7 Steps For a Legal Airbnb Property in Austin, TX!

 

Hi, it’s Kristina! Co-Founder of OHA. Many of us are aware of the crackdown of illegal Airbnb activity in Austin. I must admit, I was guilty of that when I first moved to Austin as a broke 22 year old - it paid our outrageous electric bill! Many people have been using Airbnb this way for years; hosting people in their homes without a permit.

But don’t worry, if you are a homeowner in Austin who is looking to list your own personal home on Airbnb, there’s still a way for you to do it.

A while back, Meshelle Smith (Airbnb extraordinaire and owner of Pink Bubble Properties) led one of our Women Investor Group Meetups. She spoke about how to create a lucrative Airbnb and most importantly, how to make it legal in Austin. Below is an account of her experience legalizing her Airbnb and some steps you can take.

7 Steps For a Legal Airbnb Property in Austin, TX!

Short Term Rentals (Airbnb/Vrbo) can serve as an almost miraculous source of income. We’re able to live in grander homes and cooler neighborhoods. We can sometimes live mortgage free, work part time, or save money! My Airbnb pays for my mortgage, utilities, tuition for my two daughters, and $1,000/month for improvements. It sounds too good to be true, until the word ‘Licensing’ is mentioned… 

Austin requires STRs to have a license (non-refundable fee of $733.80). Once you are licensed, you will pay the 11% hotel tax (comprising a 9 percent occupancy tax and an additional 2 percent venue project tax). In theory, I fully support paying taxes in gratitude for this financial opportunity and to help the city.

However, navigating bureaucracy, losing the $733.80 if I didn’t pass, the city declining my request paralyzed me! Crazy fear! I postponed until I received a warning citation from the city. The citation prohibited me from advertising. I was forced to move through the process, which was both lovely and tedious.

The lovely part of the process was the kind personnel I encountered at every city desk. They were helpful and patient. At one point, I knocked on the window of a CODE enforcer truck parked on my street. I asked the gentleman if they were on our side or NOT. He laughed and filled me in. The overall message was that if I owned a house, it was my right to use it as a STR. The city just wants it licensed and the money.

The tedious part was navigating the website and wait times. Because the website is confusing and continually changing, I ended up making a dozen trips to offices to receive current, quality information. You can benefit from my many visits! I HIGHLY recommend taking your documents into the STR office instead of filing online. Parking is easy and no waiting! The clerk will be able to verify that you have the correct documents and will steer you in the right direction.

Use this cheat sheet to move through the process. This morning I needed some clarification and called the STR office. A helpful clerk answered my call and helped clarify. They are SO nice. 

7 Steps To Get a “Short Term Rental” License in Austin, TX:

  1. STR Application: Fill this out online and print it.

  2. Drivers License: Your driver’s license must have your current address (the address of the STR).

  3. Home Insurance: They just need the summary page. TIP: Not necessary, but I altered my insurance to cover STR. It costs $150.00 more a year.

  4. Homestead: If you haven’t already, file for homestead exemption!

  5. Certificate of Occupancy: Visit the Certificate of Occupancy webpage at Development Services for more information on how to obtain a Certificate of Occupancy.

  6. Hotel Tax Account: Create a free account so you will be able to pay your quarterly taxes.

  7. All 3rd Party Agents must have Notarized authorization from Owners allowing them to manage property -
    Mail to:
    City of Austin – Austin Code Department
    Attn: Finance – STR
    PO Box 1088
    Austin, TX 78767

  • From Austin’s STR page:


If you’re interested in coming to our monthly Women Investor Group Meetup, you can sign up here.

Looking to get into your first home and make it an investment? Our team would love to talk to you. We invest in real estate ourselves and can walk you through the process as your Realtors and teachers. We look forward to seeing you at our next workshop or meetup!