{"id":145152,"date":"2022-10-26T09:04:24","date_gmt":"2022-10-26T15:04:24","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?page_id=145152"},"modified":"2023-09-27T05:56:37","modified_gmt":"2023-09-27T11:56:37","slug":"short-term-rental-strategy","status":"publish","type":"page","link":"https:\/\/www.biggerpockets.com\/blog\/short-term-rental-strategy","title":{"rendered":"Pillar Page | Short-term Rental Strategy"},"content":{"rendered":"\n<div id=\"hero-block_62b38d36c9b6e\" class=\"first:mt-0 hero-block py-4  alignfull   has-background has-slate-300-background-color has-text-color has-slate-900-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h1 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-slate-900-color has-text-color\" style=\"font-size:46px;font-style:normal;font-weight:100;letter-spacing:28px\">Investing in Short-Term Rental Properties: A Beginner\u2019s Guide &amp; How to Get Started<\/h1>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<p>Short-term rental properties are as popular as ever. Between vacation rentals and short-term rental sites like Airbnb, property owners are enjoying a heyday in the short-term rental market.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-group has-slate-200-background-color has-background is-vertical is-layout-flex wp-container-core-group-is-layout-8cf370e7 wp-block-group-is-layout-flex\">\n<p>By the data and research gathered by <a href=\"https:\/\/ipropertymanagement.com\/research\/vacation-rental-industry-statistics\" target=\"_blank\" rel=\"noopener\">IPropertyManagement<\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The U.S. vacation rental industry is valued at $15.1 billion, or 20% of the global market<\/li>\n\n\n\n<li>The vacation rental market value increased 23% from 2020 to 2021.<\/li>\n\n\n\n<li>86% of consumers say they will book a vacation rental in 2022.<\/li>\n\n\n\n<li>The vacation rental market is expected to enjoy a compound annual growth rate of 8.49% in the next five years.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<p>However, owning a vacation rental property isn\u2019t all sandals and sunscreen. Turning your short-term rental into an amazing real estate investment requires local market knowledge and the right property management.&nbsp;<\/p>\n\n\n\n<p>In this guide, we\u2019ll tell you everything you need to know to start as a short-term property investor, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#what\" target=\"_blank\">What is a short-term rental?<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#are\" target=\"_blank\">Are short-term rentals profitable?<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#pros\" target=\"_blank\">The pros of short-term rental investments<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#cons\" target=\"_blank\">The cons of short-term rentals<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#howto\" target=\"_blank\">How to calculate your return on a short-term rental<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#start\" target=\"_blank\">How to start a short-term rental business<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#challenges\" target=\"_blank\">Common Challenges for Short-Term Rental and Airbnb Owners<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.biggerpockets.com\/short-term-rental-strategy#other\" target=\"_blank\">Other short-term rental options<\/a><\/li>\n<\/ul>\n\n\n\n<p>Feel free to jump down to any section you\u2019d like!<\/p>\n\n\n\n<p>Let\u2019s get started\u2026<\/p>\n\n\n\n<p class=\"has-theme-slate-dark-color has-text-color\" style=\"font-size:16px\"><em>Page reviewed by Avery Carl &#8211; Founder and CEO of <a href=\"https:\/\/theshorttermshop.com\/?gclid=CjwKCAjw7p6aBhBiEiwA83fGui2avh_f6uRU0Fko6tUWZzeFNdl7FTUP0llUIkRfBrxlkvBHwHZ7jhoC8woQAvD_BwE\" target=\"_blank\" rel=\"noreferrer noopener\">The Short Term Shop<\/a>, short-term real estate investor, and co-author of <\/em><a href=\"https:\/\/store.biggerpockets.com\/products\/short-term-rental-long-term-wealth?_pos=1&amp;_sid=da4bba042&amp;_ss=r\" target=\"_blank\" rel=\"noreferrer noopener\">Short-Term Rental, Long-Term Wealth<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"what\"><strong>What is a Short-Term Rental? <\/strong><\/h2>\n\n\n\n<div class=\"wp-block-columns has-text-color is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\" style=\"color:#000000\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>Much like a hotel, short-term rentals are properties that are rented out to guests on a nightly basis, rather than via a monthly or annual lease. Also like a hotel, short-term rental properties are fully furnished and equipped with everything guests may need during their stay. In most states, guests must stay for 30 days or fewer for it to be considered a \u201cshort-term&#8221; stay.