If you're looking for a great opportunity to invest in the Austin market, owning a short term rental may be the answer for you. You can expect to make around three times what you could with a long term rental by renting your home out as a vacation rental.  However,  in order to take advantage of investing in a STR, you need a thorough understanding of the rules and regulations regarding short term rentals (STRs).  They vary immensely throughout central Texas, and the success or legality of your investment property rests on understanding these various rules. 

No matter where you are looking to purchase, it's important to understand that STRs are generally classified as rentals less than 30 days.  If you are planning to rent your home out monthly or for even longer durations there are far less rules.  If you are planning to use your property as a vacation rental where guests stay for a few days or weeks, this post is for you!

Texas leaves short term rental oversight to the local government.  Thus, STR rules, regulations or ordinances are predominantly created by local municipalities.  If a property is located in an unincorporated area or an extraterritorial jurisdiction, it's highly unlikely that there will be municipal regulations since there is no city that has the authority to regulate the area.

Within the city limits of Austin, the regulations regarding short term rentals are pretty strict.  They have a comprehensive permitting process and caps on the number of short term rentals allowed.  In fact, in the City of Austin, it's almost impossible to get a permit to operate a short term rental for a single family home if it's not your primary residence.

However, a plethora of nearby Austin suburbs have no STR rules at all, and there are unincorporated areas that aren't subject to any municipal oversight!  Dive into the list below to know what the regulations are like throughout central Texas.

Austin: 

• the City of Austin breaks down short term rentals into three types, Type 1 (owner-occupant), Type 2 (investor-owned), Type 3 (multi-family)
  
• STR Type 1  permits can be issued for single family homes where the owner has a homestead exemption on the subject property. These permits are used when you live in the home, and want to rent out the entire home from time to time, OR if you only want to rent out part of the home ie. a room or guest house on the property.
  
• STR Type 2 permits are for non-owner occupant, full-time investment use short term rentals.  A federal court ruling reversed the previous limitations of the City of Austin's ordinance which essentially prohibited Type 2 permits.  As of August of 2023, the City of Austin is issuing Type 2 investor permits!
  
• STR Type 3 permits are for units in multi-family properties.  Apartments, condos, and fourplexes are all considered multi-family properties.  There are caps on the number of STRs allowed in each multi-family building. If the building is located in a residentially zoned area the maximum number of units that can have a Type 3 permit is 3% of the total units in the building. For buildings located in commercially zoned areas, the max number of STR Type 3 permits available is 25% of the total units in the building.
  
• Duplexes constructed after December 7th, 2023 and two-unit residential properties constructed after October 1st, 2015 are subject to the following restriction: only one unit may be used as a short term rental for more than 30 days in a calendar year. 
  
• Link to more info on COA regulations
  

Bee Cave:

• no restrictions on STRs

Boerne:

• Permit required for properties in the city limits and Boerne ETJ
• Link to full ordinance

Buda:

• permit required
• ​must demonstrate to the satisfaction of the Director of Planning that the unit and property do not have any outstanding issues related to taxes or building, electrical, plumbing, fire, health, housing, police, planning, noise, or code enforcement provisions
• must provide proof of insurance and payment of hotel occupancy tax annually
• ​Full details on page 51 of Buda’s Unified Development Code

Cedar Park:

• no restrictions on STRs

Dripping Springs:

• no restrictions on STRs

Driftwood:

• Driftwood is an unincorporated area, thus there are no restrictions on STRs

Fredericksburg:

• permit required
• STR's allowed in some zoning districts but not all, short term rental use is based on property zoning and type of STR i.e owner occupied, non-owner occupied, accessory building, etc. link to zoning map
• Properties that received a STR Permit prior to April 1, 2022 are considered “Legal Non-Conforming” uses and allowed to operate conditioned upon conformity with Section 5.401 and Section 6.110, Continuance of a Nonconforming Use
• Generally, permits may be transfered to new owners, a new owner must submit a transfer of permit application
• Click here to view the UPDATED complete STR ordinance

Georgetown:

• no restrictions on STRs

Horseshoe Bay:

• No regulations yet, but a short term rental ordinance was discussed at the council meeting in November 2022
• no restrictions on STRs within Horseshoe Bay Property Owners’ Association
• some properties are in additional HOAs and those may restrict STR use

Johnson City:

