don’t proactively recommend it because they don’t do the engineering analysis in-house. That’s what we provide. Your CPA files the results — we email them a CPA-ready package with everything they need, and we answer any questions they have directly.
Why Cost Segregation Works for Mid-Term Rentals
Mid-term rentals — fully-furnished 30-to-180 day stays — have become a distinct asset class in recent years, driven by traveling nurses, military PCS moves, corporate relocations, and remote-work nomads. For cost segregation purposes, MTRs are treated like any other furnished residential rental: the 5-year personal property bucket captures every piece of FF&E, the 15-year bucket captures site improvements, and the residual stays in the 27.5-year shell.
The FF&E density on a true MTR is comparable to an STR. A San Antonio MTR targeting BAMC traveling nurses needs a complete kitchen package (cookware, appliances, dishware), a furnished living and dining room, work-from-home setups in every bedroom, smart TVs and Wi-Fi, linens for a long-stay guest, a stocked laundry room, and security and access systems. Total FF&E typically runs $25K–$45K on a 3BR — most of which is 5-year MACRS personal property.
Beyond FF&E, San Antonio’s climate produces a robust 15-year site improvement bucket. Privacy fencing (HOA-required in most Stone Oak neighborhoods), paver patios, pergolas, irrigation systems, pool equipment, and xeriscape landscaping all reclassify into 15-year MACRS. For investors with an Encino Park or Sonterra property, the 15-year bucket alone often matches the 5-year bucket.
With 100% bonus depreciation permanently restored under the One Big Beautiful Bill Act (signed July 2025), every reclassified dollar is deductible in the first year. For MTR owners who materially participate in the rental operation, these deductions can offset W-2 and business income — not just rental income.
Who This Example Applies To
- Furnished mid-term rental owners (30–180 day average stays)
- Owners of Stone Oak, Alamo Heights, or JBSA-area properties
- Active-duty or recently-transitioned military with rental investment portfolios
- Healthcare professionals at BAMC, Methodist, or South Texas Medical Center with rental properties
- Taxpayers in the 32–37% federal bracket
- Properties with full FF&E, fenced yards, and irrigation systems
If your property is unfurnished, owner-occupied, or rented entirely on 12-month leases, the FF&E reclassification will be limited to base appliances and the cost seg ROI will be lower. Actual results vary based on property age, condition, renovations, and local construction costs.
Hear From a San Antonio MTR Owner Who Did This
This San Antonio MTR investor ordered a cost segregation study and used the accelerated depreciation on their next tax return. Here’s what happened. Money-Back Guarantee Full refund if the study doesn’t save you money See a Sample Download San Antonio sample report
Compare: San Antonio MTR at Different Price Points
| Price | Accelerated | Tax Savings | Study Cost | ROI |
| $300K | $69,000 | $25,530 | $495 | 52x |
| $350K | $81,000 | $29,970 | $795 | 38x |
| $385K | $90,000 | $33,300 | $795 | 42x |
| $475K | $111,000 | $41,070 | $795 | 52x |
| $600K | $140,000 | $51,800 | $795 | 65x |
| $800K | $186,000 | $68,820 | $895 | 77x |
Compare: $385,000 Across Property Types
| Property Type | Accelerated | Tax Savings | Study Cost | ROI |
| Furnished MTR | $90,000 | $33,300 | $795 | 42x |
| Long-Term Rental | $73,000 | $27,010 | $795 | 34x |
| Short-Term Rental | $93,000 | $34,410 | $795 | 43x |
| Duplex | $69,000 | $25,530 | $995 | 26x |
Frequently Asked Questions Why is San Antonio specifically a good MTR market? ▼
The combination of Joint Base San Antonio (the DoD’s largest joint base) and Brooke Army Medical Center (the Army’s only Level 1 trauma center) drives constant 30-to-180 day rental demand from PCS-ing military families and traveling medical contractors. Stone Oak’s proximity to BAMC and the Northeast quadrant of JBSA makes it the default location for furnished mid-term rentals. The MTR business model avoids San Antonio’s relatively mild STR ordinance entirely while still producing STR-level FF&E for cost seg purposes. How is material participation different for MTRs vs STRs? ▼
For an STR with average stays under 7 days, the IRS applies a special test: the property is treated as a non-rental business and material participation is established with 100 hours and no one spending more time, or 500 hours total. For an MTR with stays of 30+ days, the standard rental rules apply — but if you also meet REPS (750+ hours/yr in real estate, more than half your working time), or you have multiple properties and aggregate the hours, you can still treat the rental as non-passive. Most owner-managed MTR operators meet one of these tests. Do PCS military investors get special depreciation treatment? ▼
No special tax rules apply specifically to military investors, but the §121 primary-residence exclusion has a unique extension for active-duty service members: you can suspend the 5-year lookback for up to 10 years while on qualifying military orders, which lets you claim the $250K/$500K capital gains exclusion on a former primary residence even after years of rental use. Cost segregation on the rental period still produces depreciation recapture at sale, but the §121 exclusion can offset much of it for a former primary that was lived in for 2 of the qualifying years.
Learn More About Cost Segregation
- What Is Cost Segregation? — Full explanation of how the study works and what you receive
- How Much Does a Cost Segregation Study Cost? — Pricing breakdown by property type and value
- What Percentage Gets Reclassified? — Typical accelerated depreciation rates by property type
- Cost Segregation for Short-Term Rentals — The STR material participation strategy explained
Ready to See Your Actual Savings?
Want a number for a specific property here? Use the calculator — it’s pre-set with property-type defaults you can adjust to match your basis and tax bracket.