<\/p>\n\n\n\n<p>Owners often buy short-term rentals as a secondary or vacation home, not with the intention of living in them. Since the creation of sites like <a href=\"https:\/\/airbnb.com\/\" target=\"_blank\" rel=\"noopener\">Airbnb<\/a> and VRBO, real estate investors are realizing the true potential of a short-term rental property. What used to be considered a side-gig for property owners looking to make passive income is now a booming industry with high-profit potential.&nbsp;<\/p>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"are\"><strong>Are Short-Term Rentals Profitable? <\/strong><\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>Short answer: yes.&nbsp;<\/p>\n\n\n\n<p>However, if you want to enjoy high-profit margins, you\u2019ve got to put in the work! You have to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The right location to own a short-term rental<\/li>\n\n\n\n<li>Upfront costs, such as renovations and repairs<\/li>\n\n\n\n<li>Rules about short-term rentals in your state\/county<\/li>\n\n\n\n<li>Maintenance services&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Short-term rentals can also be more profitable than long-term rentals, if you\u2019re marketing and maintaining them well.<\/p>\n\n\n\n<p>For example, let\u2019s say Andrea and Michael both own identical one-bedroom apartments in the city. Andrea has a long-term tenant who pays $1,600\/mo, while Michael rents his apartment for $150\/night on weekdays and $200\/night on weekends. Michael also works with a property management company that maintains the unit for 20%. If Michael is housing tourists for 20 days out of the month (8 weekend days and 12 weekdays), here\u2019s what his profit looks like:<\/p>\n\n\n\n<p>(8 days x $200 + 12 days x $150) \/ 20% = $2,720<\/p>\n\n\n\n<p>Even though Michael\u2019s rental is vacant one-third of the month, he\u2019s still making $1,120 in rental income more than Andrea, and that\u2019s with a property management company maintaining the rental.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-pullquote has-border-color has-transparent-border-color has-theme-blue-dark-color has-slate-100-background-color has-text-color has-background\" style=\"border-style:dotted;border-radius:0px;font-style:normal;font-weight:600\"><blockquote><p>In 2019, the <a href=\"https:\/\/www.earnest.com\/blog\/sharing-economy-income-data\/\" target=\"_blank\" rel=\"noopener\">average Airbnb host<\/a> made about $924\/mo, with a median monthly income of $440\/mo.<\/p><\/blockquote><\/figure>\n\n\n\n<p>According to Avery Carl\u2019s book, <a href=\"https:\/\/store.biggerpockets.com\/products\/short-term-rental-long-term-wealth\" target=\"_blank\"><em>Short-Term Rental Long-Term Wealth<\/em><\/a>, \u201ca property can generate upwards of three to five times more cash flow as a short-term rental than a traditional long-term rental,\u201d depending on the property type and location.&nbsp;&nbsp;<\/p>\n<\/div>\n<\/div>\n\n\n\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-2\/3 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Build long-term wealth with short-term rentals<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Vacation rentals can be an extremely lucrative way to boost your monthly income\u2014but only if you acquire and manage your properties correctly. This ultimate guide to analyzing, buying, and managing vacation rental properties will set you up for immediate success and long-term wealth.<\/p>\n\n\n\n<div id=button-custom-event-block_64134fe56b103 class='button-custom-event'>\n      <a href=\"https:\/\/store.biggerpockets.com\/collections\/all-books\/products\/short-term-rental-long-term-wealth?utm_source=blog&#038;utm_medium=marketing_block\" x-on:click=\"window.analytics.track(&#039;Blog Block | Publishing: STRLTW Book&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/short-term-rental-strategy&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Get Your Copy<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/3 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/07\/9781947200449_FChigh-scaled.jpg\" alt=\"\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"pros\">The Pros of Short-Term Rental Properties<\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>The potential for higher income is just one of the many reasons that owning a short-term rental property is worth it. Here are a few more:<\/p>\n\n\n\n\n\n<p>This may sound counterintuitive, but a short-term rental can be easier to maintain than a long-term rental in several ways:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If you hire a property manager, they\u2019ll tidy up your rental and make sure it\u2019s ready for your next guests.