• permits required for properties located in the city limits or ETJ
• Link to complete ordinance

Jonestown:

• ​STRs are only permitted in the STR Overlay District
• events are not permitted on site
• residence may not house more than 15 people at a time
• Link to more details

Kyle:

• no restrictions on STRs

Lago Vista:

• must apply for an STR permit if the property is located in any of the following zoning districts: R-1, R-O, RR-A, R-2
• link to zoning map
• STRs must have two parking spots per dwelling, no street parking
• Link to more details

Lakeway:

• maximum of 25 single family homes can be used as STRs
• currently, there is a 2 year waiting list to get a permit
• there's no limit for permits for condos
• Link to STR map

Leander:

• According to city officials, vacation rentals are currently classified as hotels within the City of Leander. You will need to ensure that you have the correct zoning (General Commercial) before operating a vacation rental. Because these are considered a commercial business, the rental would be subject to commercial building standards and permits.
• The City of Leander constitutes a short term rental as anything less than 6 months.
• Leander is generally unfriendly towards STRs at the current moment; however Leander has no official STR rules currently
• In May of 2023, they discussed creating rules and regulations, you can see the slides from the City of Leander Short Term Rental Briefing Workshop here

Lockhart:

• STR registration required for all properties located in a residential zoning district
• No more than 2 adults per bedroom permitted
• Link to full Lockhart STR ordinance

Marble Falls:

• In January of 2021, Marble Falls adopted a short term rental ordinance. This ordinance requires all STR operators to obtain a permit from the city in order to operate as a vacation rental. In order to obtain a permit, owners must demonstrate proof of liability insurance, document payment of hotel occupancy tax, and pass a life safety inspection among other requirements.
• The complete rules can be found here

New Braunfels:

• short term rentals are not allowed in any residential zoning districts
• ​a special use permit must be obtained for all properties located in non-residential zoning districts, except those located in the following zoning districts: C-4, C-4A, and C-4B
• short-term rentals are not allowed in the floodway
• annual life safety inspections are required
• ​maximum occupancy of two adults per sleeping area, plus an additional two occupants
• ​a minimum of one off-street parking space, not including the garage, must be provided per sleeping area
• Link to complete ordinance

Pflugerville:

• no regulations, but lots of HOAS with rules regarding STRs​

Point Venture:

• STRS permitted in most sections except they're not allowed in Section 3-1
• permit is required
• owners must provide guests with important operation information such as emergency contacts, location of water shut off, parking requirements, trash collection, etc.
• view the complete STR ordinance for Point Venture

Rollingwood:

• STRs prohibited
• no rentals less than 30 days

Round Rock:

• no restrictions on STRs

San Marcos:

• Home Share Rental Registration required
• ​Proof that the premises is the primary residence of the applicant, including at least two of the following: motor vehicle registration, driver's license, Texas State Identification card, voter registration, tax documents, or utility bill
• Only permits one STR/owner in city limits
• Occupancy limits
• Required safety features
• Link to more details

Sunrise Beach:

• not permitted

Sunset Valley:

• permit required
• no limitations based on owner-occupancy
• Link to full Sunset Valley Short Term Rental Requirements

Spicewood:

• no restrictions on STRs​

The Hills:

• no restrictions on STRs​
• There are extensive HOA rules you must follow.  Link to more details.

Volente:

• must apply for a short term rental conditional use permit
• maximum number of guests is 2 people, over the age of 16, per bedroom +3
• $150 permit fee, permit is non-transferable with a sale
• Village of Volente short term rental ordinance

Westlake Hills:

• The following criteria pertains to properties zoned R-1, R-2, and R-3
• ​only a homestead owner may apply for a short-term rental special use permit, but may do so for the homestead or another property owned by the homestead owner
• only one permit will be issued per homestead, regardless of whether the permit is for the homestead or another property owned by the homestead owner
• essentially you must own a primary residence in Westlake in order to get an STR permit, but if you own two homes in Westlake, you can get a permit for the one you don't live in
• a guesthouse can not be used as a short term rental
• Link to more details and link to Westlake Hills STR map

Wimberly:
To obtain a permit to operate a bed & breakfast or vacation rental, an applicant must go through the Conditional Use Permit (CUP) process and receive an approved permit.
The CUP process includes:

• complete Application
• application Fee (non-refundable)
• the city notifies those within 200’ of your application, publishes in the local newspaper and posts a sign on the subject tract
• Planning & Zoning hearing for recommendation and City Council hearing for ultimate decision

Per state & local statute, if 20% of property owners within 200' oppose the application a super majority vote of the City Council (4 out of 5)  is required for CUP approval.


