Should You Rent Out Your Old Austin Home Instead of Selling It?

I'm James Brinkman, and I hear this question a lot, usually from someone who's about to move out of a house they've owned for decades. Sometimes it comes from a grown son or daughter who's helping a parent plan the move.

Here's my short answer. Renting out your old Austin home can work, but only if the numbers work and you actually want to be a landlord. Plenty of people keep the house because selling feels final. That feeling is real, but it isn't a business plan.

You don't need to settle. You need a plan. Here's how I'd think it through.

Here's what's really happening. Austin built a lot of housing, and rents came down. A Pew Charitable Trusts analysis found the city's median rent fell from $1,546 in December 2021 to $1,296 in January 2026.

The slide kept going into 2026. KUT reported that Realtor.com data put Austin's median asking rent at $1,357 in February 2026, down more than 7% from a year earlier.

Those figures lean heavily on apartments, so they won't tell you exactly what your three-bedroom house would rent for. They do tell you the direction. Your house competes with a lot of newer apartments that have been cutting prices to fill units. RealPage reported that all 16 of Austin's apartment submarkets saw rent declines in the year ending October 2025.

There's a flip side. RealPage also expects new apartment completions in Austin to drop sharply in 2026, which could ease some of that pressure over time. I wouldn't bet the house on a rent rebound, though. I'd want a plan that works at today's rents.

Anyone can unlock a door. Being a good landlord is a different job. Many homes in established neighborhoods like Northwest Hills and Great Hills have been standing for decades. That often means older roofs, older air conditioners and older plumbing.

When you live in the house, you can nurse a tired AC unit through one more August. A tenant can't, and shouldn't have to. Repairs stop being someday projects and become this-week problems.

Here are the costs I'd plan for before signing anything:

• Vacancy. Every month the house sits empty, you still carry the taxes, insurance and utilities with no rent coming in.
• Turnover. Paint, cleaning and small fixes add up between tenants.
• Insurance. A home you rent out usually needs a different policy than the one you carry now. Your insurance company can tell you what changes.
• Management. You can hire a property manager or handle it yourself. Either way, someone has to answer the phone when the water heater quits on a Sunday.
• Distance. If you're moving out of state, a roof leak in Austin gets a lot harder to deal with.

My dog Cooper has strong opinions about squirrels. My opinion about landlording is simpler. If the thought of tenant calls makes your stomach tighten, that's useful information.

This is the part people miss most. I'm not a tax advisor, so please run your situation by a CPA. Here's what the public sources say.

Your homestead exemption. The Travis County Tax Office says the general homestead exemption requires the home to be your primary residence as of January 1 of the tax year. It also says you can't claim another homestead at the same time. Once you move and claim a new homestead, the old house loses that break, and its tax bill can go up. If you're 65 or older, ask the Travis Central Appraisal District how a move affects any additional exemptions you have.

The federal home sale exclusion. IRS Publication 523 explains that many owners can exclude up to $250,000 of gain on the sale of a main home, or up to $500,000 for married couples filing jointly. To qualify, you generally need to have owned the home and lived in it for at least two of the five years before the sale.

Here's why that matters. If you've owned your house for 30 years, you may be sitting on a large gain. If you move out and rent it for more than about three years, you may no longer meet that two-out-of-five rule. A rental that felt like a safe middle step can turn into a bigger tax bill later. Your CPA can walk you through it before you sign a lease.

Renting can make sense when:

• The rent you can realistically get covers your costs with room to spare.
• You have cash set aside for a big repair.
• You live close enough to handle problems, or you're happy to pay someone who does.
• You've talked through the tax side with a CPA and you're comfortable with it.
• You'd truly enjoy owning a rental. Some people do.

Selling often makes more sense when:

• You need the equity for your next home or for care costs.
• The house needs big updates before anyone would rent it.
• You're moving far away.
• The two-out-of-five clock matters a lot for your tax picture.
• You'd rather spend Saturdays at a taco truck than at a hardware store.

The market matters too. KXAN reported that Unlock MLS showed 5.4 months of inventory for the Austin metro in September 2026, with homes spending an average of 73 days on the market. That's roughly a balanced market. It doesn't mean you can't sell well. It means pricing and preparation count for more than they did a few years ago.

Some owners plan to rent for a while and sell once rates drop. Maybe that works. Just remember that mortgage rates are quick to go up and slow to come down, so I wouldn't build a plan around timing them.

I like a good spreadsheet. When someone asks me this question, I build two simple pictures side by side.

The first shows what the house could likely sell for today, based on recent sales near you. The second shows what it could likely rent for, minus the costs above. Then you look at both and decide what fits your life.

Keeping the house is a fine answer for some people. Others see the numbers and feel relieved to sell. If selling wins, you can see how I handle it on my process page. If you're curious what's on the market now, my listings page is a good place to start.

Austin changes fast, and your plan should fit your life rather than last year's headlines.

If you're weighing this right now, send me a note and tell me about the house. I'll help you run the numbers. No pressure. Just perspective.

When you think real estate, think Brink.