&nbsp;<\/li>\n\n\n\n<li>Many vacation property companies include a cleaning fee, so even if you\u2019re doing the cleaning yourself, the fee can pay for future maintenance needs.&nbsp;<\/li>\n\n\n\n<li>Since your renters are staying for shorter periods, you can clean more frequently and detect potential issues before they become problems.&nbsp;<\/li>\n<\/ul>\n\n\n\n\n\n<p>You control your vacation home\u2019s calendar, which means you can decide when you want to rent it out and when you want to stay there. If you want to spend a week in your summer beach house or take two weeks to redo your porch, you can do so with the click of a button.&nbsp;<\/p>\n\n\n\n\n\n<p>You can alter the price of your rental as you see fit. If your rental property is in the middle of a popular ski destination, increase the price in winter. It\u2019s also common to raise rates on weekends and holidays, so don\u2019t miss out on easy opportunities to increase your cash flow.&nbsp;<\/p>\n\n\n\n<p>Sometimes, it may be to your benefit to reduce your pricing to remain competitive. Michael from the earlier example can offer a special rate for someone looking to stay in his rental home for a month. Instead of paying a monthly rate for all 30 days, which is $4,900, can he price it at $4,000 for the month. He\u2019ll still make more money than if he rented it out for just 20 days, and he\u2019ll remain competitive. Plus, he knows he\u2019s less likely to get guests who only want to stay a couple days during the middle of the week, anyway.&nbsp;<\/p>\n\n\n\n\n\n<p>Your short-term rental should increase in value year-over-year. The longer you own and maintain it, the more valuable it\u2019ll become. Homes worth $100,000 in 1967 are worth over <a href=\"https:\/\/www.in2013dollars.com\/Housing\/price-inflation\" target=\"_blank\" rel=\"noopener\">$960,000 in 2022<\/a>. Your rental may not experience the same housing inflation, but it\u2019s highly likely that it\u2019ll appreciate in value.&nbsp;<\/p>\n\n\n\n\n\n<p>Short-term rental properties are teeming with tax advantages! Here are just a few:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Maximize your deductions<\/strong>: All your marketing, management, upkeep, and insurance costs are deductible. This also includes business meals, educational expenses, and an eligible home office.&nbsp;<\/li>\n\n\n\n<li><strong>Track your trips<\/strong>: If you\u2019re making frequent trips to and from your rental to set up and manage the property, you can deduct travel time. Also, if you buy a vehicle you\u2019re using primarily to rehab, stage, and manage your short-term rental, you can deduct its entire purchase price. If you write off $24,000 on your car, you can save close to $8,000 in taxes!<\/li>\n\n\n\n<li><strong>Appreciate depreciation<\/strong>: If you spend $7,500 on furniture, appliances, and entertainment for your rental, you can deduct that money immediately during the first tax season. Just be sure to keep an itemized receipt.<\/li>\n<\/ul>\n\n\n\n<p>Are you reaping all the tax benefits from your short-term rental? If your answer isn\u2019t immediately, \u201cyes!\u201d read <a href=\"https:\/\/www.biggerpockets.com\/blog\/reduce-your-taxes-with-short-term-rental-properties\" target=\"_blank\">Reduce Your Taxes with Short-Term Rental Properties<\/a>.&nbsp;<\/p>\n\n\n<\/div>\n<\/div>\n\n\n\n<p><strong>Watch now: <\/strong>Short-term rentals provide many of the same standard tax deductions that long-term rental properties grant you. But, they also allow you access to other types of tax deductions that can help lower your non-real estate-related income. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"The Best Short-Term Rental Tax Write-offs\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/p680EfajILY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"cons\"><strong>The Cons of Short-Term Rentals<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>No investment strategy is without flaws, including short-term rentals. Here are the main downsides of owning a short-term rental property:<\/p>\n\n\n\n\n\n<p>If you don\u2019t have a property manager, running a short-term rental can become a full-time job. You may end up in charge of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Scheduling bookings<\/li>\n\n\n\n<li>Screening renters<\/li>\n\n\n\n<li>Collecting payments<\/li>\n\n\n\n<li>Maintaining the property<\/li>\n\n\n\n<li>Doing all the marketing.