​*****We do our best to provide accurate information; however, these rules and regulations are constantly evolving.  Make sure to confirm current rules with the local governing bodies. This post was last updated on 2/14/2024***

***PS IF YOU LIKE THIS CONTENT AND INTEND TO COPY IT, PLEASE REACH OUT FIRST OR AT LEAST INCLUDE A BACKLINK TO THIS SITE***


Interested in purchasing a property to use as a short term rental in the Austin area?

We can help you navigate the various rules and regulations, identify options that will make the most sense for your unique situation and guide you in determining which properties will yield the highest returns. 

Happy 4th of July weekend! Need some fun and exciting ideas to celebrate this year in the ATX? We've rounded up a view great options to check out if you don't already have plans for this holiday weekend.

Live Fireworks and a Movie at Doc’s Drive in Theater:
With FIREWORKS before the movie, live music, as well as a wide variety of food and drinks, Doc's Drive in is a great option for anyone looking to have a good time!  They will have two simultaneous showings on both the 3rd and the 4th.  You can catch The Sandlot on Screen 1 or Independence Day on Screen 2. 

July 3rd and 4th
Live Music 7-9PM
Live Fireworks Show 9pm
Movies 9:30pm


1540 Satterwhite Road
Buda, TX 78610

Get more information and buy your tickets HERE

4th of July Blues, Brews, & BBQ with The Larry Harris Band:
No cover, all ages are welcome, and dog friendly.  Celebrate the 4th of July with live music, BBQ food, and some refreshing draft beers at Oakwood BBQ & Beer Garden.

July 4th from 11AM-8PM

307 E. Braker Lane
Austin, TX 78753
​
Get more information HERE.

HEB Austin Symphony July 4th Concert and Fireworks:
Enjoy spectacular fireworks and some live music from the Austin Symphony at this free event.

Sunday, July 4th at 8:00 pm

900 W Riverside Drive
Austin, TX 78704

More information HERE.

​Red, White, and Boom 4th of July Festival:
​Visit Typhoon Texas for wild water rides, live music, contests, fireworks, and a hot air balloon ride.

July 2nd, 3rd and 4th 10:30 am - 7:00 pm
​
18500 Texas 130 Service Road
Pflugerville, TX 78660
​
Purchase tickets HERE.

​The greater Austin area continues to break records in the month of May. Austin saw an all time high for median home prices for any month on record. The recorded median single family home value for the entire greater Austin area last month topped the charts at a whopping $465,000.

We are at a challenging time currently. There is simply not enough land in Austin to meet buyer demand. As businesses come in, so do residents and this is causing single family home prices to sky rocket. Austin is now experiencing a critical shortage of inventory and we must think about new ways to expand and creative policies to increase our housing supply over the long run.

​Residential home sales in the Austin Round-Rock MSA aka the entire greater Austin area have seen an increase of 48% year over year to 3,976 sales for the month of May. As you may imagine, the median sales price also jumped 42.2% year over year. That is a full $100k higher than in January of this year. Monthly housing inventory decreased 1.5 months to 0.5 months of inventory. This is critically low; a balanced market has 6 months of inventory.

In May, active listings dropped 70.9% year over year to 1,739 listings, this shows how quickly homes are going under contract. Homes spent an average of 16 days on market last month across the MSA. However, keep in mind this is an average. A lot of homes spent far fewer days on market. 
​
Increases in Median Home Sales Price per County:
City of Austin - 34.9% year over year to $566,500
Travis County - 41% year over year to $550,000
Williamson County - 50% year over year to $435,000
Hays County - 42.5% year over year to $380,000
Bastrop County - 24% year over year to $321,250
Caldwell County - 26.9% year over year to $239,900

Curious to know what’s happening in your zip code? Contact me for more information!

With summer approaching, who wouldn't want to be out there by the water and enjoying life? Texas summers are no joke! Maybe you want to get out in the kayak, go paddle boarding, or take the boat out for a spin. Those all sound like a perfect summer day to me. however, it can be somewhat tricky finding a spot to get that boat unloaded and into the water. 

