A couple of questions on the San Antonio market

[Brett Merrell]

I am looking at buying relatively new (2020+) multifamily (duplex/fourplex) in San Antonio.  I don't know the market well.  Can you give me insights into the following questions:

1) What areas are growing in SA?  What area would be best for investing in duplex/fourplex properties?

2) Is SA overbuilt?   Has the market absorbed the '23-'24 new construction?

3) What is the vacancy in SA?  I see a wide variety of data re SA vacancies.  Some say SA has one of the highest vacancy rates in the U.S., others say SA is 6-7% vacancy?

4) How do duplex/fourplex compare to apartments in SA?  Do they generate higher rent rates than apartments?

5) Any multifamily builders you suggest in SA...any to avoid?  One of the factors that draws me to SA is that many builders offer financing of 3.5-4.0%  The rates are great but I also want to get a well built property

Thank you for your input.

[Lisa Choi]

Good morning Brett!

I’m a real estate agent here in San Antonio who works with investors looking to expand their portfolios, so I can definitely provide some insights.

1) Growing Areas & Best Spots for Duplexes/Fourplexes

San Antonio continues to grow, with strong demand in several key areas:

• Far West Side (Alamo Ranch, Westover Hills) – A rapidly expanding area with new developments and strong rental demand.
• Northwest (Near UTSA, Medical Center, Helotes) – Great for student and medical professional tenants, with solid appreciation.
• Southside (Brooks City Base, Mission District) – Historically overlooked but seeing major revitalization and infrastructure investment.
• Northeast (Schertz, Cibolo, Converse) – Military-driven demand due to Randolph AFB, plus solid suburban growth.

For duplexes and fourplexes, the Northwest and Northeast corridors tend to offer strong rental demand and appreciation potential.

2) Is SA Overbuilt? Has New Construction Been Absorbed?

San Antonio has seen a surge in new multifamily construction, but demand remains strong. The market has been absorbing units, but some areas (especially luxury apartments) are seeing higher vacancies due to overbuilding. For duplexes/fourplexes, demand remains steady, as many renters still prefer smaller-scale living over large apartment complexes.

3) Vacancy Rates in SA

Vacancy rates in SA vary widely depending on property type and location.

• Citywide vacancy sits around 6-7% on average, though some data sources cite higher numbers for certain apartment submarkets.
• Smaller multifamily (duplexes/fourplexes) tend to have lower vacancies than large apartment complexes since tenants often seek a more residential feel.
• Areas with higher new construction (Far West, Far North) may have more competition, increasing vacancy risks.

4) Duplex/Fourplex vs. Apartments – Rental Rates

• Duplexes and fourplexes often command higher per-unit rents than apartments since they typically offer more space, privacy, and fewer shared amenities.
• Many tenants prefer a home-like feel with private garages and yards, which can allow for premium pricing.
• That said, apartments can sometimes have economies of scale that make management easier, but it depends on your investment goals.

5) Multifamily Builders to Consider (and Avoid)

There are several solid builders in SA focusing on small multifamily:

• Builders to consider: Look into Lennar, DR Horton (MultiGen product), and local boutique builders specializing in duplexes/fourplexes. Some also offer great financing incentives.
• Builders to be cautious of: Some smaller, lesser-known builders cut corners on materials and finishes—due diligence is key. Always check builder reputation, online reviews, and visit completed projects before committing.

Bonus: Builder Financing at 3.5-4.0%

Yes, many builders are offering aggressive financing to move inventory. This can be a great way to lock in a lower rate, but make sure the price, location, and construction quality justify the purchase—not just the financing deal.

Would be happy to chat further if you need more specifics! Hope this helps.