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>If you\u2019re not great at customer service and marketing, there\u2019s also a steep learning curve to managing a rental. You\u2019ll learn a lot, but it may be more effort than you want to put in.&nbsp;<\/p>\n\n\n\n\n\n<p>It\u2019s not uncommon for short-term rentals to make two or three times more than their long-term counterparts. However, they lack the predictability investors of long-term properties enjoy. When the pandemic started, demand for vacation properties plummeted, and many companies went out of business.<\/p>\n\n\n\n<p>Although the pandemic is an extreme example, last-minute cancellations and seasonal vacancies are common. Also, there may be months where you\u2019re booked for thirty days straight, and others where you could struggle to book a single weekend.<\/p>\n\n\n\n\n\n<p>For long-term rentals, landlords and property managers usually run prospective tenants through a rigorous screening process that may include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rental history<\/li>\n\n\n\n<li>Background check<\/li>\n\n\n\n<li>Credit check<\/li>\n\n\n\n<li>Proof of income<\/li>\n\n\n\n<li>Proof of income<\/li>\n\n\n\n<li>Verifiable references<\/li>\n<\/ul>\n\n\n\n<p>Short-term rentals lack this luxury. Sometimes, the only information you have to go on is their online reviews. Also, since you\u2019ll have more traffic coming through your vacation rental, you are assuming greater risk.&nbsp;<\/p>\n\n\n\n\n\n<p>In general, long-term tenants pay your utility bills because they\u2019re the ones using them. Short-term renters don\u2019t, so water\/sewage\/garbage, electricity, and internet all come out of your pocket.&nbsp;<\/p>\n\n\n\n\n\n<p>People usually want to live in a comfortable, quiet environment where they feel safe\u2014especially if they have kids. If there\u2019s a new cast of characters living next door each week, your neighbors may get frustrated with you.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s be realistic: not everyone renting from you will be an ideal houseguest. They may be loud or throw parties, or do something else your neighbors won\u2019t approve of.&nbsp;<\/p>\n\n\n\n\n\n<p>Your neighborhood may have an HOA with special rules for short-term rental properties or may prohibit them altogether. Research your neighborhood extensively and read HOA bylaws before purchasing any property. If you violate their rules, you could be subject to a lawsuit.&nbsp;Read one to learn more about laws and regulation challenges. <\/p>\n\n\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"768\" height=\"510\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/STR-4-things-to-know-768x510-1.webp\" alt=\"\" class=\"wp-image-145153\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/STR-4-things-to-know-768x510-1.webp 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/STR-4-things-to-know-768x510-1-300x199.webp 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/STR-4-things-to-know-768x510-1-340x225.webp 340w\" sizes=\"auto, (max-width: 768px) 100vw, 768px\" \/><figcaption class=\"wp-element-caption\"><strong>Four areas that you must have crystal-clear clarity on before you take the leap and start a short-term rental.<\/strong><\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-theme\"><a class=\"wp-block-button__link wp-element-button\" href=\"four areas that you must have crystal-clear clarity on before you take the leap and start a short-term rental.\" target=\"_blank\" rel=\"noreferrer noopener\">Read More<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/cash-flow-1024x682.jpg\" alt=\"\" class=\"wp-image-140006\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/cash-flow-1024x682.jpg 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/cash-flow-300x200.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/cash-flow-768x512.jpg 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/04\/cash-flow.jpg 1360w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><strong>Will Short-Term Rental Ordinances Cut Your Cash Flow?<\/strong> <strong>Looking at regulations should be the FIRST thing you do before you buy property.