​I've mapped out some public boat ramps and a few homes for sale near the lakes. Let us know how we can help you find your perfect property to get you out there and living your best life.

If you’ve been keeping an eye on the Austin real estate market lately, you’ve surely heard that the ATX has become one of, if not the most, competitive markets for home buyers in 2021.  You’ve probably heard about homes flying off the market at record speeds, selling for hundred of thousands of dollars over asking price, and new builders only being able to sign 1 or 2 contracts a month for homes that won’t even be completed until 2022.  However, something you may not have heard about yet is the subtle shift in the Austin real estate market over the past two weeks.  I’ve seen homes sell for asking price, homes that only had a few offers, and the return of due diligence periods.

This shift is subtle, and if you are not actively working in it everyday, you may not even notice it. But I feel it, and if it continues, it will have implications. You may be wondering why this may be.  All of the signs point towards continued demand and thus higher prices. And, that is still true, but the market is behaving slightly differently. I hypothesize this subtle shift is due to a few different variables.

Many individuals looking to purchase in the Austin market are quite simply beginning to feel defeated.  I have a few buyers who have been trying to buy a home for the past few months, and are still empty handed.  They’ve offered well over asking price, waived their appraisal contingencies, and offered 5 digit earnest money deposits yet they still haven’t been able to get an accepted contract.  After the 4th or 5th time of this, some buyers begin to feel like they simply cannot win in this ultra-competitive market.  Some of these buyers decide to stop trying altogether, or opt to purchase in another city altogether.  Others are still observing from afar, but are less motivated to make offers on available homes.

In order to determine an appropriate asking price for a home, you need to look at the sold prices for comparable homes.  Since the home sale cycle from list date to close date is usually around 30 days, sold stats are constantly lagging behind the market.  Over the past few months, most homes have been appropriately listed at prices determined by the sold comparable homes.  However, the majority of those homes went under-contract at a price far higher than the asking price.  We are now beginning to see those homes close, and new listings are being priced using those sold stats.

​For single-family homes listed in the Austin MLS, the median list price/sqft increased from $197/sqft in February to $213/sqft in March. As listing prices are increasing, I foresee this leveling out the difference between asking price and contract price.  This is not to say that the majority of homes will not continue to sell for above asking price.  I think that trend will continue, but I think we will see the difference between asking price and sold price decrease. Earlier this year we saw some homes selling for hundred of thousands of dollars over asking price; I foresee the ratio of list price to close price decreasing in the coming months.

The February storms caused a serious strain on an already tight supply of inventory in the Austin market.  Some homeowners that planned to list in February were forced to wait to list due to unexpected repairs as a result of storm damage.  Others simply decided to wait to list, since the city was essentially shut own for an entire week.  In February, we had 2,360 new single-family residential home listings in the Austin MLS.  In March, we had 3,745 new single-family homes hit the market. Historically, we see the largest inventory increases in the Austin real estate market between March through July.  So far, the number of new listings in 2021 has been lower than what we saw last year (even with the pandemic). However, it looks like the  trend for increased listings in the spring to summer months will continue for 2021.

This subtle shift should benefit those looking to purchase in the Austin market.  Home prices likely will continue to be the highest they have ever been, BUT as sold comps catch up to the true market it will be easier for buyers to purchase homes.  Appraisal waivers (essentially agreeing to purchase the home no matter what it appraises for and agreeing to bring the difference between the appraised value and the offer price in cash to closing) were almost mandatory over the past few months.  This made it nearly impossible for someone without a ton of extra liquidity to compete in multiple offer situations.  It was particularly detrimental to those buyers looking to purchase a home using a VA or FHA loan as these loan programs expressly prohibit the use of the Appraisal Waiver Addendum.  Now that we are beginning to see the new market sales data, homes are more likely to appraise at or closer to offer prices.  This has huge implications for any buyer using a loan to purchase a home.

For someone considering selling their home in Austin in the near future, you can still expect your home to sell for top dollar.  In fact, you will likely get more for your home in the coming months than if you had listed your home for sale in the first quarter of 2021.  However, you may not get all of the other offer terms that many home sellers received earlier this year.  We saw home sellers receiving offers where the buyer incentivized the seller with a complimentary lease back.  Sometimes, the buyer offered for the seller to stay in their home for an entire year for free after the buyers purchased the home.  These will likely become more conservative or dissipate entirely.  You also may see the re-emergence of typical seller expenses such as the title policy, and buyers may begin requesting a seller paid for home warranty again.  All in all, these nominal expenses will not adversely affect your bottom line. You can expect to still sell your home for the highest price, but you may arrive there with fewer offers and more buyer preference in regards to offer terms.

