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Buyer’s guide

Buying in Austin, with eyes open.

Whether you want a home to live in, a rental, or both, the Austin wrinkle is the same: the short-term-rental license goes with the owner and the application, not the house. Here is how to read a listing without assuming the income, and what to confirm before you write an offer.

Austin is a strong, deep housing market with the volatility that comes with it — prices ran up hard, then cooled, and they move by neighborhood and by season. A buyer who is also thinking about rental income has to hold two questions at once: is this a home I want, and can it legally earn the way the seller implies?

The second question has a clean answer in Austin, and most listings skip it. A license is required for any rental under 30 days, it is tied to a type and a specific owner’s application, and it does not transfer in a sale. A home that “has been a successful Airbnb” tells you the use was possible; it does not hand you a license.

Before you make an offer

  1. Confirm the jurisdictionIs the parcel in Austin’s full-purpose, limited-purpose or extra-territorial jurisdiction? It decides whether a city license and the 17% hotel tax apply at all.
  2. Figure out the license typeOwner-occupied is Type 1; a non-owner-occupied house is Type 2; a unit in a multi-family building is Type 3. Run the address through the eligibility checker.
  3. Check the density limitsOne operator can run up to two STR units on a single-family site, and a capped percentage on larger ones. If a nearby unit you also own is close, you may hit the cap.
  4. Separate the house from the incomeUnderwrite the purchase as if the rental income were zero, then treat any STR revenue as upside. The mortgage calculator and revenue estimator keep those two numbers apart on purpose.
  5. Read the HOA and lease termsCondo and HOA rules, and any lease if you are a tenant planning to host, can forbid short-term rentals even when the city would allow them.
  6. Call the city if it mattersFor a specific address, confirm with Austin Licensing Intake (512-974-9144) before you rely on an STR plan.

Questions worth asking the seller

  • Is there a current city STR license on the property, and what type is it? (Remember: it will not transfer to you.)
  • What were the actual gross bookings and nights, not a projection — and over what period?
  • Are there HOA, condo or deed restrictions on short-term rentals?
  • What are the real property taxes at the current assessed value, not the prior owner’s exempted amount?
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