<\/strong><\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-theme\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.youtube.com\/watch?v=kAehB_M6RNU\" target=\"_blank\" rel=\"noreferrer noopener\">Watch Now<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"768\" height=\"532\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/ROOK_214_WEB-768x532-1.webp\" alt=\"\" class=\"wp-image-145154\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/ROOK_214_WEB-768x532-1.webp 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/10\/ROOK_214_WEB-768x532-1-300x208.webp 300w\" sizes=\"auto, (max-width: 768px) 100vw, 768px\" \/><figcaption class=\"wp-element-caption\"><strong>On your way to&nbsp;building a&nbsp;short-term rental&nbsp;empire, you\u2019ll need to build out your team.<\/strong><\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-theme\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.biggerpockets.com\/blog\/rookie-214\" target=\"_blank\" rel=\"noreferrer noopener\">Listen Now<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"howto\">How to Calculate Your Return on a Short-Term Rental<\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>You have to <a href=\"https:\/\/www.biggerpockets.com\/blog\/analyze-short-term-rental\" target=\"_blank\">run the numbers<\/a> before you buy. If you don\u2019t, you won\u2019t know if you\u2019re making a good ROI. In this section, we\u2019ll show you how to estimate:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Gross income<\/strong>: The total income earned from a year\u2019s worth of bookings<\/li>\n\n\n\n<li><strong>Net income<\/strong>: The money earned in a year after subtracting operating expenses from your gross income.<\/li>\n\n\n\n<li><strong>Cash flow<\/strong>: Your net annual income minus your annual mortgage, taxes, and insurance escrowed.&nbsp;<\/li>\n\n\n\n<li><strong>Cash-on-cash return<\/strong>: The annual rate of return made on your short-term rental (quantified as a percentage). Ideally, you want your cash-on-cash return to be around 20% or higher.&nbsp;<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide\"\/>\n\n\n\n<p><a href=\"https:\/\/www.biggerpockets.com\/airbnb-calculator\" target=\"_blank\">Figuring out all these equations<\/a> to know five numbers:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Purchase price<\/strong><\/li>\n\n\n\n<li><strong>Cash invested (your down payment plus rehab costs)<\/strong><\/li>\n\n\n\n<li><strong>Gross annual income<\/strong><\/li>\n\n\n\n<li><strong>Total operating expenses<\/strong><\/li>\n\n\n\n<li><strong>Total annual mortgage, taxes, and insurance escrowed:<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Let\u2019s assume you\u2019ve figured out each of these numbers based on your end-of-year <a href=\"https:\/\/www.biggerpockets.com\/airbnb-calculator\" target=\"_blank\" rel=\"noreferrer noopener\">calculations:<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Purchase price: $500,000<\/li>\n\n\n\n<li>Cash invested: $120,000<\/li>\n\n\n\n<li>Gross annual income: $80,000<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Total operating expenses: $24,000<\/li>\n\n\n\n<li>Total annual mortgage, taxes, and insurance escrowed: $20,000<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide\"\/>\n\n\n\n<p><strong>You already know your gross annual income, so the next number to find is your net operating income.&nbsp;<\/strong><\/p>\n\n\n\n<p>Net operating income = gross income &#8211; operating expenses<\/p>\n\n\n\n<p>Net operating income = $80,000 &#8211; $24,000<\/p>\n\n\n\n<p>Net operating income = $56,000<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide\"\/>\n\n\n\n<p><strong>Next, solve for cash flow:<\/strong><\/p>\n\n\n\n<p>Cash flow = net operating income &#8211; annual mortgage, taxes, and insurance escrowed<\/p>\n\n\n\n<p>Cash flow = $56,000 &#8211; 20,000<\/p>\n\n\n\n<p>Cash flow = $36,000<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide\"\/>\n\n\n\n<p><strong>Finally, you\u2019re ready to find your cash-on-cash return:<\/strong><\/p>\n\n\n\n<p>Cash-on-cash return = (cash flow \/ cash invested)<\/p>\n\n\n\n<p>Cash-on-cash return = ($36,000 \/ $120,000)<\/p>\n\n\n\n<p>Cash-on-cash return = 0.3, or 30%&nbsp;<\/p>\n\n\n\n<p>If you can maintain a 30% cash-on-cash return, you\u2019ll recoup your investment in 3.33 years. That\u2019s a pretty great ROI!<\/p>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"start\">How to Start a Short-Term Rental Business<\/h2>\n\n\n\n<p>Buying a vacation property is a huge investment, so do your research and be prepared before purchasing:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Understand Daily Rates and Fees<\/h3>\n\n\n\n<p>You can\u2019t predict the future, but studying average daily rates (ADR) and occupancy rates can give you an estimated guess of what your gross monthly income may be.