South Central9.4% avg cap rate

South Padre Island, TX

Texas spring break capital — Rio Grande Valley STR market

South Padre Island is a 34-mile barrier island at the southern tip of Texas, best known as the premier spring break destination in the state and a growing family beach market. The island sees dramatic ADR spikes during spring break (March) and summer, with a more relaxed shoulder season. Low property prices relative to returns make it one of the higher cap rate coastal markets in the South.

9.4%
Avg Cap Rate
Net operating income / price
62%
Avg Occupancy
Annual average
$220
Avg Nightly Rate
All property types
$285K
Median Price
STR-viable properties

Estimated Annual Performance

Gross rental revenue
62% occ × $220/night
$49,786
Est. operating expenses
Mgmt, cleaning, supplies, insurance (~40%)
– $19,914
Est. net operating income
Before mortgage & depreciation
$29,872
At median price
Implied cap rate
10.5%

* Estimates based on market averages. Individual property performance varies. Always run a full underwriting analysis.

Why Investors Choose South Padre Island

Top spring break destination in Texas — massive March ADR spike
One of lowest barrier island entry prices on the Gulf Coast
Sea Turtle Inc. and birding tourism drive nature-minded visitors
Developing year-round market as snowbird infrastructure grows
Peak season: Mar (spring break), June – Aug (families)
Top property types: Condo, Beach House, Gulf-front Unit
Primary zip: 78597

Market averages, not guarantees. Cap rates, occupancy, and nightly rates are market-wide averages based on active STR listings and historical data. Individual property performance depends on location, amenities, management, and listing quality. Always run a full underwriting analysis before purchasing.

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