I regularly have friends and clients who are considering purchasing Austin rental properties because they want to do a short term rental (STR). They usually know someone who is cash cow banking it on their STR and they want some of the action. Not so fast. There are some real limitations, an ordinance, on what you can and cannot do.
The rules and permitting depends on if it is your homestead (you live in the home most of the time) or if it is a full-on rental. Rules and available permits vary from neighborhood to zip code to HOA, what you can or cannot do. The biggest issues range from permits and code enforcement to being a good neighbor.
On the good neighbor topic, read any article on Austin short term rentals, especially those in trendy central neighborhoods, and you’ll hear a story about a bachelor or bachelorette party that … well, let’s just say the neighbors are not happy.
The Austin American Statesman recently published a couple articles on the topic and I’m going to put them down right here for an easy reference for my next friend / client exploring the idea.
Short-term rental owners fight city’s rules: Austin’s rental limits face growing pushback on multiple fronts.
Here is an FAQ link to the Austin STR Code: Code FAQ
Airbnb even gives you a heads up on listing your Austin property: Airbnb
I have friends in 78704 who rent their walk-to-Zilker-park home a couple times a year during ACL Fest and SXSW and it pretty much pays their property taxes every year. They just plan a really nice vacation at that time every year and lock up their valuables and probably warn their neighbors.
I also have a friend in Toronto who does STR on her basement unit (it’s a Toronto thing) and it pays her mortgage and she gets to meet a lot of really nice people.
But when you have an investment property and it is your intention to do STR all the time, do your homework before you close on that expensive thing you believe will be a cash cow because it’s possible that your STR permit may never materialize.