SXSW lets Austin homeowners cash in
Aman Jain and his wife Claire rented out their three-bedroom home in Austin for $900/night. Because SXSW lasts a week, that rent will cover about two mortgage payments.
Kai Ryssdal: The South by Southwest Festival in Austin, Texas, has turned over from technology to movies and music for the rest of the week. The clubs and cafes on 6th Street are going to be jammed, I'm sure.
And when the partying finally ends, all those people are going to need a place to rest their weary heads. Which is what homeowners near downtown are calling a business opportunity.
Kate Archer Kent of Red River Radio reports.
Kate Archer Kent: It's an enviable problem. Hundreds of thousands of people descend on your city, and where will they all bunk up? We asked some South by Southwest attendees.
Tiago Reiter: My name is Tiago Reiter. I'm from Brazil. I rented this apartment from a friend of a friend.
Tara Berkowsky: Tara Berkowsky from Long Island. I'm staying at the W Hotel. The W Hotel costs about $700 a night.
Emma Feigenbaum: My name's Emma Feigenbaum. I'm from New York. I'm staying at Airbnb. I think it's about $150 a night, which is a steal around here.
You heard Emma just say Airbnb. It's one of the numerous websites used by Austin homeowners to rent out their homes. And they're definitely cashing in on South by Southwest. It's perfectly legal to do, by the way.
Twenty-seven-year-old Aman Jain owns a three-bedroom home. He negotiated $6,000 for a week's rent, and that will cover about two mortgage payments. Jain says he handed over the keys without trepidation.
Aman Jain: We went through the house rules, and told them about all the good restaurants; where to get the best margaritas. I mean it's definitely a risk, but we have all our neighbors watching them.
It just so happens that one of the biggest home rental companies is based in Austin. It's called HomeAway. Spokesman Victor Wang says an average rental goes for $200 per night. But a Super Bowl-type event can quickly drive up the market.
Victor Wang: Similar to hotels, during big events like South By Southwest the prices do go up. And the prices are generally dictated by supply and demand, and also what other homeowners are listing their homes in the surrounding areas.
The Jains work from home. They loaded up their car with their computers, a love bird and a box of family photos. Now they're back in Shreveport, La., both sleeping in their childhood bedrooms -- at peace.
Jain: The most important thing to us was what happens if they burn down our house? So we called our insurance company, and surprising to us, this is actually something that they cover.
South by Southwest organizers say the room shortages are an ongoing problem, but several new hotels are being built. Meanwhile, the Jains are eager to rent out their place again.
I'm Kate Archer Kent for Marketplace.