Profitable rentals in Austin: Short or long term? Best areas to target?

Question

Hello everyone,

I'm interested in investing in a rental property in Austin, but I'm not sure if short term or long term rentals would be more profitable.

I'd like to hear from people who have experience renting out their properties in the area.

Which type of rental has been more profitable for you, and which areas of Austin have the highest demand?

Any advice or insights would be greatly appreciated. Thank you!

Sara Levy-Lambert · Answer

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Eliott Elias · Answer

You should never STR a property if it does not collect three times what A LTR can. Short term rentals are a necessity in Austin to breakeven/cash flow.

Ryan Kelly · Answer

@Tommy Adeoye long term rentals are highly unlikely to cash flow currently due to prices, property taxes, and interest rates. Short term rentals are going to be restricted for investors in the city limits if it’s not your primary residence. You could look outside the city for more STR friendly locations. We’re seeing mid-term rentals as a potentially profitable strategy if you are buying in the city. Austin isn’t cheap, so you want to come with creativity to generate cash flow.

Jordan Moorhead · Answer

@Tommy Adeoye we're finding medium term, short term and co-living to work best on investment properties right now. I did recently sell one that works LTR section 8

Aaron Gordy · Answer

STR vs LTR. Ltr is much better imo even though the cash flows do not look as nice on paper. The reason is that I value my time alot.

STR is time intensive. Some folks do very well with them but its a job. My ltr is not a job at all. Its incredibly passive.

So, if I have to spend 1 hour a month dealing with a property that generates 100$ vs 20  hours a month dealing with a property that generates 1000 then its a no brainer for me. I will take the 1 hour as my time is now worth 100$ per hour vs. $50/hr (1000/20). If I have to spend less time on the ltr like depositing a check or better yet doing nothing as its direct deposit then my time generating that 100$ is 5 min (checking bank account online for the deposit). STR takes up a bit more time, imo. But there are caveats, of course. If the STR is a cash cow and I have the mechanisms in place to manage it so that my time spent is very little then the math equation is very different.

Profitable rentals in Austin: Short or long term? Best areas to target?

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