Air Bnb Questions - Austin, TX

5 Replies

Hey all,

Had a few questions about Air Bnbing in Austin, TX. 

  1. I am house hacking, and have an extra bedroom in my unit that I hope to Air Bnb. According to the city's website, I need to apply for a Type 1, Partial Unit license, which costs $443 for the license, and then $236 on a recurring basis. Am I correct on this assessment? 
  2. In this same vein, what's the general trend of short term rentals in Austin, TX? I've only been here for 14 months, so insight into how the city's trends  regarding STRs would be interesting to know. 
  3. How/when does the city collect taxes? Is it automatically deducted via Air Bnb, another auto debit, or am I required to retain the rental payments and send a physical check?
  4. Does Air Bnb allow you to post in Austin without the license? Not considering doing this, just curious.
  5. Are Air Bnb guests typically targeting a specific neighborhood, or have Air Bnb hosts seen success outside of populate locations? I ask this because my duplex is 10-15 north of the city at 183/290. 
  6. My overarching question is - Is Air Bnbing even worth the cost/time considering the licensing fee? My assumption is yes considering that I could $50/night for 20 nights throughout the year and easily recoup that cost. But, is ~$400 in profit worth 20-30 hours of my time? I would definitely need to see more volume of my guests, higher rental rate, or the development a system to reduce my efforts. If I'm able to get roughly $500/revenue per month, I'm almost living for completely free, which would be a huge boon to my capital accumulation process. 

In addition to any of these questions, please do share your experiences as well! Also, if I'm missing anything key, please let me know. I'm still a newbie, and first time landlord, but have helped with a successful Air Bnb in the past. 

Thanks in advance to all that respond. 

Chirag

Sounds like a lot of work for the risk/reward. Why not just rent out with 6 or 12 month leases so you will not have to worry about things like people stealing your stuff or trashing your place? 

In my current neighborhood, there is a STR that gets a pretty good volume. That's located at Pleasant Valley and Elmont, between Riverside and Lakeshore. However, the whole 3 bedroom house is available for rent. In my previous neighborhood, we lived right next door to a STR. It would be rented a small handful of times per year (SXSW, ACL, F1, Euphoria mainly). That was located off 183 around Bolm Rd. Location is large factor in determining volume. My gut tells me you'd do much better just getting a roommate on a normal lease.

@Stephen Stokes @Kris Wong  

Thanks for the responses, it does seem that Air Bnb might not be worth the hassle. The reason a 6-12 month lease might not be appropriate is that I'm house hacking with my fiancee, and we'd like to retain our privacy. Under the Air Bnb model, we can seek short-term tenants when convenient, and remove the availability at our discretion. Either way, thanks for your inputs! Will consider them as we move forward. 

In that case, suggest you buy a duplex. That way you retain your privacy and still accomplish your goal of supplementing the mortgage with rental income. You seem fixated on the idea of “house hacking” but in my humble opinion, that idea is probably not suited for someone that has privacy concerns. By the way, I started with my first house filled with 2 and sometimes 3 full time roommates that paid the mortgage. To this day, I have never paid the mortgage on that house from my own pocket.

Good thinking! Should have clarified in my initial post, I'm house hacking a duplex. Just thinking how I can get more out of it. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.