STR advice - centrally located smaller house vs remove luxury experience

[Zara Fourmault]

Hello!

We're considering two potential strategies for STR investments in Austin

1. Larger single-family home with a pool – in a more remote location with amenities. Will be able to fit more people and make it more of a luxury experience
2. Smaller house in downtown – centrally located and more catering to people who prefer walkability 

From your experience, which strategy do you think offers the better combination of cash flow potential, occupancy, appreciation, and long-term flexibility? Are there specific neighborhoods or property types we should be focusing on—or avoiding—given current market conditions and STR regulations?

Any insights or recommendations would be greatly appreciated.