A lot of my buyers want a condo or home on South Padre Island they can enjoy themselves and rent out when they are not here. It can be a great investment, but the Island has its own rules for short-term rentals, and the HOA and insurance side can change your numbers. Here is what I walk every investor through before we write an offer.

1. You need a City short-term rental license

Any stay under 30 days on South Padre Island counts as a short-term rental, and the City requires a license for it. The license is renewed every year (currently $125). Your license number has to appear in every ad, including Airbnb, Vrbo and your own website.

2. You collect 17% hotel occupancy tax

Short-term rental guests pay hotel occupancy tax, and you are responsible for collecting and sending it in. On South Padre Island the total is 17%: 10.5% to the City, 6% to the State of Texas and 0.5% to Cameron County. City tax reports are due every month, even in a month with no bookings. Some booking platforms collect part of this for you, so ask your accountant how your platform handles it.

3. Someone has to answer the phone 24/7

The City requires a local contact who can respond within one hour, day or night. If you live out of town, that is usually a property manager. Build that cost into your budget from the start.

4. Read the HOA rules before you make an offer

Many condo associations on the Island have their own rental rules, and they can be stricter than the City's. Some set minimum stays, limit the number of guests or vehicles, or charge rental registration fees. Ask for the declaration, bylaws and rules early, and look at the HOA dues and reserves too. I wrote more about this in my post on buying in an HOA on South Padre Island.

5. Get insurance quotes during your option period

Insurance is one of the biggest costs of owning on the coast, so get real quotes before your option period ends. A few things to know:

  • Cameron County is a first-tier coastal county, so wind and hail coverage usually comes through the Texas Windstorm Insurance Association (TWIA).
  • TWIA uses a windstorm Certificate of Compliance (WPI-8) as proof a building is eligible. Ask the seller or HOA for it.
  • Flood is a separate policy. TWIA requires flood coverage for some properties in V flood zones built or remodeled after September 1, 2009, and most flood policies take 30 days to start.
  • For a condo, find out what the HOA master policy covers and what you need on your unit.
  • If you plan to rent nightly, tell your agent. A standard second-home policy may not cover rental use.

6. Know the stakes

The City takes these rules seriously. Fines can reach $2,000 per violation, and three citations in 12 months can cost you your license. Getting set up the right way from day one protects your investment.

Thinking about an Island investment?

I live on South Padre Island and help buyers find condos and homes that fit their rental plans, from Gulf-front towers to bayfront and canal homes. I can pull HOA rental rules, recent rental activity and insurance contacts for any property you are considering. Call or text me at (903) 879-2770, or browse South Padre Island homes and condos for sale.

You can also watch the quick video version of these rules on my YouTube channel.

For general information only. This is not legal, tax or insurance advice. Rules are current as of October 2026 and can change, so confirm with the City of South Padre Island, the Texas Department of Insurance and your own advisors. Sources: City of South Padre Island; Texas Department of Insurance; Texas Windstorm Insurance Association.

Lauren Hable, REALTOR®, Keller Williams Realty LRGV, 2200 Padre Blvd, South Padre Island, TX 78597. Each office is independently owned and operated. Equal Housing Opportunity.