Navigating STRs in Austin (with Jeremy Vandermause)

Austin has long been a hotspot for short-term rentals (STRs), drawing investors and owner-occupants alike. From tiny homes to garage apartments to full-time Airbnbs, STRs can generate significant income—but only with careful planning and realistic expectations. Based on Jeremy Vandermause’s personal and professional experience with STRs, this guide walks through what agents should know when representing buyers and sellers in the short-term rental space in Austin.

A detailed write up is below the video!

Short-term rentals can be a lucrative investment in Austin, especially during high-traffic seasons like SXSW, ACL, and COTA events. But the STR market has evolved significantly. The post-COVID boom led to market saturation and increased competition, forcing many hosts to reduce pricing and improve their offerings just to stay competitive.

Now, as the market stabilizes, successful STR ownership depends on proper expectations, location strategy, permitting, and professional management. Agents play a critical role in guiding clients through these unique and nuanced transactions.

Buyer Agent Perspective

Setting Expectations from the Start

• STR ownership is a hospitality business, not a passive income stream.

  Monthly income fluctuates heavily—buyers need to prepare for a roller coaster of earnings:

  • Spring (March): higher income due to SXSW, COTA, and festivals.
  • Summer (June–July): May drop often below mortgage costs.
  • Fall (October): Another peak with ACL and other events.
  • Winter: Typically slower.

Location & Permit Strategy

• STR success depends on proximity to Austin's top attractions.

• Most profitable STRs are centrally located—avoid areas like Round Rock.

  Check for STR permit eligibility before making offers:

  • Permits vary by type (owner-occupied, non-owner-occupied, etc.).
  • Permits may be denied if another STR exists within a certain amount of feet.
  • Permit applications cost $700–$1,000 and require quarterly hotel tax payments.

Management Realities

• STRs require active management—or a trusted property manager (often 20–30% of revenue).

  Buyers need to know:

  • How to manage bookings, cleanings, and guest relations.
  • That poor reviews can kill future income.
  • That Airbnb guests may be more respectful than long-term renters, but damage can still occur.

Tools for Buyers

• AirDNA: Subscription-based platform to estimate nightly rates, occupancy, and revenue in specific zip codes.
• Turno: A cleaning management tool designed for STRs, offering reliable turnover services and light guest-ready touches.

Listing Agent Perspective

First Question: Do We Need to Sell It As an STR?

• STR listings narrow the buyer pool to investors or hobbyists.

• If the property is in good condition and staged, it can easily pivot to a standard listing.

  Consider the market:

  • In strong STR markets, showcase income potential.
  • In slower markets, open up to owner-occupants or long-term investors.

If Selling as an STR, Be Prepared

• Provide P&L statements, Airbnb listing links, recent reviews, and STR permits.
• Share a reason for selling to proactively address concerns (e.g. “It’s profitable, but we’re moving,” vs. “It’s underperforming”).
• If possible, transfer listings and reviews to the new buyer—makes the transition easier and preserves credibility.

Marketing to Investors

• STRs are often marketed like off-market investments:
  • Use investor networks, pocket listing platforms, and private remarks in MLS.
  • If located in a high-traffic tourist area, consider marketing to guests staying in the property—they may be potential buyers.

STR Tips for Both Agents and Clients

Who STRs Are Not For

• Buyers who are risk-averse, unorganized, or uninterested in property management.
• Sellers who want a premium price without strong revenue to back it up.

Who STRs Are For

• Buyers who view this as a business venture and are ready to work for the income.
• Sellers with strong booking history, great reviews, and the documentation to prove it.

Important Reminders:

• Cash flow is rare in Austin without a large down payment.

  Buyers should plan for:

  • Upfront expenses (furnishings, setup, professional photography).
  • Quarterly hotel taxes and permit renewals.
  • Ongoing maintenance and guest services.

Final Takeaways

Whether you're helping someone buy or sell an STR in Austin, the key is clear communication and solid due diligence.

If You're Working with Buyers:

-Set clear expectations around income fluctuations.

-Vet the location and permitting status early.

-Recommend helpful tools like AirDNA and Turno.

-Be honest—if it's not a good fit, better to find out early.

If You're Working with Sellers:

-Ask if they need to sell as an STR—or if we can broaden the buyer pool.

-Provide thorough documentation: P&L, listing, reviews, permit status.

-Set the expectation that buyers will ask why they’re selling—be prepared with a confident, clear answer.