Compare short-term rental (Airbnb/VRBO) vs long-term rental income side-by-side — with Austin permit costs, platform fees, and realistic occupancy assumptions.
I can verify STR zoning for the address, pull rent comps, and help you decide which strategy makes more sense for your specific property.
It depends heavily on location and management. Downtown and south Austin properties near entertainment districts can earn $2,500-$5,000/month net after all STR expenses. After platform fees, cleaning, utilities, supplies, and management, net income is typically 45-60% of gross bookings. Verify STR zoning before purchasing.
Austin requires an STR permit ($565/year Type 1 owner-occupied, $914/year Type 2 non-owner-occupied). Type 2 STRs are prohibited in most single-family residential zoning — this catches many investors off guard. Always verify zoning before purchasing for STR use.
55-70% annual occupancy is typical for well-optimized Austin STRs. Event weeks (SXSW, ACL, Formula 1) approach 100% at premium rates. January-February and parts of May-June are slower. Use 60% as a conservative planning assumption for a new listing.
Platform fee (3%), cleaning per stay ($100-$200), supplies ($50-$100/month), utilities (you pay — $200-$400/month), wear and repairs (3-5x LTR), management (20-25% if outsourced), STR permit ($914/year Type 2), and professional photography upfront. Total costs often consume 40-55% of gross revenue.
STR can produce 1.5-3x the gross income of LTR in the right location, but requires active management, higher costs, and carries regulatory risk. LTR is more passive and stable. The decision depends on your location, involvement level, and risk tolerance for regulatory changes. I advise investors on both regularly.
78704 (Barton Hills, South Congress, Travis Heights) has strong year-round demand. 78701/78702 (Downtown, East 6th) drives very high event demand — verify STR zoning carefully before buying. Mueller and South Lamar also perform well. Suburban properties need a specific demand driver to compete.
The F1 US Grand Prix (October/November) drives some of the highest STR rates of the year. Properties within 15-20 miles of COTA can command $400-$800/night. A strong F1 weekend can equal 2-3 months of normal STR income for a well-positioned property.
The combined rate is approximately 17%: Texas state hotel tax (6%), City of Austin hotel tax (9%), and Austin Tourism TPID (2%). Airbnb collects and remits automatically in Austin. VRBO may require manual remittance. This is collected from guests, not an owner expense, but you must be registered and compliant.
STR gross revenue = ADR × 365 × occupancy rate. Cleaning costs = (365 × occupancy) / avg stay length × cleaning cost per stay. STR operating expenses include: property taxes, insurance, platform fee (% of gross), management fee (% of gross after platform), cleaning costs, utilities, supplies, permit, and maintenance. LTR effective gross income = monthly rent × 12 × (1 − vacancy). Both sides share the same debt service and mortgage rate.
Cash-on-cash = annual cash flow / (down payment + closing costs). Closing costs estimated at 2.5% of purchase price. This calculator does not include depreciation, STR occupancy taxes (collected from guests), or income tax treatment — both strategies have different tax implications. Consult a CPA. Last updated July 2026.