If you have questions about the Austin real estate market, or need advice when contemplating your next move, contact me.

One great aspect of Austin is that it is home to two lakes.  Lake Travis and Lake Austin are both technically dammed portions of the Colorado River.  Lake Austin is a narrower meandering constant-level lake while Lake Travis is much larger and deeper, but it is subject to varying lake levels.  Both lakes offer ample opportunities for recreation.  If you are ready to enjoy the lake life in Austin, but not quite ready to plunge into buying a waterfront property, you may want to consider one of these communities which offer boat ramp access to residents. Purchasing a property in a community with lake access guarantees that you will be able to get out on the water with ease, and avoid the crowds at the public boat launches.  There are numerous great communities in Austin which offer residents access to Lake Travis or Lake Austin.  Here are some Austin communities with lake access you may want to consider.

Apache Shores

Apache Shores is located off RR 620 in the acclaimed Lake Travis Independent School District.  The community offers a diverse array of property types, and residents enjoy access to a number of amenities including a community boat launch.  There are also several boat docks available for day use as well as a large area with picnic tables and grills where you can relax after a long day on the lake.   Other community amenities include a pool, tennis and basketball courts, children’s park with a playscape, and a disc-golf course.

Cuernavaca

Cuernavaca is located off Bee Cave Road between 360 and 71 in the exemplary Eanes ISD. Cuernavaca has a voluntary HOA.  Membership in Cuernavaca’s Lake Hills Community Association grants members access to the community pool, private boat launch and a waterfront park.

Lake Pointe

Lake Point is located 12 miles from downtown Austin off Bee Cave Rd in Lake Travis ISD. Residents of Lake Pointe enjoy access to a waterfront park and day docks. Unfortunately, there are no motorized boat launches in Lake Pointe.  Community amenities include pools, golf courses, and trails. Also enjoyable is the short journey to the Hill Country Galleria and all of the retail opportunities that entails. 

Greenshores

Greenshores is located in the Austin ISD. Locals enjoy access to a private park on Lake Austin with a boat ramp.

Rough Hollow

Rough Hollow is located off 71 just west of Lakeway. Residents have access to an array of amenities, including the Yacht Club & Marina which offers complimentary paddleboards and kayaks, a fitness center, a water themed village, and 22 miles of hike and bike trails.

Tessera On Lake Travis

Tessera On Lake Travis is located in Lago Vista in the Lago Vista ISD. Amenities include a private boat launch, gorgeous pool, exquisite hiking and bike trails, and over a mile of shoreline.

Lago Vista POA

Lago Vista is located on the Northshore of Lake Travis. Residents enjoy access to boat ramps, lakefront parks, golfing, tennis courts and more all nearby.  Residents also enjoy community exercise facilities, pickel ball courts, a small airport & much more.

Lakeshore Ranch

Lakeshore Ranch is located in the Lago Vista ISD, sitting on the Lake Travis shoreline. Lakeshore Ranch has a private HOA waterfront park with a boat ramp. Residents enjoy easy access to the Balcones Canyonlands National Wildlife Refuge, prime shopping, nearby trails, zip-lining, and fantastic restaurants.

Laguna Vista

Located in the town of Spicewood, homes in Laguna Vista also feed to Lake Travis ISD. Residents love the private community boat ramp, swimming, fishing, and living an outdoors life.

Paleface Ranch

Paleface Ranch is located west on Highway 71 in the Lake Travis ISD. Residents enjoy access to a community boat launch.  This neighborhood is located on the Pedernales River arm of Lake Travis so it may go dry when we are experiencing extreme droughts.

Bee Creek Estates

Bee Creek Estates is located off of Highway 71 in the Lake Travis ISD. Only a short drive from the Hill Country Galleria. Locals enjoy the private park with a boat ramp for lake activities and nearby golf courses, and wineries.

Naumanns Camp

Naumanns Camp is a small community located in Spicewood, on the northern side of the Pedernales River. Lot sizes ranging from 0.5-5 acres. Naumanns Camps feeds to Marble Falls ISD. 

