Introduction
Fredericksburg, a charming town in Texas Hill Country, is known for its wineries, German heritage, and vibrant tourism scene. It attracts a significant number of visitors year-round, making it an appealing market for short-term rental investors. Here, we break down the top-performing zip codes in Fredericksburg based on gross yield, annual revenue, and home values, along with insights into each area’s characteristics.
22405: Near Central Fredericksburg
- Gross Yield: 6%
- Annual Revenue: $26,566
- Zillow Home Value: $449.8K
Zip code 22405 encompasses parts of central Fredericksburg, which includes some of the historic and picturesque streets that are popular with tourists. The area’s gross yield of 6% is promising, backed by a substantial annual revenue of $26,566. With home values averaging around $449.8K, the properties here are relatively high in value, reflecting the desirability of being close to Fredericksburg’s main attractions, such as Main Street, museums, and local shops.
22407: West Fredericksburg
- Gross Yield: 6%
- Annual Revenue: $24,583
- Zillow Home Value: $441.5K
This zip code covers the western side of Fredericksburg, which features more spacious properties and often caters to travelers looking for a quieter, more residential experience. With a gross yield of 6% and an annual revenue of $24,583, it presents similar returns to zip code 22405 but with slightly lower home values, averaging $441.5K. The area’s proximity to popular wineries and scenic views of Texas Hill Country enhances its appeal to short-term renters.
22401: Downtown Fredericksburg
- Gross Yield: 5%
- Annual Revenue: $23,543
- Zillow Home Value: $455.7K
Zip code 22401 covers downtown Fredericksburg, an area known for its vibrant cultural scene, shopping, and fine dining. The gross yield of 5% is still competitive, given the central location and convenience it offers visitors. Annual revenue averages $23,543, making it an attractive area for investors seeking consistent demand. With Zillow home values around $455.7K, downtown properties are among the higher-priced options but come with the potential for strong occupancy rates.
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22408: South Fredericksburg
- Gross Yield: 2%
- Annual Revenue: $9,661
- Zillow Home Value: $426.2K
This zip code covers the southern parts of Fredericksburg, where properties are more suburban and set apart from the bustling town center. The gross yield here is lower at 2%, with annual revenue of $9,661. This makes it a less aggressive investment choice compared to central areas. However, it might suit investors focused on longer-term rental strategies or those looking to cater to niche markets, such as extended stays for remote workers or longer family vacations.
22406: North Fredericksburg
- Gross Yield: 1%
- Annual Revenue: $7,431
- Zillow Home Value: $546.6K
North Fredericksburg, represented by zip code 22406, covers areas that are more residential and less tourist-centric. With a gross yield of 1% and an annual revenue of $7,431, this zip code may not provide the same immediate returns as others but could be of interest for long-term property appreciation. Zillow home values here are higher, at $546.6K, which aligns with the spacious homes and quieter suburban lifestyle found in this part of Fredericksburg.
Conclusion
These zip codes reflect a variety of investment opportunities in Fredericksburg, ranging from downtown properties with higher demand to suburban areas that could serve different types of renters.
