Waco Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Waco, Texas?

To start a short-term rental (STR) business in Waco, Texas, a license must be obtained from the Development Services department. The property must be within the city limits of Waco, and a Short-Term Rental Special Permit is also required prior to the issuance of a license12.

Starting a Short Term Rental Business in Waco

To launch a successful short-term rental (STR) business in Waco, Texas, follow these steps:

Ensure your property is within city limits: STRs are allowed only within the city limits of Waco3.

Obtain a Short-Term Rental Special Permit: Prior to issuing a license, you need to obtain a Short-Term Rental Special Permit1. The special permit process takes approximately 60-90 days1.

Apply for a short-term rental license: Apply for a license from the Development Services department1. The license application should include information such as a site plan, parking dimensions, and an evacuation plan for each sleeping area2.

Display the assigned license number and occupancy limit: Ensure that all licensed STR advertisements, marketing materials, and online listings prominently display the assigned license number and occupancy limit2.

Keep in mind that as of August 1, 2017, short-term rentals in Waco are subject to a combined 15% hotel occupancy tax, with 7% going to the City of Waco, 6% to the State of Texas, and 2% to McLennan County1.

Short Term Rental Licensing Requirement in Waco

In Waco, Texas, individuals looking to operate a short-term rental (STR) must adhere to specific licensing requirements. A short-term rental license is mandatory for legal operation5. The application process necessitates providing detailed information about the rental property, proof of ownership, floor plans, parking arrangements, and more5. Additionally, the property owner must reside on the premises and be present for the duration of any short-term rental1. The property may be rented out to multiple short-term tenants, but the owner must be physically present1.

Furthermore, a Short-Term Rental Special Permit is also required prior to the issuance of a license2. The purpose of these regulations is to establish procedures that ensure the rental use minimizes adverse impacts to surrounding properties and residential areas, and to guarantee the collection and payment of hotel occupancy taxes2.

Required Documents for Waco Short Term Rentals

To obtain a short-term rental (STR) license in Waco, Texas, you will need to provide specific documents and information.

The required documents include:

Proof of ownership: This can be a title or deed for the property in question2.

Floor plans: These should be detailed and accurate representations of the property's layout, including the locations of bedrooms, bathrooms, and other amenities2.

Site plans: These plans should show the property's location, including its relationship to surrounding properties and any shared facilities2.

Parking arrangements: This information should detail the parking spaces available for guests, including any parking garages or lots2.

Evacuation plans: Each sleeping area must have a clearly marked evacuation plan in case of emergencies5.

In addition to these documents, all licensed STR advertisements, marketing materials, and online listings must prominently display the assigned license number and occupancy limit1.

Waco Short Term Rental Taxes

When operating short-term rentals in Waco, Texas, it is important to be aware of the applicable hotel occupancy taxes. As of August 1, 2017, short-term rentals are subject to a combined 15% hotel occupancy tax, with 7% allocated to the City of Waco, 6% to the State of Texas, and 2% to McLennan County26.

This tax is imposed on the occupant of any room or space provided by the rental, and the revenue derived from it is utilized to promote tourism and convention activities5. Both the city and county have contracted with Avenu to collect the hotel occupancy tax, and there is no additional cost to operators to use this service. Avenu can assist short-term rental operators with setting up their account and payment of back taxes. Their toll-free customer support phone number is 1-877-693-44352.

It is essential for operators to set up an online account to pay the respective city, county, and state hotel occupancy taxes1. These taxes are a crucial consideration for individuals looking to venture into the short-term rental market in Waco, and compliance with the tax regulations is a legal requirement for operating within the city6.

Texas wide Short Term Rental Rules

Texas has minimal state-level regulations for short-term rentals (STRs), allowing city governments to determine their own laws and regulations3. The state relies on a general definition of a short-term rental, which is any residential property rented for a period not longer than 30 consecutive days1. However, Texas does not impose any state-level regulations and limitations, leaving it up to local county and city authorities to impose laws that regulate STRs3.

Local Regulations in Texas Cities

While the state of Texas does not have a specific requirement for special permits for STR businesses, some cities within the state have implemented their own regulations. For example, in Austin, owners of vacation rental properties need to obtain an operating license for all properties, including rooms and guest houses that are rented out for short-term stays3. In Waco, a license must be obtained from the Development Services department, and in some cases, a special permit is required5.

Does Waco strictly enforce STR rules?

Short-term rental (STR) regulations in Waco, Texas require a license from the Development Services department and a Short-Term Rental Special Permit in some cases1. The property must be within the city limits of Waco, and all licensed STR advertisements, marketing materials, and online listings must prominently display the assigned license number and occupancy limit1.

As of August 1, 2017, short-term rentals in Waco are subject to a combined 15% hotel occupancy tax13. The city recently adopted on a permanent basis the prohibition of Type II and Type III STRs in residential districts2.

How to Start a Short Term Rental Business in Waco?

Short-term rental (STR) regulations in Waco, Texas require a license from the Development Services department and a Short-Term Rental Special Permit in some cases1.

The property must be within the city limits of Waco, and all licensed STR advertisements, marketing materials, and online listings must prominently display the assigned license number and occupancy limit1. As of August 1, 2017, short-term rentals in Waco are subject to a combined 15% hotel occupancy tax13. The city recently adopted on a permanent basis the prohibition of Type II and Type III STRs in residential districts2.

To start an STR business in Waco, individuals must obtain a Short-Term Rental Special Permit and a short-term rental license from the Development Services department1. The initial application for an STR license should include a site plan showing the property and required parking, dimensions of the parking space, and an evacuation plan for each sleeping area1.

Here are the steps to start a STR business in Waco:

1. Choose a property that allows short term rentals based on zoning
2. Apply for a short term rental license
3. Register with the Waco Convention & Visitors Bureau for marketing
4. Collect and pay hotel occupancy taxes

Who to contact in Waco about Short Term Rental Regulations and Zoning?

For questions on short term rental regulations and zoning in Waco, contact the Waco Planning Department:

• Email: planning@wacotx.gov
• Phone: (254) 750-5650

What do Airbnb hosts in Waco on Reddit and Bigger Pockets think about local regulations?

Comments from Waco hosts suggest regulations can make short term rentals difficult but not impossible if one understands the rules. Some hosts use zoning loopholes or have grandfathered pre-existing rentals. Enforcement action is rare but does happen, so following regulations is recommended.

According to a guide for Airbnb hosts in Waco, the city does enforce its short-term rental regulations, and the city council voted in 2021 to prohibit future short-term rentals in certain zoning areas1. Some Airbnb hosts in Waco have reported that regulations can make short-term rentals difficult, but enforcement action is rare1.

However, some hosts use zoning loopholes or have grandfathered pre-existing rentals1.The Waco MLS does not allow realtors to specifically identify properties that are functioning short-term rentals, and the short-term rental buying process has become finding a needle in a haystack5.

Despite this, demand for short-term rentals in Waco continues to stay strong, and the city ranks high in investability scores5.