Short-Term Rentals in Waco, TX: What Residents Actually Need to Know

If you live in Waco or are thinking about moving there, short-term rentals are one of those things you probably won't think about until they affect you directly. Waco has 6 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.

Insurance Requirements

Waco's STR ordinance (Chapter 13, Article VIII) does not set a specific minimum liability insurance dollar amount for short-term rental licensing. Standard homeowners policies typically exclude commercial rental activity, so STR-specific liability coverage is strongly recommended.

Key details: City Minimum: Not set in ordinance. Homeowners Policy: Typically excludes STR use. Airbnb AirCover: Up to $1M host liability. Vrbo Liability: Up to $1M per occurrence. Code Reference: Ch. 13, Art. VIII Secs. 13-470/471.

While Waco does not cite a fixed insurance minimum, operating without coverage exposes hosts to uninsured liability for guest injuries, property damage, and fire losses. HOA, condominium, and mortgage covenants frequently require named-peril or commercial liability coverage, and breach can trigger separate civil enforcement.

Waco is more permissive than most cities when it comes to insurance requirements. That said, there are still limits.

Occupancy Limits

Waco caps STR occupancy at 2 adults per bedroom plus 2 additional adults per rental unit. In R-E, R-1A, R-1B, and R-1C residential zones, no more than 4 unrelated individuals may occupy an STR Type I/II or BBHE at any time.

Key details: Per-Bedroom Cap: 2 adults per bedroom + 2. Unrelated Persons Cap: 4 in R-E/R-1A/R-1B/R-1C. BBHE Guest Rooms: Max 5. B&B Inn Guest Rooms: Max 15. Listing Disclosure: License # and limit required.

Operating over the posted occupancy limit, exceeding the 4-unrelated-person cap in R-E/R-1A/R-1B/R-1C zones, or failing to display the license number and occupancy limit in listings can trigger code enforcement, citations, and license revocation. Repeat violations may bar future license renewals.

Permit Requirements

Waco requires short-term rental operators to register with the city and obtain necessary permits before operating. STRs must comply with building, fire, and zoning codes.

Key details: Registration: Required. Definition: Under 30 consecutive days. Hotel Tax: Required. Local Contact: Required.

Fines up to $500 per day of violation. City may issue cease-and-desist orders for unpermitted operations.

This is one of the stricter rules in Waco's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Noise Rules

Short-term rental guests in Waco must comply with the city's noise ordinance. Operators are responsible for ensuring guests do not disturb neighbors, particularly during nighttime hours.

Key details: Quiet Hours: 10 PM–7 AM. Operator Responsibility: Must inform guests. Complaints To: Waco PD. Permit Risk: Revocation possible.

Noise violations are Class C misdemeanors with fines up to $500. Repeated complaints may lead to STR permit revocation.

Taxes & Fees

Waco requires short-term rental operators to collect and remit hotel occupancy tax (HOT) on all stays under 30 days. The combined state and local rate applies to all STR bookings.

Key details: State Hotel Tax: 6%. Local HOT: Applies. Registration: City + TX Comptroller. Filing: Monthly/quarterly.

Back taxes plus penalties and interest for non-collection. Additional fines up to $500 per violation. State comptroller may also pursue enforcement.

This is not one of those rules that cities tend to ignore. Waco actively enforces its taxes & fees requirements.

Parking Rules

Waco requires short-term rental properties to provide adequate off-street parking for guests. Overflow parking on residential streets must comply with the city's street parking ordinances.

Key details: Off-Street Parking: Required. Street Parking: City rules apply. Guest Info: Operator must provide. Permit Zones: Guests must comply.

Parking violations subject to fines starting at $30. Repeated parking issues from an STR may affect permit status.

The Bottom Line

Waco is tougher than many cities when it comes to short-term rentals. Out of the 6 rules covered here, 2 are rated strict. If you are a homeowner, renter, or business owner in Waco, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.

Keep in mind that Waco can amend these rules at any council meeting. For the most current version of any rule mentioned here, check the specific ordinance page, where we track updates as they happen.