If you live in Austin, you could be sitting on a potential gold mine if you have a spare bedroom, an extra space in the back, or can stay away from your home for a period of time. Why? Airbnb and HomeAway… that’s why! With SXSW upon us, there is no better time than the present to jump on the bandwagon.
SXSW is expecting 90,000 out-of-town visitors over the 2-week Film, Interactive and Music Festival. Downtown Austin only has 9,000 available hotel rooms and there are only 40,000 in the whole metro area. Do the math.
Now, before we get start detailing with you the right way to list your property, there ARE some City of Austin rules and regulations in place. Shocking! But don’t fret; STRÜB is a literal expert on the topic of Short Term Rental [STR] in the ATX. We have helped numerous clients acquire and operate STR properties and even have rented out our own. We know the ropes.
First, let’s start with compliance.
- Get property insurance if you do not already have it. And no, property insurance is not the same as homeowner’s or renter’s insurance.
- Every homeowner’s insurance policy has a business exclusion clause which means short-term vacation rentals are not covered. If you live in a rental, landlord insurance only covers long-term rentals, not short-term. So, you have to have property insurance to cover your short-term rental. In Austin, property insurance costs vary by location and type of property. STRÜB can refer you to available resources for the best options specific to your needs.
- Find the City of Austin short-term rental license application that fits your property here.
- File the application with the Austin Code Department, along with proof of insurance, certificate of occupancy or certificate of inspection, and the required $443.00 non-refundable fee.
- Pay the City of Austin Hotel Occupancy Tax, if applicable (find out here).
- If you’re thinking, “WOW, that’s a lot of money, [and hassle] maybe I just won’t bother…”, then stop right there! The City of Austin can fine an unlicensed short-term rental owner or operator up to $2,000 per day operated or rented if caught without a license.
Now that we have gone through the red tape, let’s get to the fun stuff.
- First comes pictures. Clean up your home and get it photo-ready! There is a reason why hotels only show pictures of rooms that looked like they have never been touched. Your camera phone is fine, but do some research for best angles, lighting, filters, etc.
- Now comes the tricky part – how much to charge. Pay special attention to the type of property, number of bedrooms & bathrooms, overall upkeep and decor, and proximity to tourist hot spots. Compare on AirBnb and HomeAway how much neighboring STRs are charging and set your price close. Both Airbnb and HomeAway allow you to charge cleaning fees and other charges but be careful that after they are all added up plus taxes, your price doesn’t deter people from staying. If in doubt, ask STRÜB.
- Setting your price per season. “During SXSW in March 2016, prices in Austin tripled — the most expensive seen during the year. The median price for a rental was $600 a night, compared to Austin’s overall median price of $200 a night normally. Interestingly, while a three-bedroom during SXSW 2016 cost around $650, a one-bedroom went for around $100. Not bad.” – Austin Culture Map. [We like Austin Culture Map].
- How do I set my property apart from others?Vacation rental sites such as Airbnb and HomeAway primarily base their ranking system on the overall booking experience. This runs from the very first moment a traveler begins to search, until the moment they book your property. Specifically, the algorithm looks at the availability of online booking for your property, average response time, and accuracy of your booking calendar. Reviews and traveler photos can also help ranking, so make sure your guests have the absolute best experience possible at your property! Airbnb travelers are able to rate their hosts on communication, check-in, accuracy, cleanliness, and overall experience, so it wouldn’t hurt to leave a bottle of Tito’s on the counter for them to enjoy…
We hope this helps you in your future Austin STR endeavors! If you have any questions, please contact STRÜB. Oh, and if you want an example of a perfect property to occupy that also comes with a built-in money maker, check this one out. It’s gold!
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