Paleface Homesteads

Paleface Homesteads is located just north of Pedernales River in the Marble Falls ISD. Locals enjoy golfing at Pedernales Golf Club, owned by Willie Nelson. You can also find comfort at Spicewoods Vineyards and Gaucho Winery.

It’s been over a year since our beautiful world shut down. We said goodbye to large weddings, parties, the nightlife, concerts, theaters, and so much more. Who’s ready to have fun again? I know I am! Let's take a look at some fun activities in Austin, TX to make you feel like you're living your best life again.

The Barton Creek Greenbelt is located in South Austin and stretches over 12 miles of land. The Barton Creek Greenbelt is known for its beautiful hiking trails, swimming spots, biking, rock climbing, and is an overall great way to spend a day in the outdoors. Read my full Insider's Guide to the Greenbelt here.

This interactive museum gives you a fun way to enjoy numerous exquisite works of art! Snap countless photos and make sure you post them on Instagram for all of your friends to see. This is a museum for all ages to enjoy. Bring your kids, bring a date, bring Bob from 2 houses down. You will enjoy the day and see many pieces that will open your mind to exploring places you never thought possible. Learn more here.

Feel like dipping your feet in the water? Head over to Rowing Dock where you can select from kayaks, canoes, and paddleboards to experience Ladybird Lake like a true Austinite. Located at 2418 Stratford Dr, Austin, TX 78746, the Rowing Dock is open daily from 9AM-8PM. What are you waiting for? Bring your friends, come alone, or load up the family and head over now! Learn more here. ​

Enjoy the fun boutiques, eat at some delicious restaurants, view the street art, and enjoy what only Austin can bring you. Try on some crazy costumes at Lucy In Disguise With Diamonds, Have a yummy cone at Amy’s Ice Cream, stop in at Hotel San Jose for some amazing frosé, and don’t forget to snap a pic at the famous “I love you so much” mural at Jo’s Coffee.  There's also an entire new section known as Music Lane which has some great restaurants and new shops to explore too!

If you’re trying to purchase a home in the Austin area right now, you know it’s nuts out there.  It makes finding toilet paper in April of 2020 look like a piece of cake.  Securing that coveted PS5 last month - a walk in the park compared to buying an Austin home.  Needless to say, it’s a challenge.  I like challenges and if you do too, keep reading to learn how you can buy a home in Austin right now.

Appease The Sellers
Sellers in Austin obviously have the upper hand right now, so you need to do everything you can to make sure they like you and your offer.  Find out what makes them tick, what terms they will find most favorable, and how you can win them over.  This may involve some deep cyber stalking.  After you learn that seller Mary has been pinning recipes for banana bread you could deliver your offer with a loaf of MeMa’s famous bread and  even include her secret recipe.  Or, you may just be able to ask what the seller's plan is in order to craft an offer that is most appealing to their needs and timeline. If the home is vacant, they probably want to close as soon as possible.  However, if the sellers still live in their home, they may favor a closing date that is farther out or a lease back for a few months so they have enough time to find a new home. Sellers know that the market is in their favor right now, so many have already outlined the terms they find most favorable before their home even hits the MLS.  Make sure to inquire as to what these are so that you can draft an offer to match.


Pay Cash
Cash offers always rank favorably among home sellers.  When a purchaser is paying cash they can close quickly and there’s no potential for a contract falling apart due to issues with funding.  In today’s omnipresent multiple offer situations, cash offers are becoming quite popular.  If you can pay cash for a home, offer cash!  You can always finance after you purchase the home.  Don’t have a few hundred grand under your mattress?  Just sell your first born child.  Rob a bank or perhaps it’s time you start trying your luck with the Powerball. I hear there’s a jackpot of $970 million up for grabs tomorrow night.  With that kind of payout you may be able to secure more than one house in the Austin market! 

All jokes aside, there are ways you can leverage yourself to place an all cash offer on a home.  You may be able to get a secured loan that uses your investments in stocks as collateral or perhaps you have a wealthy relative that will make you a personal loan.  If you need to sell your current home before you can buy a new one, there are various companies such as homeward who will put a cash offer on your new home for you.  They then lease your new home back to you until you sell your old home. Once your old home sells, you can get a traditional mortgage to buy the home back from them at the same price they paid for it in cash.  Of course, they do charge a fee for this service. Ultimately, mortgage rates are at an all time low, but everyone knows it.  If you can find a way to offer cash up-front, you will have the upper hand.