&nbsp;<\/p>\n\n\n\n<p>ADRs can vary greatly from rental to rental, even in the same neighborhood! Even the same property on Airbnb may be $300 one night, and $400 the next. Luckily, there are several data sites you can use to hone in on an estimated ADR. These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.airdna.co\/\" target=\"_blank\" rel=\"noopener\">AirDNA<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.alltherooms.com\/vacation-rentals&#039;\" target=\"_blank\" rel=\"noopener\">AllTheRooms<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.mashvisor.com\/\" target=\"_blank\" rel=\"noopener\">Mashvisor<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/data.rabbu.com\/\" target=\"_blank\" rel=\"noopener\">data.rabbu.com<\/a><\/li>\n<\/ul>\n\n\n\n<p>These sites also provide valuable information on occupancy rates, such as the average occupancy rate for an area and even the occupancy rates for individual properties (usually you\u2019ll have to pay for this feature).&nbsp;<\/p>\n\n\n\n<p>Unfortunately, information on occupancy rates is harder to calculate, because their numbers may be skewed by a number of factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Blackout dates<\/li>\n\n\n\n<li>Owners listing their properties on multiple sites<\/li>\n\n\n\n<li>How far out in advance are bookings available?<\/li>\n\n\n\n<li>How long has the property been available?<\/li>\n<\/ul>\n\n\n\n<p>Check the property\u2019s booking schedule and compare it to the occupancy rates listed on the above sites. If it\u2019s consistent, it\u2019s likely a reliable source.<\/p>\n\n\n\n\n\n<p>We\u2019ll dive deeper into <a href=\"https:\/\/docs.google.com\/document\/d\/1mRwUr-8IXiofkGqPgb6IOAKzbDE0dwlf82gj8ko8kdI\/edit?pli=1#heading=h.cq6dcpckk9at\" target=\"_blank\" rel=\"noopener\">furnishing your short-term rental or Airbnb later on<\/a>, but for now you need to estimate how much it will cost to furnish your rental. Pricing varies greatly depending on the size of your home and what items you\u2019re including as furnishings.&nbsp;<\/p>\n\n\n\n<p>In general, for mid-grade, budget-friendly items, you can expect to pay:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>$5,000 &#8211; $10,000 for 1-2 bedrooms<\/li>\n\n\n\n<li>$12,000 &#8211; $20,000 for 3-4 bedrooms<\/li>\n<\/ul>\n\n\n\n<p>Rehab fees also vary, depending on the condition of the property and what renovations and repairs you\u2019re looking to put into it.&nbsp;<\/p>\n\n\n\n\n\n<p>A long-term rental\u2019s operating expenses are comparable to a primary residence. Short-term rentals have a few more expenses to consider. Update operating expenses spreadsheet regularly. Your estimates will become more accurate over time. Create a spreadsheet with this list, and based on the size and location of your vacation property, estimate what each item will cost:<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<ul class=\"wp-block-list\" id=\"block-7fdaee4f-738f-4b68-8701-b6b236792410\">\n<li>Booking fees<\/li>\n\n\n\n<li>Cleaning fees<\/li>\n\n\n\n<li>Occupancy tax<\/li>\n\n\n\n<li>Property taxes<\/li>\n\n\n\n<li>Insurance<\/li>\n\n\n\n<li>Management fees<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<ul class=\"wp-block-list\" id=\"block-7fdaee4f-738f-4b68-8701-b6b236792410\">\n<li>Maintenance fees<\/li>\n\n\n\n<li>Cable and internet<\/li>\n\n\n\n<li>Electric\/gas<\/li>\n\n\n\n<li>Water\/sewer\/garbage<\/li>\n\n\n\n<li>Supplies\/inventory<\/li>\n\n\n\n<li>Unique features, such as security, pools, hot tubs, etc.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n\n\n\n\n<h3 class=\"wp-block-heading\">Research Common Laws and Regulations<\/h3>\n\n\n\n<p>Never buy a short-term rental without first knowing the law and regulations of your city and neighborhood. If a city has licensing requirements, you can find them on the planning and zoning of your city\u2019s website. Since they\u2019re common, there\u2019s usually a link or section that outlines the ordinances and regulation requirements for short-term rentals.<\/p>\n\n\n\n<p><strong>It\u2019s common for cities with regulations to require you or the property manager to obtain a license to run a vacation rental. You\u2019ll also likely need a tax\/business ID.&nbsp;<\/strong><\/p>\n\n\n\n<p>While laws and regulations vary from city to city, here are the most common requirements you\u2019ll encounter:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Primary residence requirements<\/strong> &#8211; Many cities are adopting policies that require your short-term rental to also be a primary residence. In some cases, a property can be used as a short-term rental while the homeowner is away. In others, you can only rent portions of your home, such as an accessory dwelling unit (ADU), basement, or bedroom.