How to Start an Airbnb in Texas: Simple Steps

Texas is a great place for short-term rentals. Many Airbnb hosts earn strong rental income and high ROI, encouraging more people to join the market. To start an Airbnb in Texas, it's important to know the legal requirements, choose the right location, set competitive rates, and provide a great guest experience. Taking the right steps will help increase bookings and ensure long-term success.

Are Airbnb’s in Texas Profitable?

As of January 31, 2025, the average home value in Texas is $298,511, reflecting a slight 0.1% decrease over the past year, according to Zillow. This relatively affordable real estate market and strong tourism and business travel make Texas lucrative for Airbnb investments. 

According to available data, Texas is one of the top-performing states for Airbnb hosts, with significant earnings across both urban and rural areas. In 2021, Airbnb reported that new hosts in Texas collectively earned around $170 million, ranking the state third in the nation for new host earnings. 

Earnings vary by location, with Airbnb hosts in rural Texas counties earning over $115 million in 2021, and the typical rural host making nearly $12,000 annually. Additionally, data from 2024 indicates that Airbnb hosts in Houston and Austin earned average annual revenues of $25,000 and $36,000, respectively.

Several factors contribute to Airbnb profitability in Texas:

• High demand – Texas attracts millions of visitors each year for business, tourism, and events, keeping short-term rentals in demand.
• Strong markets – Major cities like Austin, Dallas, Houston, and San Antonio have thriving Airbnb markets due to concerts, conferences, and festivals.
• Diverse rental options – From urban apartments to suburban homes and vacation properties, Texas offers a variety of Airbnb-friendly locations. 
• Flexible pricing strategies – Dynamic pricing allows hosts to adjust rates based on demand, maximizing revenue during peak seasons and events.
• Lower cost of living – Compared to other states, Texas has relatively affordable real estate, making property acquisition and maintenance more cost-effective.
• No state income tax – Hosts can keep more of their earnings, increasing overall profitability.
• Guest experience matters – Well-maintained properties with great amenities and high ratings can charge premium rates and attract repeat guests.

Selecting a Location in Texas

Choosing the right location is key to running a successful Airbnb in Texas. Different areas attract different types of guests, so selecting a spot that aligns with demand can maximize occupancy and profits.

Here are some factors to consider:

• Tourist and business demand – Areas with consistent visitor traffic tend to have higher occupancy rates.
• Local Airbnb regulations – Some cities have zoning laws or permit requirements for short-term rentals—research local rules before investing.
• Seasonality – Coastal and vacation areas may have peak seasons, while urban centers offer year-round bookings.
• Property prices and taxes – Consider affordability, property taxes, and potential returns before purchasing a rental.
• Proximity to attractions – The closer a property is to major attractions, the higher the demand and nightly rate.

Airbnb Regulations in Texas

Once you’ve chosen a location, the next step is understanding the short-term rental (STR) regulations in that area. According to the State of Texas, an STR is defined as any residential property rented out, fully or partially, for a fee for a period of no more than 30 consecutive days. These properties include single-family homes, condo units, co-ops, and timeshares.

While some Texas cities impose their own restrictions on vacation rentals, the state does not require a state-level license to operate an Airbnb. However, there are a few statewide requirements that all hosts must follow:

1. Register with the Texas Comptroller’s Office
2. Pay the state hotel occupancy tax (6%)
3. Pay any applicable local lodging taxes

Here are some additional rules to consider:

• Homeowners Associations (HOAs) – Some HOAs restrict or prohibit STRs, so it’s important to check HOA guidelines before listing a property.
• Safety Requirements – Many cities require safety features such as smoke detectors, fire extinguishers, and emergency exit plans.
• Guest Limits and Noise Ordinances – Some local governments set occupancy limits and enforce noise regulations to maintain community standards. For example, Austin restricts occupancy to no more than 6 adults in certain properties.
• Zoning Restrictions – Some cities classify short-term rentals into owner-occupied (Type 1) and non-owner-occupied (Type 2), restricting the latter in residential areas. For example, Houston has no citywide restrictions but enforces HOA and neighborhood regulations.

Airbnb Regulations in Texas (By City)

Since regulations vary by city and county, it’s essential to check with local municipalities before starting an Airbnb in Texas. Ensuring compliance with local laws helps avoid penalties and ensures a smooth rental operation.

Airbnb Licensing and Permits in Texas

Once you understand the regulations, the next step is to register your Airbnb. In Texas, short-term rental (STR) permits are set at the city level, as there is no statewide licensing requirement for operating an Airbnb. 

However, all STR operators must register with the Texas Comptroller’s Office to obtain a permit for collecting and remitting the state hotel occupancy tax. Since permit and licensing requirements vary by city, it’s important to check local regulations before listing your property.

