While many Austin investors have found success in the short term rental (STR) space over the past decade, to truly maximize your STR investment it’s worth considering tapping into the demand for event spaces. By owning a short term rental property where guests can host events, you not only cater to the steady influx of travelers but also open an additional revenue stream, making your investment more versatile and profitable. Here’s how you can navigate this opportunity and the challenges involved in finding the perfect property.
Unlocking Additional Revenue Streams
Owning a short term rental in Austin offers the potential for high returns, especially during peak tourism seasons and major events like South by Southwest (SXSW), Austin City Limits (ACL), and Formula 1. However, by allowing your property to double as an event space, you can significantly boost your income.
Increased Rental Rates: Event-ready properties can command higher nightly rates, especially for weekends and holidays. Event hosts are often willing to pay a premium for a venue that provides both accommodation and a picturesque setting for their gatherings.
Challenges in Identifying Event-Friendly Properties
While the benefits are clear, finding a property suitable for both STR and event hosting comes with its challenges. Here are key considerations to keep in mind:
Deed Restrictions: Most neighborhoods have deed restrictions that limit the type of activities that can take place on the property. It's crucial to review these restrictions before purchasing to ensure you can legally host events. Locating a copy of the deed restrictions for a given property can be equally challenging. You may be able to locate these using the county’s real property records search, or contact your favorite title company for help with locating the deed restrictions.
City Regulations: Austin has specific regulations regarding short-term rentals and event hosting. The city’s STR ordinance outlines various rules, including noise limits, occupancy limits, and permit requirements. Included among such rules in Austin’s STR Ordinance is the following:
A licensee or guest may not use or allow another to use a short-term rental for an assembly between 10:00 p.m. and 7:00 a.m.
A licensee or guest may not use or allow another to use a short-term rental for an outside assembly of more than six adults between 7:00 a.m. and 10:00 p.m.
For purposes of this section, an assembly includes a wedding, bachelor or bachelorette party, concert, sponsored event, or any similar group activity other than sleeping.
If you are looking at properties within a municipality's limits, you will want to familiarize yourself with STR regulations as well as zoning guides to avoid fines and legal issues.
Neighbor Relations: Hosting events can lead to noise and increased foot traffic, which might upset neighbors. Ensuring your property is in a community that is more tolerant of events or has a larger lot size so you can mitigate potential conflicts.
Parking and Accessibility: Events often mean more guests, which requires adequate parking and easy accessibility. Properties with ample parking space and convenient access are more desirable for hosting events.
Features of a Great Event Space
When considering a property that will be well-suited for hosting events certain features can enhance its appeal and functionality:
Spacious Layout: Open floor plans and large common areas are ideal for gatherings. Spaces that flow naturally from indoor to outdoor areas, such as through sliding glass doors or patios, are particularly appealing.
Outdoor Amenities: A well-maintained garden, deck, or pool area can significantly enhance the attractiveness of your property for events. Outdoor kitchens, fire pits, and shaded areas, or amazing views can also add value.
Entertainment Options: Providing entertainment amenities such as a sound system, large-screen TV, or a game room can make your property more attractive for parties and gatherings.
Privacy and Noise Control: Properties with good privacy from neighbors and natural sound barriers like thick foliage or fences can make event hosting more feasible and enjoyable for guests.
Should You Purchase an Event-Friendly Austin Area STR
Investing in a short term rental property in Austin that can also serve as an event space is a strategic move that can yield substantial financial rewards. While the process involves navigating deed restrictions, city regulations, and ensuring your property meets specific criteria, the potential for increased rental income and diversified clientele makes it a worthwhile endeavor. By selecting the right property and equipping it with desirable features, you can tap into the vibrant event demand in Austin and maximize your investment's potential. Want help finding a property where you can host events? Contact us today.
