Terrell Hills, Texas Short Term Rental Regulations Guide for Airbnb hosts

Executive Overview: STR Status in Terrell Hills

Short-term rentals are NOT explicitly permitted in Terrell Hills, Texas. According to city records, the Planning and Zoning Commission held a public hearing on June 25, 2020, specifically to discuss and act upon an ordinance that would prohibit short-term rental of residential property. While the outcome of this hearing is not available in the provided content, the explicit consideration of a prohibition ordinance indicates a restrictive regulatory environment for STR operators.

This finding is significant because it places Terrell Hills among Texas municipalities that have moved to limit or eliminate short-term rental operations within residential districts, particularly in contrast to more permissive environments like Houston.

What do Airbnb hosts actually earn in Terrell Hills?

Terrell Hills hosts earn a median $23,120/year with $134 ADR and 68% occupancy.

Top performers pull in $38,711+ per year.

See the full Terrell Hills market breakdown

How to Start a Short-Term Rental Business in Terrell Hills

Given the regulatory uncertainty identified in Terrell Hills, the pathway to establishing a short-term rental operation requires careful navigation and verification of current legal status:

Step 1: Regulatory Verification

Before any investment or operational planning, verify the current STR regulatory status by:

Contacting City Hall directly at (210) 824-7401
Reviewing the complete Code of Ordinances on the eCode360 platform (ecode360.com/TE6605)
Consulting with city planning staff to confirm whether the 2020 prohibition ordinance was adopted and remains in effect

Step 2: Legal Consultation

Given the complexity of municipal regulations, engage qualified legal counsel experienced in Texas property law and municipal regulations to:

Review the complete text of any adopted STR prohibition ordinance
Assess potential legal challenges or exemptions
Evaluate constitutional property rights implications

Step 3: Alternative Investment Considerations

If STR operations are prohibited, consider:

Converting to long-term residential rental (12+ month leases)
Purchasing property in neighboring municipalities with permissive STR regulations
Exploring commercial zoning districts within Terrell Hills for potential STR operations

Required Documents, Permits, Licenses, and Guidelines

Current Unknown Status

The specific documentation requirements cannot be definitively determined from available records. However, standard requirements in comparable Texas municipalities typically include:

If STRs Are Prohibited:

No STR-specific permits or licenses would be available
Traditional rental property documentation (lease agreements, property management agreements) would still be required

If Limited STR Operations Are Permitted (hypothetical):

City business registration or STR permit
State hotel occupancy tax registration
Fire and safety inspection certificates
Property insurance documentation
Proof of ownership or property management authorization

Standard Property Documentation (Always Required):

Property deed or purchase documentation
Property insurance policies
Texas property tax records
Municipal utility accounts

Specific Regulations for Short-Term Rentals

City-Level Regulations (Terrell Hills)

Based on available records, Terrell Hills was actively considering STR prohibition as of June 2020. The Planning & Zoning Commission agenda specifically referenced:

Amendment to Chapter 14 - Zoning, Section III - Zone Districts A & A-1 Residential Districts
Addition of Subsection "B" prohibiting short-term rental use of residential properties
Definition of "short-term rental" for regulatory clarity

County-Level Regulations (Bexar County)

No specific Bexar County STR regulations were identified in the provided content. As a home rule city, Terrell Hills likely maintains primary regulatory authority within its municipal boundaries.

State-Level Regulations (Texas)

Texas maintains a permissive approach to municipal STR regulation. Key state-level considerations include:

Hotel Occupancy Tax Requirements

State hotel occupancy tax rate: 6%
Local hotel occupancy taxes vary by municipality
Registration required through Texas Comptroller's office
Monthly or quarterly remittance obligations

Property Rights Considerations

Municipal authority to regulate land use and zoning
Ongoing legal challenges to restrictive STR ordinances across Texas
Property owner rights balanced against community concerns

Contact Information for Local Authority

City of Terrell Hills - Primary Contacts

City Hall - Main Administration

Address: 5100 N New Braunfels Ave, San Antonio, Texas 78209
Phone: (210) 824-7401
Fax: (210) 822-2297
Administrative Hours: Monday - Friday, 8:00 AM - 5:00 PM
Website: www.terrell-hills.com/

Police & Fire Dispatch (Emergency/Urgent Matters)

