What You Need to Know About Investing in Short-Term Rentals

airbnb real estate coach real estate mentor Feb 24, 2022
What You Need to Know About Investing in Short-Term Rentals


A short-term rental is commonly known as a vacation rental, which is an establishment that provides furnished accommodations, sometimes can provide meals and many other services for tourists and travelers. It’s a popular alternative to a hotel, giving you living space for a short period of time for leisure and other practical purposes. Others may stay for a couple of weeks, and some even want to rent the space for a few months.

In addition, many people who have a second home or a property for vacation sometimes let others rent it to generate income, especially when they’re away. Hence, to know more about this excellent investment opportunity, check these few facts below about investing in short-term rentals that you should know.

Short-Term Rentals are More Than Just Vacation Homes

One of the reasons for most people to stay in short-term rentals is to have time and space for themselves on an exciting vacation. However, short-term rentals are more than just vacation homes. In fact, you can let people rent your space who want to have a simple one-day staycation, like couples or individuals who just need to have quality time for themselves. In addition, you can also cater to those who have a particular health condition and need treatment or operation from a hospital or clinic near your location. You can let them rent your space for a period of time while they’re being an outpatient for recuperation.

Besides that, there are also some homeowners who are currently renovating their houses or are in between houses when selling and moving so they need a place to stay for a couple of weeks or months. If they live nearby to your short-term rentals, you can surely offer them a space to stay. These people are some of those looking for a place more than just a vacation home, but a space where they can stay for various important reasons.

Owning Short-Term Rentals is an Active Income-Generating Investment

Many people believe that investing in short-term rentals will give you a passive income. The fact is that it doesn’t give you money passively in an instant, but it will over time. It just needs a lot of work and so much of your attention and time, especially when you are just getting started in this industry unless you hire a property management company. Hence, the moment you’ve purchased a particular property and successfully upgraded and renovated it, then you begin to receive bookings and get more guests, you’ll then have the opportunity to enjoy having a more steady income passively in the near future.

The Location is a Great Factor for Marketable Short-Term Rentals

If you plan to buy a particular property and make it a short-term rental for tourists and travelers, you should consider the location and the community around the area. You can purchase one near where you live or find a property in the town or city nearby. To help you finalize your decision, here are some of the things you need to check when choosing a perfect location for your next short-term rental investment, which will give you the higher potential of making it more marketable to your potential guests.

  • Buy a property in a particular location where there’s a high demand for travelers and tourists. It includes having easy access to nearby attractions, restaurants, shopping malls, public transportations, beaches, lakes and many others.
  • Another thing to consider in choosing a location for your short-term rental property is the existing local economy. You have to investigate it yourself to find out if the property you want to buy is marketable in the area and to check if the industry is growing and progressing for the past few years. Doing so will give you an idea that the property you’re planning to buy has a higher chance of success.
  • It’s also important to know the cost of living in the location where you plan to purchase your property. Since you surely want more than just to break even with your short-term rental business, you have to know how much it will cost you to purchase the property and how much money you will earn in return. Because of that, you need to understand the cost of living in that particular area, including the utility costs, mandated property fees and taxes, and the average rental fees.
  • I like to make sure that the cost and monthly costs of the property can also be supported by a long term rental in case you ever decide to pivot and lease the house long term. As we spoke about earlier a short term rental can be way more profitable and is a more active investment to capitalize on those extra profits.


Investing in short-term rentals is a great way to enjoy a few advantages, including substantial appreciation, stable income, competitive return of investment, and even tax benefits. That’s why if you plan to start your business in this industry, you need to have a solid background in the real estate world by doing your own research to gather relevant information and helpful details. Doing so will significantly help you have a good start in getting into a new endeavor of your career in the real estate industry.

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