E-RAE REALTY
  • HOME
  • BUY
  • SELL
  • INVEST
  • EXPLORE
  • BLOG
  • ABOUT
  • CONTACT
  • HOME
  • BUY
  • SELL
  • INVEST
  • EXPLORE
  • BLOG
  • ABOUT
  • CONTACT

Short Term Rentals- Understanding Austin Regulations

2/13/2017

6 Comments

 
With the rise of popular sites such as Airbnb and Homeaway, a growing number of Austin residents are considering renting their properties out as short term rentals. Renting your home out during events like SXSW and the Austin City Limits can easily provide you with enough money to go on vacation yourself and pocket some extra cash. 

However, there are a plethora of regulations one must be aware of in order to earn extra money hosting out of town guests. 
 
First, if your property is in the city of Austin limits, you must have a permit to operate.  Obtaining a Short Term Rental (STR) permit is not particularly challenging; however, you must understand the types of permits. 
 
Type 1 refers to owner-occupied residences.  A Type 1 STR means that this must be the primary residence as shown in tax records.  A few examples of Type 1 STRs are:  you go on vacation and rent your home while you are away, you rent out 1 room in your home and stay there too, you rent out your guest house while you stay in your main house. 
 
Type 2 refers to a non-owner occupied STR that is either a single family home or a duplex, NOT a condo.  A Type 2 STR is an investment property that you rent out for short term rentals.  The number of Type 2 units per geographic area is limited by the City of Austin.  At this time, they are not issuing any more permits for Type 2 STRs. Also, it is important to note, the STR permit does NOT convey with the sale of a property.
 
Type 3 refers to multi-family short term rentals that are not owner occupied.  The number of non-primary residence condos that can be used as STRs is also regulated by the city based on geographic regions.  You must check with the city to see if your condo could be used as an STR. 
 
However, you will first want to check with your condo association to see if they allow you to rent out your condo as a STR.  Similarly, many HOAs will prohibit the use of residences as STRs.
 
If you’re thinking of purchasing a property, and would like to use it as an STR, give me a call today!  I can help guide you in the right direction.
6 Comments
Tom
3/19/2021 05:28:35 pm

How are the prospects of STR condo in downtown Austin in the post pandemic world. Should I buy a single family home and put it for long term rent or purchase a condo and put it on short term rental

Reply
Erika Rae Albert
3/19/2021 09:29:36 pm

Long term rental investments will likely not be cash-flow positive given our current market. You most-likely will do quite well with appreciation gains in either scenario. However, in the short-term market you may find better monthly returns. That being said condos will have HOA fees that will need to be taken account when running rental projections. If it were me, I may consider a short-term rental investment of a single-family home outside of the Austin City limits. Huge homes have taken a hit as a result of COVID of but a modest home could actually do well considering many would prefer a vacation rental to a hotel in the current climate.

Reply
Tom
3/20/2021 12:53:57 pm

Thank You Erika! Sounds like buying a condo for short term rental might not be a good investment in the current environment. Would it work if I bought a condo kept it as a long term rental for a year and later convert it to short term rental after a year or so.

Erika Rae Albert
3/20/2021 01:10:39 pm

Hi Tom,

Give me a call to discuss in more detail. 512-779-7597

kari
2/17/2022 01:24:51 pm

HI Erika

Can you point us in the right direction if we buy a single family home and want to do 28+ furnished rentals what permit do we need OR do we need one. Idea is to use as our second home and rent out the months we are not in Austin.
Any pointers or advise are very welcomed:)

thank you

Reply
Las Vegas Gay Bears link
5/15/2024 05:38:20 pm

Nice post thankss for sharing

Reply



Leave a Reply.

    BLOG

    Sharing Austin real estate updates, home owner tips, & more.

    Archives

    March 2025
    January 2025
    February 2024
    January 2024
    July 2023
    February 2023
    November 2022
    September 2022
    June 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    September 2021
    August 2021
    July 2021
    June 2021
    March 2021
    January 2021
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017

    Categories

    All
    ADUs
    Attractions & Events
    Buying A Home
    Condos
    Design
    Development
    Home Maintenance
    Investments
    Lake Austin
    Market Updates
    Neighborhoods
    Selling
    Short Term Rentals
    Westlake

All information provided is deemed reliable, but is not guaranteed and should be independently verified. 
​Please Note:  Texas law requires licensed agents to provide this Information About Brokerage Services

​
Licensed agents are also required to provide:  Texas Real Estate Commission Consumer Protection Notice
Photos from State Farm, pheaber