Understanding Short Term Rental Rules In Austin

Dated: 03/22/2017

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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 fest 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 acalltoday!  I can help guide you in the right direction.

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Erika Albert

Erika Rae Albert is an Austin native who has built her business around one guiding principle, YOU always come first. Prior to joining the real estate industry, she honed her her customer service s....

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