Short-Term Rental

Airbnb, VRBO, and furnished rentals. Higher income potential than long-term rental — but more management, market sensitivity, and regulatory risk.

How It Works

You rent a furnished property on a nightly or weekly basis through platforms like Airbnb or VRBO. Revenue is higher per night than long-term renting, but occupancy varies by season, location, and competition. The strategy works best in high-demand markets: vacation destinations, urban cores, near event venues or medical centers.

STR properties can be financed with conventional mortgages, but lenders increasingly scrutinize income stability. Some markets have moved to restrict or ban STRs entirely — local regulation is a major underwriting factor.

What to Underwrite

• ADR (Average Daily Rate): Market comps via AirDNA or PriceLabs
• Occupancy rate: 50–70% is common in established markets
• Seasonal variance: Peak months can be 3–4x slow months
• Platform fees: 3–15% depending on platform and host type
• Management costs: Self-managed vs. 20–30% PM fee

Financing Options

• Conventional purchase mortgage (primary, second home, or investment rates)
• DSCR loans using projected STR income — some lenders accept Airbnb data
• Portfolio lenders more flexible on income documentation

What Kills These Deals

• Municipalities banning or limiting STRs post-purchase
• HOA restrictions not caught in due diligence
• Oversaturated markets driving down ADR and occupancy
• Underestimating furnishing, setup, and ongoing operating costs

Looking at a short-term rental? Let's look at the market data together.