At 1836 Property Management, we've managed rental properties across Austin since 2006. In that time, we've helped hundreds of investors choose between short-term and long-term rental strategies — and the question we get most often right now is some version of: is Airbnb still worth it, or should I just find a long-term tenant?
It's a fair question, and the 2026 Austin market makes it more complicated than it used to be. Long-term rents have softened more than 7% year-over-year. The short-term rental market has over 14,000 active listings. And starting July 1, 2026, the City of Austin will begin pulling unlicensed STRs from platforms like Airbnb and Vrbo entirely. This change drastically changes the risk profile for a lot of investors.
In this guide, we break down what both strategies actually earn in Austin right now, what they actually cost after platform fees, cleaning, licensing, and management, and which one tends to win based on your property type and goals. We'll also cover the one factor most comparisons ignore completely: what your time is worth.
If you're evaluating a rental property in Austin, or reconsidering a strategy you're already running, this is the analysis we walk our clients through every day.
The Raw Numbers: What Each Strategy Earns in Austin
Start with the data, because the headline figures surprise most owners who haven't looked recently.
Short-term rental (STR), 2025–2026:
A typical Austin STR generates between $33,500 and $41,000 in gross annual revenue, depending on the property and how actively it's managed. Median occupancy sits around 57–62%, with an average daily rate of $180–$225 per night. That works out to roughly $2,800–$3,200 per month — but with significant seasonal swings.
March is the strongest month by far, driven by SXSW. Occupancy hits nearly 68% and monthly revenue can push past $3,600 for a well-positioned listing. January, by contrast, is the worst month. Occupancy can fall below 40%, and revenue often drops under $2,100.
Long-term rental (LTR), March 2026:
The median rent across all Austin property types sits at $1,779 per month, according to Zumper. For single-family homes, Zillow puts the average closer to $2,095. A three-bedroom house typically rents for $2,200–$2,500 per month depending on location and condition, with suburban markets like Round Rock and Cedar Park running slightly lower.
On paper, the STR looks like the obvious winner — $3,000+ per month versus $2,200. But gross revenue is not profit. That's where most comparisons go wrong.
What the Gross Revenue Gap Actually Hides
Running an Airbnb is a hospitality business. Running a long-term rental is a real estate investment. The costs look completely different.
STR operating costs:
- Furnishing: A properly staged 3-bedroom STR requires $8,000–$15,000 upfront in furniture, linens, kitchenware, and décor.
- Cleaning: At $100–$175 per turnover, with potentially 15–25 turnovers per month in peak season, cleaning alone can run $1,500–$4,000/month.
- Utilities: Hosts cover electricity, water, and internet. For an active STR, expect $350–$600/month — costs tenants pay themselves in a long-term lease.
- Platform fees: Airbnb takes roughly 3% of each booking.
- Supplies and restocking: Toiletries, paper products, coffee, and consumables add $100–$300/month for a well-reviewed listing.
- Dynamic pricing software: Tools like PriceLabs or Wheelhouse — strongly recommended in Austin's seasonally complex market — run $20–$100/month.
- Licensing: Austin's Type 2 STR license costs $836.30 annually, with renewal required and potential inspection costs on top.
- STR property management: If you outsource, expect 20–30% of gross revenue — roughly $7,000–$12,000/year on a typical Austin STR.
LTR operating costs:
- Vacancy: In Austin's current renter-favorable market, expect one to two months of vacancy at turnover — roughly $2,200–$4,500 in lost income.
- Leasing fee: Most property management companies charge one month's rent when placing a new tenant.
- Maintenance: Lower frequency than STR, since long-term tenants treat the property as a home. Typical maintenance runs $1,500–$3,000/year for a well-maintained single-family home.
- Property management: 8–12% of monthly rent, compared to 20–30% for STR management.
When you run those numbers on a typical Austin 3-bedroom, the gap narrows considerably:
| STR | LTR | |
|---|---|---|
| Gross annual revenue | ~$38,000 | ~$27,600 |
| Estimated annual operating costs | $14,000–$18,000 | $4,000–$7,000 |
| Estimated net income | $20,000–$24,000 | $20,600–$23,600 |
For many Austin properties, the strategies come out roughly even on net income. The STR just requires significantly more work to get there.
Austin's STR Regulations Just Changed
This is something that isn't getting nearly enough coverage. The regulatory environment for Austin short-term rentals shifted significantly in 2026, and the most important change hits July 1st.
Starting July 1, 2026, the City of Austin will begin notifying Airbnb and Vrbo of unlicensed listings and requesting their removal. For the first time, enforcement has real consequences. An unlicensed STR can be pulled from the platform entirely.
Austin has three STR license types:
- Type 1 — Owner-occupied. You live at the property and rent it out when you travel, or rent a portion while you're home. The simplest and least expensive to maintain.
- Type 2 — Non-owner-occupied, single-family. This covers most investment property STRs. The $836.30 annual fee applies here, along with more oversight.
