Evelyn Vallin, REALTOR®Team Price Real Estate

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If you own a house here, or plan to buy one

The short-term rental play, and what decides it here

The mechanics are the same anywhere, and I have linked the IRS source for each one. The four questions after them are the ones that decide whether a Central Texas house can be a short-term rental at all.

What counts as a short-term rental?

An average guest stay of under seven days. In practice: nightly and weekly bookings, a furnished house, and a calendar somebody is actively managing.

Why does the difference matter?

A long-term rental is passive by default. A short-term rental you are genuinely running may not be. That turns on facts about you, not about the house, which is why it is worth understanding before you shop.

Disclaimer: I am a REALTOR®, not a CPA, and nothing on this page is tax advice. These are the rules as the IRS publishes them, linked so you can read them yourself. Whether any of them reach you depends on your situation, and only your own tax advisor can tell you that. Ask them before you count on a single line of it.

The four mechanics people are actually talking about

In plain English, with the IRS source on each.

01 · The one about you

Material participation

A test of how involved you really are. The IRS sets specific hour thresholds for it, and they are written out in Pub 925. This is the piece people assume and then cannot document, so keep a real log from day one.

IRS Pub 925 ›

02 · The one about the building

Cost segregation

Appliances, flooring, fixtures and land improvements do not wear out on the same schedule as the structure. Separating them can move deductions earlier instead of spreading everything across decades.

IRS Pub 946 ›

03 · The one that keeps changing

Bonus depreciation

Lets some of those pieces be deducted faster in the first year. The percentage has changed more than once and depends on when the property was acquired, so I am deliberately not printing a number. Ask your CPA for your year.

IRS Pub 946 ›

04 · The one about the clock

Placed in service

Nothing starts until the property is ready and available to rent. Closing is not the finish line, and this is the one that quietly decides which tax year you land in.

IRS Pub 527 ›

Working backwards, so the calendar does not beat you

Step 04 is the one the tax year cares about, and the gap back to step 01 is longer than most people plan for.

  1. 01

    Under contract on the right house

    Licensing, HOA and numbers checked before you write the offer, not during the option period while the clock runs.

  2. 02

    Closed

    A financed purchase here generally runs 25 to 35 days from accepted offer, assuming the appraisal and the loan behave.

  3. 03

    Furnished, photographed and live

    Beds, linens, kitchen, wifi, locks, photos, listing written. Weeks, not a weekend, and longer if anything is on backorder.

  4. 04

    The property is earning

    A real guest on the calendar. Until then it is a house you own, not a short-term rental.

    Count the four backwards from the end of the year and you land in the fall. Same every year.

The part a national article will not tell you

Four questions that decide it here, before any tax math matters

01 · Ask first

Can this property be licensed at all

Rules are set city by city, and Austin, Round Rock, Georgetown, Cedar Park and unincorporated county land do not treat them the same. Two houses fifteen minutes apart can land on opposite sides of this. First thing I check on any address you send me.

02 · Hiding in the documents

What the HOA says

A city can allow it and the HOA can still prohibit it, or set a minimum lease term that makes nightly stays impossible. It is in the recorded documents, not in the listing.

03 · Yours to remit

Hotel occupancy tax

Short stays carry state and local hotel occupancy tax you collect from the guest and remit. The booking platform may handle part of it. Knowing which part is still on you.

04 · The line people get wrong

No homestead cap

The cap that limits how fast a primary residence's taxable value can climb does not apply to an investment property. Underwrite the tax line on the assessed value, not on what the current owner pays. Texas does have a separate, temporary limit on non-homestead property: a different rule, with its own conditions.

Texas Comptroller: find your county appraisal district How the non-homestead cap works

You will not be doing this alone

With you through the purchase, and handed to the right people after

I am with you from the first set of numbers to the keys in your hand. Then I hand you to people who set up short-term rentals for a living, so the house is furnished, listed and earning instead of sitting there while you figure it out.

Two things, one email

The model now, and the houses as they come up

The model: rents, taxes, insurance, vacancy, furnishing, and the occupancy you need just to break even. Every assumption is a cell you can change.

Then, every couple of weeks: the Central Texas houses worth running through it, with the reason attached. If one does not hold up on its own numbers it does not go in.

I do not post the listings here. By the time you read a page they are stale; the email goes out while they are still active.

Send me both

Send me an address

Tell me the house you are looking at

Send an address or a budget and I will come back with the licensing, the real tax line, and whether the numbers hold. If they do not, I will tell you that too.

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