Phone: (210) 824-1009

Planning & Zoning Department

Contact through City Hall main number
Address: 5100 N New Braunfels Ave, San Antonio, Texas 78209

City Manager

William Foley (as referenced in June 2020 agenda)
Contact through City Hall main number

State-Level Resources

Texas Comptroller - Hotel Occupancy Tax

Website: comptroller.texas.gov/taxes/hotel/
Phone: 1-800-252-1386

Important Links to Source Pages

Primary Regulatory Sources:

City of Terrell Hills Code of Ordinances - ecode360.com/TE6605
Terrell Hills City Website - www.terrell-hills.com/
Terrell Hills Planning & Zoning Meeting Minutes/Agendas - Available through city website or direct request

State-Level Resources:

Texas Comptroller Hotel Occupancy Tax Information - comptroller.texas.gov/taxes/hotel/
Texas Hotel & Lodging Association STR Resources - texaslodging.com/

Legal and Regulatory Analysis:

Short-Term Rental Regulatory Overview (Texas-specific) - Available through legal counsel specializing in municipal regulations

Critical Next Steps for STR Investors

Immediate Action Required: Contact City Hall directly to confirm current STR regulatory status and obtain definitive guidance on permissible rental operations.
Legal Review: Engage qualified legal counsel to review any adopted ordinances and assess investment risk.
Alternative Markets: Research neighboring municipalities (Alamo Heights, San Antonio proper, Windcrest) that may have more permissive STR regulations while maintaining proximity to Terrell Hills area amenities.
Market Analysis: Evaluate long-term rental demand in the immediate area as an alternative investment strategy if STR operations remain prohibited.

Disclaimer: This guide is based solely on the provided source materials. Municipal regulations can change rapidly, and investors should verify all information through official city channels before making investment decisions. The restrictive regulatory environment suggested by the 2020 Planning & Zoning Commission activities may require complete avoidance of STR investment in Terrell Hills or significant operational modifications to comply with local ordinances.

Next step

Found a property in Terrell Hills?

Paste any address and get estimated revenue, cash-on-cash return, and comparable STR performance in under 5 minutes. 3 free analyses per day.

Ask the AI Advisor about Terrell Hills

Terrell is a city in Kaufman County, Texas, situated in the rolling prairie landscape of the northeastern part of the state. With a population of approximately 18,000, it has the feel of a small Texas town that has grown in step with the expanding Dallas–Fort Worth metroplex. The city sits about 30 miles east of Dallas along the Interstate 20 corridor, giving it both rural character and quick access to one of the country's largest metropolitan areas. Terrell is perhaps best known regionally for its outlet shopping and as a convenient stop for travelers heading deeper into East Texas.

Tanger Outlets Terrell is the city's signature attraction, a sprawling open-air complex of brand-name stores and designer retailers just off I-20. It draws day-trippers and weekend shoppers from across North Texas, with the kind of selection that can keep visitors browsing for hours. Because the outlets are a destination unto themselves, the surrounding hotels and short-term rentals see a steady flow of guests year-round, especially around holidays and seasonal sales.

The No. 1 British Flying Training School Museum offers a quieter but no less compelling experience, located on the grounds of the Terrell Municipal Airport. During World War II, this site trained Royal Air Force pilots, and the museum preserves that story through photographs, uniforms, artifacts, and a small collection of vintage aircraft. It provides a distinctive slice of Texas and wartime history that visitors are unlikely to find elsewhere in the region.

A short drive east of Terrell, the small city of Canton hosts First Monday Trade Days, one of the largest open-air markets in the United States. Held on the weekend preceding the first Monday of each month, the market sprawls across hundreds of acres and draws tens of thousands of shoppers in search of antiques, handmade goods, and livestock. Travelers who use Terrell as an overnight base can make the roughly 30-minute drive to Canton, enjoy a full day of browsing, and return to quieter accommodations by evening.

With its position on a major interstate, its mix of small-town charm and metro-adjacent convenience, and a steady stream of visitors drawn by shopping, history, and nearby regional events, Terrell offers short-term rental owners a balanced opportunity. Guests can enjoy the slower pace of Kaufman County while staying within easy reach of Dallas and the wider attractions of East Texas, making the city an inviting base for a wide range of travelers.