Waive Your Appraisal
If you didn’t win the lottery or scourge up enough capital to be able to offer cash for your dream home, you best consider waiving that appraisal to some extent.  Austin homes are selling so quickly right now, they are outpacing the market data.  People are paying more for homes than they are worth based on the published comparable home sales data.  This means your home may not appraise at the purchase price. 

Without an appraisal waiver addendum, the sale of the home is contingent upon the home appraising at the contract price.  For sellers, this is a risk that the sale may not close.  By adding the appraisal waiver addendum you are increasing the likelihood of your offer being accepted.  But, if you couldn’t afford to pay cash for the house, you probably don’t want to waive the appraisal entirely.  You may be able to do a partial waiver in that case.  In this scenario, you would be agreeing up front that if the home appraises for less than the contract price you would be willing to bring additional cash to the table to make up the difference.  And, you are capping the amount of cash you would bring making this a partial waiver.

Let’s say you put in an offer on a home for $500,000, and you are planning to put 20% down ($100,000).  You do have $200,000 in cash.  If the home appraised for $400,000 and the lender required you to put 20% down they would only loan you $320,000.  Technically, you could still afford to make up the difference.  So you may want to do a partial waiver of your appraisal contingency.  This ensures that if the home appraises for less than $400k you don’t have to move forward with the offer and your earnest money will be returned, but if the home appraises for between $400-$500k you will still be on the hook to comply with the contract and purchase the home.  You should definitely consult with your mortgage lender before agreeing to waive your appraisal contingency.


Forget about an Option Period
When you put in an offer on a home in Austin you usually pay a few hundred dollars to the seller for an option period.  The amount of option money you pay and the length of the option period are both negotiable.  The option period allows you the time to do all necessary inspections and you can back out for any reason during the option period and get your earnest money back.  I used to say the typical amount for an option period is a few hundred dollars for a week long option period.  Today, that’s not going to cut it. 

Many buyers are foregoing their option period all together or offering thousands of dollars for a very short (1-2 day) option period.  While I wouldn’t necessarily recommend giving up the opportunity for an option period all together, you may want to modify how you approach the option period.  Make it as short as possible.  If you can get in an inspector within 24 hours, you do not need a 7 day option period.  If you are fairly confident there aren’t major issues with the home that would be deal-killers you may want to increase the amount for the option money.  At the end of the day, option money is money that you may lose if you don’t go through with the deal.  It’s kind of like gambling- only put in as much as you are comfortable possibly losing.


Pay for Everything
In normal times, the seller typically pays for the owner’s title policy in Texas.  These are not normal times.  Offer to pay for the title policy.  If you need a new survey, pay for that too.  A designer handbag for the seller- it could work.  Were you thinking of asking for the seller to contribute towards your closing costs?  Good luck with that. Perhaps you assumed getting the sellers to pay for a home warranty was standard practice- not anymore.  These days, the buyer who pays for negotiable items is often the buyer who wins in a multiple-offer situation.

​All in all, don’t lose hope if you want to buy a home in Austin in the near future.  While this slightly satirical commentary on the state of the current Austin market has many truths there are still ways to buy a home in Austin without throwing your entire life’s savings into it. Take a look at my other post, How to Win in a Multiple Offer Situation for less risky tips for crafting an appealing offer. 

Pay close attention to homes that have been on the market for a few weeks that others may have overlooked.  You may not be able to buy your dream home right now, but that doesn’t mean you can’t make a home your dream home. Homes that look beautiful and show wonderfully will go quickly and with many of the terms outlined above.  Some home sellers mistakenly choose a poor listing agent who decides to market their home with inferior quality cell phone photos that make me cringe.  This does not mean the home doesn’t look great in person.

Buying a home in Austin right now can be a challenge, but I know you are up for it!  If you want help navigating this insane Austin market, contact me today.

