1. Thank You SXSW
SXSW (South by Southwest) is an annual festival that takes place in March and is a HUGE event and nationwide known. Austin residents know how difficult it is to find a place during such events. Some Austin residents rent out their apartments for this festival alone and bring in over $1,000 a night. Fathom 130,000 people attending the SXSW festival in Austin with just 30,000 hotel rooms in the city and 7,000 rooms downtown.
Airbnb Austin hosts were asked about their prices during the SXSW festival and most reported successfully renting out their properties for double or triple their normal price. This is especially the case for those who rent out to big companies which are paying for their employees to attend, like Google and Sony. Rates tend to be lower in Austin but the livelihood and events can certainly create some peaks. These types of events alone might be worth the investment in Austin; you could be one of those hosts who rent out an apartment downtown for $10,000 a night.
2. Cheaper to Buy Properties in Austin
Although it was found that Austin homes are slightly overpriced by 8%, data company Local Market Monitor (LMM) still expects Austin to be a safer bet. After talking to LMM, Forbes reported the average home in Austin is about $261,923 and is one of the best cities to invest in 2015. The average rent for a 2-bedroom is about $1,600. In 2015, Austin’s house price to income ration in Austin was 5.27, compare that to San Francisco’s 18.17. Other sources have found that Texas in general is a cheaper state; the price of land is cheaper and getting building permits is quicker than in other states. This is why we keep hearing “Texas is a great place for investing.” With prices like these and the high demand of renting entire properties, Austin could be a great location to buy.
Related: Buying Your First Rental Property
3. Expect a Good ROI for Airbnb Austin
Nightly rates tend to be lower in Austin but majority of Airbnb Austin rentals are for entire homes, most of the nearly 4,000 listings are for entire homes with high revenue. These properties can bring in $2,000-$4,000 on average. There’s clearly a demand for entire homes, so it would be worth the investment to purchase a home or an apartment in Austin for renting it out on Airbnb. High season is March to May and September to October.
4. It’s Not Inflation, it’s Demand and the Future
Don’t let Austin’s increasing home prices scare you away. The increase is not from inflation but from supply and demand. Austin’s growing job market means more jobs, more people and more visitors. Austin isn’t considered to be in a real estate bubble because the demand is consistently high and inventory is tight. This is good news for investors because you can expect steady activity and flow of people.
Are you an Airbnb Austin host? What has your experience been like? Do you have a property in Austin but live elsewhere? What tips do you have?