- Type 3 — Commercial or multi-unit. The most restrictive category.
A few rules that frequently catch investors off guard:
An individual operator may run up to two STR units on a single site. Additional properties are allowed, but must be at least 1,000 feet apart from each other. Your designated local STR contact must also live within the Austin Metro Area — meaning you can't manage an Austin STR remotely without a local representative on the ground.
The rules also vary significantly across the municipalities 1836 serves. The Hills has strict HOA guidelines governing STRs. The Village of Volente prohibits them entirely without a Conditional Use Permit, which requires public hearings and a City Council vote — with no guarantee of approval. Westlake Hills requires that STR permit holders own a primary residence in the city.
The bottom line: betting on lax enforcement is no longer a viable strategy. An unlicensed Austin STR has a hard shutdown date if you're not compliant before July 1.
Austin's Event Economy: The Strongest Case for STR
That said, one thing makes Austin genuinely different from most U.S. STR markets — the event calendar.
Three anchor events drive outsized revenue for well-positioned properties:
SXSW (March) is the single strongest revenue period of the year. Occupancy hits 67–68% market-wide. Top-performing listings in walkable neighborhoods near downtown or East Austin can run at 90–100% for the full two-week festival. Nightly rates routinely spike to $300–$500 for mid-range properties.
Austin City Limits (October) creates a strong second peak. Average daily rates in October have been tracked as high as $377 — making it one of the most valuable months on the calendar.
Formula 1 U.S. Grand Prix (November) has become a reliable third revenue spike, particularly for properties in South Austin and near the Circuit of the Americas.
Owners who actively manage pricing around these three windows can meaningfully outperform median STR numbers. The top 10% of Austin listings command $550 or more per night during peak periods.
The important counterweight: January and February are genuinely difficult. Even well-managed listings often earn less during those months than a long-term tenant paying fixed rent. A realistic STR cash flow model has to include reserves for the slow months — not just projections from peak season.
Which Strategy Fits Which Investor?
After working through the numbers, the decision usually comes down to a few clear factors.
STR tends to work better when:
Your property is in a high-demand Austin neighborhood — East Austin, South Congress, Bouldin Creek, or anywhere with strong walkability and proximity to event venues. STR revenue in suburban markets rarely justifies the operational overhead.
You're willing to be an active operator, or willing to pay 20–30% to someone who will be. The Austin STR market has matured. Passive, set-it-and-forget-it hosting consistently underperforms.
You have the upfront capital and cash reserves. Furnishing, licensing, and surviving a slow January all require liquidity that long-term rental doesn't demand.
Your property is already licensed — or you can get it licensed before July 2026.
LTR tends to work better when:
You own in a suburban market. Round Rock, Cedar Park, Georgetown, Leander, and Pflugerville have strong long-term renter demand driven by major employers and good school districts. The long-term model fits the renter profile in those areas far better than STR.
You're an out-of-state investor. The local contact requirement for STR licensing adds real friction and cost for remote owners. A professional LTR property manager handles everything without requiring a local liaison.
You want predictable income without building a side business. As the net income table shows, the cash flow difference between a well-run LTR and a typical STR is often smaller than it appears — and the LTR requires a fraction of the ongoing attention.
You're holding for long-term appreciation rather than maximizing current yield. In that case, tenant stability and operational simplicity usually serve the overall investment better.
The Factor Nobody Accounts For: Your Time
This is the variable that almost every Airbnb-vs-LTR comparison skips — and it arguably matters more than the revenue difference.
Running an Austin STR properly means monitoring and adjusting nightly rates, responding to guest inquiries often within an hour, coordinating cleaning between each booking, managing supply inventory, handling reviews, and occasionally dealing with a guest issue at 11pm. Realistically, that's five to ten hours per week for an owner-managed property.
At $50 per hour, seven hours per week equals $18,200 per year in time cost. That number doesn't appear in your Airbnb dashboard, but it absolutely affects whether the strategy is worth it.
If you enjoy the hospitality side and have the bandwidth to run it well, the math can work — especially if your property is positioned to capture all three major event peaks. But if what you want is passive real estate income, the real comparison is STR net income minus your time cost versus LTR net income with a professional manager handling everything. On those terms, long-term rental wins more often than the gross revenue numbers suggest.
What to Do Next
Both strategies can work in Austin. The right one depends on your specific property, your neighborhood, and your goals as an investor.
The most useful starting point is a property-specific rental analysis that models both scenarios using real Austin market data. At 1836 Property Management, that analysis is free.
Get your free rental analysis →
Already managing a portfolio? Our REI Monitor tool gives you real-time visibility into return on equity, occupancy trends, and market benchmarks — so this decision becomes data-driven instead of speculative.
1836 Property Management is a full-service Austin property management company serving residential and commercial investors across the greater Austin area. We've been managing rental properties in Central Texas since 2006.
