Your Thoughts on Building a Guest House (Austin: apartments, rentals)

[G Grasshopper]

I am wondering about the market for and difficulties with having a small guest house on one's property, close to downtown Austin. I am talking about 2 bedrooms, small kitchen, etc., to use for one's own guests, but to rent out occasionally to others visiting Austin. Aside from housing your own guests, would building such a place be a good investment? Does the city make this type of small business easy, or is it fraught with difficulties?

[DeadInSuburbia]

Originally Posted by G Grasshopper

I am wondering about the market for and difficulties with having a small guest house on one's property, close to downtown Austin. I am talking about 2 bedrooms, small kitchen, etc., to use for one's own guests, but to rent out occasionally to others visiting Austin. Aside from housing your own guests, would building such a place be a good investment? Does the city make this type of small business easy, or is it fraught with difficulties?

I'm interested, if anyone finds out anything..I'd like a 2nd house to provide my parents a small place to move into in their old age.

[Biscuits]

It is my understanding that you can have a guest house of any size as long as the sum square footage of all structures does not exceed the .4 FAR under the McMansion regulations (or exceed the lot's impervious cover limit).

To be able to "legally" rent it, I believe the maximum square footage is 850 and I also seem to remember a parking space requirement.

[austin-steve]

Originally Posted by Biscuits

It is my understanding that you can have a guest house of any size as long as the sum square footage of all structures does not exceed the .4 FAR under the McMansion regulations (or exceed the lot's impervious cover limit).

To be able to "legally" rent it, I believe the maximum square footage is 850 and I also seem to remember a parking space requirement.

I think Biscuits is on track here. Many central homes have a garage with apartment above. 600 to 800 sqft feet is about the right size. The floorplans for such structures are easy to find on the internet.

As far as having guest space and what that's like, we had an upstairs guest quarters at our last house and really enjoyed being able to host guests and visitors. Our kid's school would frequently have guests from different places and since we lived 3 blocks from the school we would host them. We met people from Germany, England, Australia and other parts of the US. I adds an interesting dimension to life if you enjoy meeting people and learning about them and where they are from.

In our new house, we included guest space but haven't had many visitors yet. It's really just an extra bedroom and private bath and is essentially part of the main house. I sort of wish we had made it separate now, but the cost factor made it impractical.
Steve

[G Grasshopper]

Austin-Steve, I can really see your approach to visitors, and think that would be great. I'm sure we will do some of that if we end up doing this. If you also want to rent it from time to time, do you need to be registered somehow as a business? Is there any demand for day by day guest house rentals in downtown Austin? I am thinking of parents who are visiting their kid at UT but would rather have a little guest house than a motel, etc.

[austin-steve]

Is there any demand for day by day guest house rentals in downtown Austin?

I've had a few clients find homes/apartments to rent while in Austin, instead of a hotel. I think it falls under the vacation rental category and they found them on a website, though I don't know any more than that. I don't know if the activity is regulated in any way.

Steve

[Austin-Willy]

GG, if you are charging rent and will have strangers on your property, you may want to consider your liability for this "business." One thing you may want to do is confirm with your insurance rep. that your HO policy will cover you in this scenario. You may also want to consider setting up a limited liability entity (corporation, LLC, etc.) to protect your personal assets in the event someone is injured or files a lawsuit relating to your business.

[austin-steve]

Originally Posted by Austin-Willy

GG, if you are charging rent and will have strangers on your property, you may want to consider your liability for this "business." One thing you may want to do is confirm with your insurance rep. that your HO policy will cover you in this scenario. You may also want to consider setting up a limited liability entity (corporation, LLC, etc.) to protect your personal assets in the event someone is injured or files a lawsuit relating to your business.

I think the city might deem it to be a bed and breakfast operation. I agree about the liability and insurance issues. There is a lot to think about before setting up a for-profit operation like this.
seve