RentalScaling Your Portfolio

Austin’s Ever-Growing Short-Term Rental Market

STR Demand Shows No Signs of Slowing Down in This Thriving Market

Since 2008, Airbnb has helped real estate investors profit from. Before investors get into short-term rental investing, it’s important to ask: what cities hold the biggest profit potential for Airbnb hosts?

Austin, Texas, is the answer. Texas’ capital city has become one of the best places for Airbnb investment, and our list below will highlight:

• Why the Austin rental property investment market is great for short-term rental investors
• How investors in Austin can create profit

4 Things Short-Term Rental Property Investors Should Know About Austin

1.    Short -Term Rental Occupancy Rate

• Austin’s short term rental market surpasses other Texas cities. In 2021, Austin averaged 65% occupancy for the year. In Q2 2022, the occupancy reached 72% – compared to San Antonio’s 64.1% occupancy rate for the same period.

3.    Austin’s Booming Tourism Industry

• Austin, Texas is known as the Live Music Capital of the World because of the world-renowned SXSW and Austin City Limits Music Festival. Additionally, the city plays host to more than 250 music venues featuring rock, blues, jazz, hip hop, and other genres.
• There’s more to Austin than music. The city earns many tourism accolades – including the title of the most dog-friendly vacation destination and the best winter vacation destination. More than 30 million people visit Austin annually – generating more than $9 billion a year in tourism revenue and plenty of occupancy opportunities for short-term rental investors.

2.    Austin’s STR Regulatory Framework

• Austin has fairly strict regulations when it comes to short-term rentals within the city limits. Rental property owners are required to obtain an operating license, which requires proof of property insurance and a non-refundable fee. In addition, short-term rental property owners are required to renew their license each year or face a fine of up to $2,000 and the loss of their operating license.

4.    Population Growth

• Austin became the second fastest-growing U.S. city in 2022 – trailing only San Francisco. Texas’ capital city has experienced steady growth since 2000, expanding from 1,249,763 residents in 2000 to 2,283,371 in 2020.
• The Census Bureau estimates Austin's population stood at 2,352,426 as of July 1, 2021. The city’s combination of technology hub characteristics, high concentration of venture capital, warm climate, and vibrant culture often draws comparisons with the Bay Area, which is one reason Austin has attracted several high-profile Silicon Valley companies like Amazon, Google, and Tesla.

A Real Estate Investor's Guide to Austin

Austin, Texas is an attractive market for short-term rental investing, and real estate investors are flocking there because of the city’s growing popularity and real estate investment opportunities. The market is ripe for investing in STRs and investors are seeing continual ROI, so it’s important that real estate investors choose the right lender for their short-term rental property loans.

Lima One Capital has created a short-term rental loan program specifically designed for Airbnb properties, VRBO rentals, and vacation homes. Our DSCR-based STR loans for real estate investors can finance the purchase of short-term rentals or help you take cash out of your existing rental property portfolio.

Lima One’s expert private lenders and experienced short-term rental property financing team will make the process efficient and easy, and our nationwide reach empowers your investment strategy.

When looking for short-term rental loans for real estate investing, Lima One is the nation’s premier private lender, here to scale your short-term rental property portfolio. Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.