All Forum Posts by: Ryan Roberts

I'm a Realtor and have been managing Airbnbs in Austin since 2016. For the last couple years I switched my model from STR to 1-6 month rentals. It offers all the same benefits as STRs, but you don't need an STR permit, most HOAs allow them but don't allow STRs, there's less management since you have 4-5 guests/year instead of 3-4 guests/week, less wear & tear since your guests will almost always be couples or small families vs STRs where guests pack in the maximum occupancy... I could go on and on. 

I highly recommend pursuing this strategy vs STRs in Austin. Send me a message if I can be any help to you answering your questions, helping you find properties that make a good fit, or for ongoing management!

It's crazy how low the vacancy is for the 30+ day rentals. I've also had about 3% vacancy with the 30+ day rentals over the past 2 years. I feel like Airbnb's algorithms have improved to minimize your vacancy and often have a guest check in within a day or two of a guest leaving.

I don't know if I agree with #2 though, I would just increase your nightly rate and leave in the 20% discount.

Agreed! I've found these guests tend to restock and leave new commodities too, so it almost "self-sustains" after your first guest 😎 haha

As others have mentioned, it's very difficult to get the STR permit from the City of Austin for an investment property. The City of Austin defines STRs as "properties rented for less than 30 consecutive days". So a very simple solution (and great alternative to nightly rentals) is requiring a minimum 30-day stay, which still offers many of the same benefits as STRs.

There are MANY advantages to this strategy compared to STRs:

- No STR permit required: the permits are difficult to obtain, and cost $567 for the first year and $310 with each annual renewal.

- Less management: expect 4-5 guests/year vs 3-4 guests/week.

- No hotel occupancy tax: Texas taxes STRs 6% of rents. 

- Higher quality tenants: who's more likely to damage or trash your place? A guest paying thousands/month or a guest paying a few hundred bucks for a weekend?

- Less wear and tear: usually only a couple or small family, while STRs often pack in.

- Cheaper insurance: 'month or longer' landlord insurance costs less than STR insurance.

- And it works great for properties that have HOAs since most HOAs don't allow STRs.

That being said, you can definitely earn more revenue with STRs, but you’ll also have more expenses and more management.

My target market for this strategy is (1) remote workers who want to “vacation” in Austin while continuing to work, and (2) folks relocating to Austin and need a place to stay for a few months while they find a long term housing solution. There's huge demand from these markets, and with more and more companies allowing employees to work remotely and Austin’s insane job/population growth, the demand for this niche will continue to grow.

I'm an Austin Realtor and have managed Airbnb's in Austin since 2016. 

There are a ton of ways to minimize your vacancy, my favorite being the "Last-minute Discount" which allows you to set a discount on the nightly rate if the stay is within a certain number of days from today. For example, you can set a 40% discount for vacant nights that are within 2 days of today, 30% discount for vacant nights 3-4 days from today, and so on. So if you have a 2-night vacancy that's 2 days away, the first night is discounted 40% and the second night discounted 30%. This will really cut your vacancy and you can be more aggressive with your pricing.

Something to consider (and that I've started to do exclusively) is set 30+ day stays and go for the folks who want to work remotely or are moving to Austin and want a place to stay for a few months while they find a place to rent/buy. Instead of having 3-4 guests/week you'll have more like 4-5 guests/year, so there's only a fraction of the management. You also don't have to worry about getting a STR permit from the city or pay hotel occupancy tax, and most HOAs don't allow STR but do allow 30+ day rentals so it works great for condos & townhomes.

To get around to your question 😂 when I was doing STR I had 2-3% vacancy, and over the past two years with the "Mid-term" 30+ day rentals it's been 5-6% vacancy.

5%-12% depending on your credit. I definitely wouldn't pay off the 3% card, but paying off the 9% over getting into investing is a real toss-up. 

Try paying off the credit card debt with a personal loan or balance transfer. It will get you into a much lower interest rate and make the payments easier to manage. 

You can use an FHA home loan and only put down 3.5%, get private money or seller financing terms until your debt is under control. It stinks but it is possible, you just have to be very creative and motivated.

I'm trying to get property insurance for a house that has a squatter in it. My insurance agent said there's no policy available since there is a squatter. Can anyone recommend an insurance agent or a creative way to insure this property?

@Jacob Michaels

I'm sure y'all have found a solution here 6 years later but...

I'm a realtor in Austin and can provide comps from the Austin Board of Realtors' MLS. I'm also happy to be boots on the ground for any of your virtual deals you come across in/surrounding Austin.

@Guy Gimenez @Jay Hinrichs

Buying a house subject to the mortgage allows me to pay more money to the seller since I don't have to get my own financing.

Goes without saying that you shouldn't buy at 110% of value...

How are people buying sub2 deals without seeing a contract...

Of course you should have reserves in case the buyer/tenant starts missing payments...

Of course conduct yourself ethically...

If beginner investors have this in their "tool belt", why not use it?