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

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 the city is coming for its money! 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.

One of the most recent speakers at our Women Investor Meetup was Airbnb extraordinaire and owner of Pink Bubble Properties, Meshelle Smith. She spoke about how to create a lucrative Airbnb and most importantly, how to make it legal in Austin. Below is an account on her experience with legalizing her Airbnb and steps you can take.

7 Steps For a Legal Airbnb Property in Austin Texas!

Short Term Rentals (AirBNB) is an almost miraculous source of income. We are able to live in grander homes and cooler neighborhoods. We can live mortgage free, work part time, save money! My airbnb pays for my mortgage, utilities, tuition for my two daughters, and 1000/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 572.00). Once you are licensed, you will pay the 9% quarterly hotel tax. In theory, I fully support paying taxes in gratitude for this financial opportunity and to help the city.

However, navigating bureaucracy, losing the $572.00 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. (They just want their money!)

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

1. STR Application: Fill this out online and print it. austintexas.gov/str
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 cost $150.00 more a year.
4. Homestead: If you just purchased your home, you have to FILE for homestead but you do not have to wait for the deadline. https://www.traviscad.org/eservices/ The short term rental clerk will look up TCAD (Texas Central Appraisal District) to verify that your name is on the deed. You can bring in the accepted homestead application OR your voter registration card! Easy. I picked up mine at: 5501 Airport Boulevard
5. Certificate of Occupancy: A CO verifies that your home is safe. You may have the CO filed with the city. If so, they will email it to you free. They are quick! (DSDhelp@austintexas.gov). If there isn’t a filed CO, go to (505 Barton Springs Rd, Austin, TX 78704). Second floor. They will walk you through the 2 step process. This will take several weeks. 1. analyze your property survey (two weeks/$200) 2. Have your house inspected. ($200)
6. Hotel Tax Account: Create a free account so you will be able to pay your quarterly taxes. http://bit.ly/STRtaxes
7. Pay Fee: Bring $572 in the form of cash, check or card. Bring those items to the STR office. The clerk will verify that you have the correct documents. Once accepted, they say you will receive your license in 30 days. My experience is that you will receive a positive email in two weeks. They are awesome!

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Hopefully that was helpful! I know I need to get on this as well. I have not been utilizing Airbnb at my house since the city cracked down on the licenses and now that I know what to do, I’m going to start working on these steps ASAP.

If you’re interested in coming to our monthly women’s meetup and hear from different speakers in the real estate field, 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!

Kristina is the co-founder of Open House Austin, a real estate education company. Contact our team for any real estate related questions or to start the home buying or selling process. Don’t live in Austin? We can also connect you with a great Realtor in your area.