30 day or less rentals are proving to be a very profitable way to invest in real estate, especially in Central Texas. Here are some short term rental alternatives in neighboring cities that are good choices.
Keeping track of all the different ordinances and restrictions can be challenging, so I’ve created this easy-to-use table with many cities close to Austin, and the basic requirements for running a short term rental.
What are Type-2 Short Term Rentals?
However, since Austin has stopped issuing Type-2 permits, finding a pure investment short-term rental house in Austin has become challenging.
Type-2 STRs are the non-owner-occupied houses. If you want to understand more about the different types – I’ve got a great article on understanding short term rentals in Austin.
So since getting a pure investment house for rentals of less than 30 days is pretty much out (at least oas of Q1 2022), I recommend turning to other areas.
What makes a good location for a STR
Obviously, we all think of walking to SoCo St or Franklin’s BBQ as an idyllic location for a Homeaway rental, but actually, people look all over for a place to stay. There are lots of different factors to consider including, but not limited to:
- Availability for the dates travelling
- Price
- Features of the home
- Ratings of the host
And as an investor looking for Air BnB homes it is important to find a property that not only suits the visitor, but also your financial needs.
Many of these other towns are a fraction of the price of Central Austin homes. Plus in many of these areas there are NO restrictions to deal with, so you can be up and running fast.
Where else to look for Short Term Rentals other than Austin
In addition to these towns, I encourage people to look in unincorporated areas adjacent to Austin. These are sometimes known as ETJ (extraterritorial jurisdiction), and don’t fall under the umbrella of the Austin city STR ordinances. These also make great short term rental alternatives.
I like to use Redfin for all my house searches – both for personal and investment properties. They have the best data, and fastest results. I can dial in exactly what I’m looking for and won’t get weird phone calls from agents offering to help.
| City | No Restrictions | Permit Required | Proof of Insurance | Pay Hotel Tax | Notes |
|---|---|---|---|---|---|
| Bee Cave | ✅ | ||||
| Buda | ✅ | ✅ | ✅ | Requirements include proving to the director of planning that the unit and property don’t have any outstanding issues related to taxes or building, electrical, plumbing, fire, health, housing, police, planning, noise, or code enforcement provisions | |
| Cedar Park | ✅ | ||||
| Dripping Springs | ✅ | ||||
| Driftwood | ✅ | ||||
| Fredericksburg | ✅ | STRs are permitted in some zoning districts but not all. The city is evaluating plans currently. | |||
| Georgetown | ✅ | ||||
| Horseshoe Bay | ✅ | ||||
| Hutto | |||||
| Jonestown | ✅ | Contact the city for current regulations in the STR Overlay District | |||
| Kyle | ✅ | ||||
| Lago Vista | ✅ | Contact the city for current regulations and the zoning map for allowable locations | |||
| Lakeway | ✅ | Condos are OK, but only 25 homes can be used as an STR – there is a 2+ year waiting list for a permit | |||
| Leander | ✅ | Anything less than 6 months is an STR in Leander and needs a HOTEL permit | |||
| Marble Falls | ✅ | ✅ | ✅ | Must also pass a city inspection | |
| New Braunfels | ✅ | short term rentals are not allowed in any residential zoning districts. A special use permit must be obtained. Contact the city for more details. | |||
| Point Venture | ✅ | Visit the City website for the STR Ordinance | |||
| Rollingwood | STR of less than 30 days prohibited | ||||
| Round Rock | ✅ | ||||
| San Marcos | ✅ | Only one STR per owner – see city regulations for requirements | |||
| Sunset Valley | ✅ | ||||
| Spicewood | ✅ | ||||
| The Hills | ✅ | Significant HOA requirements | |||
| Volente | ✅ | ||||
| Westlake Hills | ✅ | House must be Homestead, no guesthouses allowed | |||
| Wimberly | ✅ | Application and Hearing are required |
Final Thoughts
When looking for a short term rental, try thinking outside the box. You never know what location will be desireable to your guests.