Introduction
Austin, Texas, often referred to as the “Live Music Capital of the World,” is a vibrant and rapidly growing city that attracts visitors from around the globe.
With its booming tech industry, renowned festivals, and cultural attractions, it’s no wonder that the short-term rental market in Austin has experienced significant growth in recent years. In this blog post, we’ll delve into the key statistics and trends of the short-term rental market in Austin, providing valuable insights for both potential investors and travelers.
Market Overview
To understand the dynamics of the short-term rental market in Austin, we need to examine various factors, including home values, rental rates, occupancy rates, supply growth, and regulatory environment.
Supply
The most popular homes are 3-bedroom homes, comprising 23.94% of inventory. This is followed by 1 and 2-bedroom homes at 22.96% and 19.22% of the total inventory, respectively.
Home Values and Depreciation
According to Zillow, the median home value in Austin, TX stands at $533,719. However, it’s important to note that homes in Austin experienced a depreciation of -6.20% in recent times. This decline in home values can be attributed to various factors, including market fluctuations and changes in buyer preferences.
Average Daily Rate
The median ADR for the market is $303.20. The Average Daily Rate is the highest for 13 bedroom homes ($750) followed by 12-bedrooms and 9 bedrooms at $740 and $730 respectively.
Gross Yield
Occupancy rate is 54%, short-term rental hosts in Austin have the potential to generate an annual revenue of $49,000. These figures highlight the lucrative nature of the (Airbnb) short-term rental market in the city.
The average gross yield for Airbnb rentals in Austin is 9.18%, which represents a decent return on investment for potential property owners.
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Property Taxes and Regulation
When considering investing in short-term rentals, it’s crucial to account for property taxes. In Austin, the average property tax stands at 1.95% according to SmartAsset. This cost should be factored into the financial analysis of potential investors.
In terms of regulation, Austin’s short-term rental market is somewhat investor-friendly. However, there are density limitations for homes that are not primary residences. These regulations aim to maintain a balance between the availability of housing for residents and the growth of the short-term rental industry.
Hosts
The market is dominated by property management firms. The largest host is Vacasa Texas with 4.76% of the total inventory and an average review of 4.80⭐️s .
Key Questions
Now, let’s address some of the key questions that provide additional context about Austin, TX, and its short-term rental market.
Median Household Income
The median household income in Austin, TX is an essential indicator of the purchasing power and economic conditions of the city’s residents. As of 2021, the median household income in Austin was approximately $78,800.
Climate
Austin experiences a subtropical climate, characterized by hot summers and mild winters. Summers are typically hot and humid, with temperatures often reaching the high 90s Fahrenheit (around 35-38 degrees Celsius). Winters are generally mild, with temperatures averaging in the 60s Fahrenheit (around 15-20 degrees Celsius).
Guests
The majority of the guests come from inside of Texas. 9.76% of all guests are from Houston followed by Austin with 8.43%.
Population Size
As of 2021, the estimated population of Austin, TX was around 1 million residents. The city’s population has been steadily increasing over the years, driven by factors such as job opportunities, quality of life, and cultural attractions.
Sports Teams
Austin is home to several professional sports teams, including the Austin FC, a Major League Soccer (MLS) team that began playing in 2021. The team’s presence has added to the city’s vibrant sports culture, offering exciting matches and events for sports enthusiasts.
Colleges and Universities
Austin boasts a robust education sector and is renowned for its prestigious universities. The city is home to the University of Texas at Austin, one of the largest and most respected public research universities in the United States. Additionally, Austin is home to other institutions such as St. Edward’s University, Concordia University Texas, and Huston-Tillotson University.
Crime Rate
It’s important to consider the safety and security of a city when analyzing the short-term rental market. Austin’s crime rate is relatively low compared to other major cities in the United States. However, it’s always advisable to exercise caution and take necessary precautions as a traveler or property owner.
Visitor Demographics and Total Number of Visitors
Austin attracts visitors from various parts of the world. While specific data on visitor demographics and the total number of visitors may vary, the city welcomes a diverse range of travelers, including domestic and international tourists, business travelers, and those attending festivals and events.
Popular Tourist Attractions
Austin offers a wealth of tourist attractions that contribute to its popularity as a travel destination. Some of the city’s top attractions include:
- Texas State Capitol: A stunning architectural masterpiece and the seat of the Texas government.
- Lady Bird Lake: A picturesque reservoir offering opportunities for outdoor activities such as kayaking, paddleboarding, and hiking.
- Barton Springs Pool: A natural spring-fed pool located in Zilker Park, perfect for swimming and relaxation.
- South Congress Avenue: A vibrant street lined with unique shops, boutiques, and renowned eateries.
- The University of Texas at Austin: A campus known for its beautiful architecture, museums, and cultural events.
Peak Season
Austin experiences a peak tourist season during the spring and fall months. Spring, especially March, brings an influx of visitors who come to enjoy events like the South by Southwest (SXSW) festival and the Austin City Limits Music Festival. Fall is another popular time to visit, with pleasant weather and various cultural and music festivals taking place.
Conclusion
The short-term rental market in Austin, TX presents a promising opportunity for property owners and investors seeking to capitalize on the city’s growing tourism industry. With a significant number of active rentals, attractive revenue potential, and a somewhat investor-friendly regulatory environment, Austin offers a favorable market for short-term rental ventures.
However, it’s essential to consider factors such as home values, property taxes, and market dynamics before making investment decisions. Additionally, understanding the city’s demographics, climate, attractions, and peak seasons can help both hosts and travelers make the most of their experiences in the vibrant city of Austin.