Short-Term Rental Permits

Some cities require hosts to obtain a permit or license before listing a property on Airbnb:

• Austin – Requires a Short-Term Rental (STR) license, which must be renewed annually.
• Dallas – Limits STRs to certain zoning areas and requires registration with the city.
• San Antonio – Mandates a permit for rentals operating for fewer than 30 days at a time.
• Houston – Does not require a specific STR permit but enforces zoning and building code compliance.
• Fort Worth – STRs are only allowed in designated zoning districts, and registration with the city is required.

Taxes and Fees

• Texas imposes a 6% state hotel occupancy tax on all short-term rentals.
• Many cities, including Dallas and Houston, have additional local hotel taxes ranging from 7% to 9%.
• Airbnb automatically collects and remits taxes in most Texas cities, but hosts should verify local tax obligations with their municipality.

Furnishing Your Airbnb in Texas

Now it’s time to create a comfortable and inviting space that attracts guests and earns positive reviews. A well-furnished Airbnb enhances the guest experience and allows you to charge higher rates.

Essentials for Every Airbnb

• Quality bedding & linens – Comfortable mattresses, fresh sheets, and extra pillows enhance sleep quality.
• Functional furniture – A cozy sofa, dining table, and workspace cater to various guest needs.
• Fully equipped kitchen – Stock with essentials like cookware, utensils, and basic pantry items.
• Fast wifi & smart TV – High-speed internet and streaming options improve guest satisfaction.
• Thoughtful extras – Local guidebooks, coffee, toiletries, and charging stations add value.

Texas-Specific Considerations

• Climate control – Provide reliable air conditioning, ceiling fans, and heating for year-round comfort.
• Outdoor spaces – If available, furnish patios or balconies with seating and lighting for added appeal.
• Durable materials – Choose easy-to-clean, heat-resistant furniture and décor suited for Texas weather.

Airbnb Insurance Options in Texas

Protecting your Airbnb with the right insurance is essential to safeguard against risks like property damage, liability claims, and guest injuries. Airbnb AirCover provides $3 million in liability coverage and $1 million in damage protection, but it may not fully cover all incidents. To ensure comprehensive protection, consider these additional insurance options:

• Short-term Rental Insurance – Providers like Proper Insurance, Steadily, and Slice offer specialized policies designed for short-term rentals, covering both property and liability.
• Landlord Insurance – Standard rental property insurance may not include short-term stays, so it's important to confirm coverage details with your provider.
• Homeowners Insurance Add-ons – Some insurers offer short-term rental endorsements, but traditional homeowners insurance typically excludes Airbnb rentals.

Getting Your Airbnb Listed

Once your Airbnb is furnished and insured, the next step is creating a compelling listing that attracts guests. A well-optimized listing increases visibility, boosts bookings, and helps maximize your rental income.

Here are steps to list your Airbnb successfully:

1. Create an Airbnb account – Sign up on Airbnb.com, provide necessary details, and complete identity verification.
2. Add property details – Accurately describe your location, number of guests, amenities, and house rules to set clear expectations.
3. Upload high-quality photos – Professional, well-lit images showcasing your space help grab attention and increase bookings.
4. Set competitive pricing – Research similar listings in your area and use Airbnb’s Smart Pricing tool to adjust rates based on demand.
5. Write a compelling description – Highlight unique features, nearby attractions, and what makes your Airbnb stand out.
6. Enable instant booking – This feature allows guests to book immediately, increasing your chances of getting reservations.
7. Set house rules and policies – Clearly define check-in/out times, pet policies, and any restrictions to avoid misunderstandings.
8. Publish and promote – Once listed, promote your Airbnb through social media, travel forums, and repeat guest incentives.

Greeting Your First Guests in Texas

Everything is set, and now it’s time to welcome your first guests. A great first impression can lead to positive reviews and repeat bookings, making your Airbnb more successful. By following these steps, you’ll ensure a smooth check-in experience and create a warm, welcoming atmosphere for your guests.

1. Confirm check-in details – Send a message before arrival with clear instructions on accessing the property, Wi-Fi details, and other important information.
2. Prepare the space – Ensure the property is clean, well-stocked, and guest-ready. Fresh towels, toiletries, and a welcome note add a personal touch.
3. Offer a local guide – Recommend nearby restaurants, attractions, and activities to enhance your guests’ stay.
4. Be available but not intrusive – Let guests know how to contact you for any questions or concerns, while still respecting their privacy.
5. Check-in follow-up – A quick message after arrival to ensure everything is going well makes guests feel valued and improves their experience.

Bottom Line: Starting an Airbnb Business in Texas

Launching an Airbnb in Texas can be profitable with the right planning and execution. From choosing a prime location and understanding local regulations to furnishing your space and providing an exceptional guest experience, every step plays a crucial role in your success.

Texas offers high rental demand, affordable property options, and no state income tax, making it an attractive market for short-term rentals. With proper management and attention to detail, your Airbnb in Texas can generate steady income and long-term success.