Short-term rentals can generate significantly higher gross income than long-term rentals in tourist or business travel markets, but with higher variability, operating complexity, and regulatory risk.
STR vs. long-term rental trade-offs:
- Higher revenue potential: 1.5–3x gross rent in strong STR markets
- Higher expenses: Cleaning fees, supplies, platform fees (3% Airbnb host fee + guest fees), furnishing costs
- Seasonal volatility: Revenue varies significantly by season
- Regulatory risk: Many cities are restricting or banning STRs
- Active management: More work than long-term rentals (or requires a property manager at 20–30% of revenue)