A number of factors have contributed to the omni-present buyer demand in the Austin real estate market.  Buyers are taking advantage of record low interest rates.  People are looking for more space as the reality of working from home indefinitely sets in, and large corporations are moving here in droves.  All of these factors have resulted in a shockingly low level of homes for sale in Austin.  In December of 2019, there were 1,285 active single family home listings in Austin.  In December of 2020, there were only 521.  As with any case of supply and demand, this is driving prices through the roof.  Multiple offer situations that push the sales price well above the asking price are common occurrences at almost every price point in the Austin market.  If you are submitting an offer to purchase a home right now, it’s not unusual to provide an appraisal waiver addendum that declares you are willing to bring additional cash to the table if the home does not appraise. ​

What does this mean for you?

If you are considering buying a property in Austin right now, understand that the market is incredibly competitive.  You may not be able to get your dream home, or you may have to place offers on multiple properties before finally going under-contract on one.  There should be an increase in listings this spring that will alleviate the market to some extent, but I would also expect prices to rise throughout the typical spring selling season.  The bottom line is that if you are prepared to deal with the harsh conditions that the Austin market presents right now, you are likely better off buying now than waiting.

If you are thinking about selling your home, there has never been a better time.  You can expect to sell your home quickly and for an unprecedented price.  That being said, if you hold off until the spring, you may make a bit more.  Ultimately, it’s up to your unique situation to determine if now is the best time to sell for you.

If you have specific questions about what’s happening in the Austin market and your best course of action, feel free to contact me anytime!

Selling an investment property is quite different than selling your primary residence. When you are considering selling a property that is tenant-occupied you will need to think about how the tenants may impact the sale of the home. The lease terms and your selling timeline will dictate how you can sell the home.  You could sell the home with leases in place or wait for the leases to terminate before listing the property.  If you wait for the leases to terminate you will appeal to a larger buyer pool, and the selling process can be facilitated more easily.  That being said, there are benefits to selling an investment property with tenants in place ( hello instant rental revenue!) If you determine that selling with tenants in place is the best option for you, following the advice below will help you sell your rental property with relative ease.

When you’re considering selling your rental property, the first step is to locate your lease or leases if you have multiple tenants.  Look at when the lease term ends and the monthly rent.  Does the lease terminate at a time of year that is favorable for selling for the highest dollar?  Does the monthly rent match the market rate?  If you’re not sure, you should contact a real estate professional to find out!  If your rental revenue is below market rate, and the tenants have a considerable amount of time left on the lease it may be better to wait until closer to the lease termination date to sell.

Next, you will want to look at the fine print in the lease that dictates how the property can be marketed. Identify what rights you as a landlord have to market and show the property.  Some leases will allow for showings within a certain amount of days prior to the lease ending.  Other leases may state that the tenant can pay a fee to waive the landlord’s right to allow showings during that time period.  If you determine that listing your home for sale with tenants in place is the best strategy, you MUST adhere to the showing terms dictated by the lease.  Furthermore, you will want the tenants to be cooperative in the process.

Communicate your intentions to sell early on; you will want to ensure they understand that the lease terms will stay the same when the property is sold.  The only difference will be the landlord is changing hands.  At closing, the security deposit will be transferred to the new owner, and the new owner will deliver instructions for paying rent to the tenants.   You also need to make sure to have a plan for how showings will be allowed and how much notice the tenants need prior to showings. Will you communicate showing requests by a text or phone call?  Do you need to inform all tenants or is their one point person with whom you can communicate? Are there certain times or days that will never work for showings?  How much notice does the tenant need to allow a showing?

In addition to clearly communicating showing notice protocols, it’s also important to set expectations for how you would like the home to be presented fo showings (free of clutter, clean counters, beds made, etc). Ultimately, you can’t force the tenant to ensure your property appeals to buyers.  However, you may be able to incentivize tenants with a discount on rent, a gift or you could offer a free home cleaning prior to an open house.  In the end, this small expense is well worth it to ensure the home shows well and thus yields a higher sales price.

Selling your rental property with tenants in place means you are selling your property to an investor!  Investors have one primary goal - to purchase a property that will provide a return on investment.  In order to determine how profitable the property may be, investors will want to know all the figures.  Make sure that the monthly rents are marketed.  If you have detailed records of expenses and improvements to the property you should provide these.  If you installed a new roof last year, or your property has a 10% cap rate, these are facts the investor will want to know! Make it as easy as possible for an investor to see the financial benefits of your property.

Do you have questions about selling your Austin area rental property?  Give me a call, and I’ll be able to help you determine the best strategy for your unique situation.