Two homes sitting side-by-side in the 700 block of Clay Avenue speak volumes about a South Waco neighborhood straining to meet demand for overnight lodging in the Magnolia Market era.

One has a shiny black mailbox to match the black wrought-iron fencing. The exterior has been up close and personal with a paintbrush. The windows boast energy-efficient touches, and the composition shingles are charcoal-colored and tidy. An ADT Security Systems logo is visible in the yard.

Next door, a cat scampers across a cement porch. The crumbling roof sags, and sheets of plywood conceal all entrances. Paint is only a rumor. Four signs say no trespassing, another says no parking, yet another says keep out.

Clearly, the owners of these residences have traveled different paths, but whether those paths eventually will cross remains the question.

From Franklin Avenue to Interstate 35, and from University Parks Drive to South 10th Street, a checkerboard pattern is emerging involving the haves and have-nots, those bucking the trend and those pursuing a buck by fixing up old and aging homes — in Chip and Joanna Gaines’ “Fixer Upper” fashion — and making them available as bed-and-breakfast or vacation rentals.

The city of Waco in 2018 issued 56 permits for such conversions, said Bobby Horner, a supervisor in the inspection services department.

“And I’m sure we’ll see plenty more in 2019. There seems to be no sign of stopping,” said Horner, speaking by phone Monday morning.

Marcus Clifford, 37, knows the feeling. A fire marshal in Houston, he travels weekly to South Waco to admire his investment at 625 S. Ninth St. and accumulate more sweat equity. Monday morning found him in the front yard, operating a miter box as he crafted wooden porch rails and handrails for the front steps to meet code requirements aimed at the disabled.

“The interior is practically done. Now I’m touching up the outside,” said Clifford, originally from Florida, who moved to Houston as a youngster. His wife, Kim Clifford, graduated from Baylor University and sells real estate in Houston. She and her husband, taking note of the Magnolia phenomenon, scouted Waco for homes before choosing the address on South Ninth Street.

Six-figure renovation

Clifford said he bought the roughly 2,000-square-foot house two years ago, and guesses he’s spent more than $100,000 to replace the roof, upgrade the wiring and plumbing, install foam insulation and give it a general makeover.

“That’s all material costs,” said Clifford, sporting a “Fill the Boot” cap. “I’ve done the work myself. If I came across something I wasn’t sure about, I looked it up on YouTube, or I Googled it. We probably would be out three times that much, at least twice that, if we were paying someone.”

Clifford said he’d rather not divulge what he paid for the home.

“I acquired it from a private individual,” he said. “Apparently grandma passed away, and the grandkids didn’t want the house. It was part of an estate.”

Clifford acknowledged he probably could build a new house for what he’s invested in this old-timer, built in 1920, but he grew to love its layout and essence, its proximity to both the Baylor University campus and the buzz surrounding Magnolia Market at the Silos and its spinoff attractions.

“It was pretty ragged,” he said of the residence. “You really had to have a vision of what it could become. Take one of the most extensive makeovers seen on ‘Fixer Upper,’ and this was comparable.”

The Clifford house in 2018 had an appraised taxable value of $105,700, according to the McLennan County Appraisal District. Five years ago, the taxable value stood at $41,030, but has steadily climbed as the neighborhood has evolved due to Magnolia-related redevelopment, with more planned.

The home sits on a typical inner-city Waco lot that covers roughly one-fifth of an acre. But the land alone jumped in taxable value from $4,500 to $37,690 between 2016 and 2017, according to the appraisal district.

When renovations are complete, Clifford said, the home will have four bedrooms available for overnight stays as an Airbnb. He said rates will fluctuate, depending on the season, but he estimates he will charge 10 to 15 percent less than the going rate among hotels in the area.

Airbnb boom

Pat Murphy, with Kelly Realtors, says an investor has placed under contract a house she’s listing in the heart of South Waco’s Airbnb boom. The modest home has a faux-brick facade and rain gutters with a stormy past.

“Everything in that area is becoming more popular,” said Murphy, reached by cell phone. “I’m not 100 percent sure the buyer plans to open an Airbnb. I can say she is from outside Waco, does not live here. I know that, considering the popularity of Magnolia and other activity being generated downtown, buildings being renovated for restaurant or retail use, Airbnbs are in demand. They feel more like home than hotels. You can cook in some, maybe relax in the yard.”

Carla Pendergraft, who provides marketing for the Waco Convention Center, said bed-and-breakfast and temporary vacation rentals are filling the void created by a shortage of quality hotel rooms in Greater Waco.

Last week, Pendergraft said in an email message that Airbnb vacation rentals are generating an estimated $3.8 million in revenues annually, at an average rate of $236 per night. Greater Waco currently has nearly 60 vacation rentals and bed-and-breakfast establishments, offering 97 rooms.

Several on the list available at the Waco Convention & Visitors Bureau website at tout their proximity to Magnolia Market at the Silos, Sixth Street and Webster Avenue, or remind readers that they were featured on “Fixer Upper.” Examples include the Shotgun House in the 600 block of South Seventh Street, the Three Little Pigs house featured in Fixer Upper’s third season, and Urban Myrtle, located “291 steps from the Silos.”

Up and down the block

Between Eighth and Ninth streets on Clay Avenue, close enough to enjoy the aroma emanating from Mama & Papa B’s Bar-B-Que, two Airbnb residences welcome guests, and a third home is being renovated.

Pam Tucker, with Coldwell Banker Apex Real Estate, is listing a property at 915 Clay Ave. The asking price is $319,000, which makes sense if it remains an Airbnb grossing $5,000 a month, said Tucker, not so much as a residence.

“The owner wants to cash out and move on to other projects,” Tucker said.

“This one is turnkey and ready to go, has an excellent rating on Airbnb,” she said. “Just transfer over and keep making money.”

Though ideal as a vacation rental, said Tucker, she also is getting interest from Baylor University parents wanting lodging on game days.

Waco’s ordinance relating to short-term rentals could face challenges this year, as the Texas Supreme Court has ruled communities must not overly interfere with property owners offering temporary stays for a price.

The Waco Plan Commission and Waco City Council must approve requests to open Airbnb establishments, and applicants receive permits.

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