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Generally Investor friendly
STRs are allowed citywide without caps, with a clear online application and straightforward safety certifications. The $600 annual permit fee is moderate, but one‑hour response expectations and escalating fines for violations introduce compliance risk and moderate cost of doing business.
Local STR Agent
STR specialist · Horseshoe Bay, TX
Horseshoe Bay is a small resort city in the Texas Hill Country, sitting primarily in Llano County with a portion extending into Burnet County. The community has a year-round population of roughly 3,500 to 4,000 residents, swelling considerably on weekends and during the warmer months when visitors arrive to enjoy the lake. Known for its upscale residential enclaves, manicured golf fairways, and waterfront setting on the Highland Lakes chain, Horseshoe Bay has long served as a quiet retreat for Texans and out-of-state travelers seeking a slower pace. The city lies approximately 45 to 50 miles northwest of Austin and about 80 miles north of San Antonio, making it a convenient weekend escape from either major metro area and a natural gateway to the broader Hill Country.
The defining feature of the area is Lake Lyndon B. Johnson, a constant-level reservoir on the Colorado River that anchors Horseshoe Bay's identity. Because the lake is held steady by the dams downstream, it remains ideal for boating, waterskiing, paddleboarding, and fishing year-round, and the city's many private slips, marinas, and lakefront vacation homes reflect that draw. The shoreline curves around coves and limestone outcrops, giving the water a calm, almost lake-within-a-lake feel in places.
Just a few miles south of Horseshoe Bay sits Marble Falls, the largest nearby town and a useful complement to the resort atmosphere of the bay. The drive takes about 15 minutes along U.S. Highway 281, and visitors often head into town for its antique shops, casual Hill Country restaurants, the historic downtown bridge over the Colorado River, and the popular walk of lights along the lakefront during the holiday season. It functions as the practical service hub for the surrounding lake communities.
About 20 miles northwest of Horseshoe Bay, Longhorn Cavern State Park offers a completely different kind of Hill Country experience. The park is known for guided tours through a limestone cavern carved by an ancient underground river, with cool, steady temperatures inside making it a popular stop in summer. Above ground, the park includes short hiking trails, picnic areas, and a glimpse of the rugged Hill Country landscape.
Slightly closer, roughly 15 to 20 minutes east of Horseshoe Bay near the town of Burnet, Inks Lake State Park is a smaller, quieter alternative to the busier state parks further west. It is well regarded for its clear, swimmable water, kayak and canoe rentals, and a network of trails that wind through live oaks and granite hills. Together with Lake LBJ itself, these parks give the area a strong outdoor-recreation profile.
Horseshoe Bay's appeal for short-term rentals comes from the way it bundles these assets into a single, easy-to-reach package. The combination of lake access, resort amenities, Hill Country scenery, and proximity to both Austin and San Antonio gives the city a dependable mix of leisure and convenience, drawing families, golfers, and weekend travelers looking for an unhurried base in the heart of central Texas.