&nbsp;<\/li>\n\n\n\n<li><strong>Property requirements<\/strong> &#8211; Some cities require your lot to be a specific size or have multiple off-street parking spots available.&nbsp;<\/li>\n\n\n\n<li><strong>Operation limits<\/strong> &#8211; Cities can limit the number of days you can rent out your home. 240-day maximums (approximately 20 days a month) are common, but sometimes they\u2019re even less.&nbsp;<\/li>\n\n\n\n<li><strong>License fees<\/strong> &#8211; These fees are pretty standard and reasonable. For example, a one-year licensing fee in <a href=\"https:\/\/www.seattle.gov\/business-regulations\/short-term-rentals\/#:~:text=The%20Department%20of%20Finance%20and,be%20valid%20for%20one%20year.\" target=\"_blank\" rel=\"noopener\">Seattle<\/a> is $75. However, some destinations charge hundreds\u2014or more\u2014in licensing fees.&nbsp;<\/li>\n\n\n\n<li><strong>Lodgers tax<\/strong> &#8211; Certain cities and states require property owners and managers to pay a lodger&#8217;s tax for renting out a room or property. The tax rate varies from <a href=\"https:\/\/www.ncsl.org\/research\/fiscal-policy\/state-lodging-taxes.aspx\" target=\"_blank\" rel=\"noopener\">state to state<\/a>.&nbsp;<\/li>\n\n\n\n<li><strong>Zoning laws<\/strong> &#8211; You must meet the zoning requirements of your city.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Build Your Power Team<\/h3>\n\n\n\n<p>Entrepreneurs rarely operate alone. Running a short-term rental is a team effort, so even if you\u2019re planning on doing most of the heavy lifting, you\u2019re still going to be <a href=\"https:\/\/www.biggerpockets.com\/blog\/tools-that-automate-short-term-rental\" target=\"_blank\" rel=\"noreferrer noopener\">outsourcing some of the work.&nbsp;<\/a><\/p>\n\n\n\n<p>Here are a few key players in your power team:<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Investor-friendly Real Estate Agent&nbsp;<\/h4>\n\n\n\n<p>Find an agent who specializes in short-term rental properties. The right agent will save you a lot of the work and is well worth their commission. Your agent should know the short-term rental laws and regulations in your city and state, have keen knowledge of your local market, have connections to property management companies, and know the process from start to finish.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile has-slate-200-background-color has-background\" style=\"grid-template-columns:auto 34%\"><div class=\"wp-block-media-text__content\">\n<h2 class=\"wp-block-heading\">Find an Agent in Minutes<\/h2>\n\n\n\n<p><strong>Match with an investor-friendly real estate agent who can help you find, analyze, and close your next deal.<\/strong><\/p>\n\n\n\n<p>Streamline your search. Tap into a trusted network. Leverage market and strategy expertise.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\" rel=\"noreferrer noopener\">Find an Agent<\/a><\/div>\n<\/div>\n<\/div><figure class=\"wp-block-media-text__media\"><img loading=\"lazy\" decoding=\"async\" width=\"500\" height=\"500\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" alt=\"find an investment-friendly real estate agent\" class=\"wp-image-144355 size-full\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png 500w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2-300x300.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2-150x150.png 150w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2-200x200.png 200w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/figure><\/div>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Property Manager or Management Team<\/h4>\n\n\n\n<p>The right property manager can turn your high-stress rental into a low-maintenance breeze. Depending on how you work with, your property manager may do some or all of the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Furnish your property or provide you with an itemized checklist<\/li>\n\n\n\n<li>Market your property on Airbnb\/VRBO platforms<\/li>\n\n\n\n<li>Manage scheduling and customer service relations<\/li>\n\n\n\n<li>Manage invoicing and payment processing&nbsp;<\/li>\n\n\n\n<li>Schedule cleaners, landscapers, and other maintenance professionals as needs<\/li>\n\n\n\n<li>Set up licensing and tax IDs for your rental&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>In some cases, all you need to do is buy a property and get it ready to rent. The property manager handles the rest.&nbsp;<\/p>\n\n\n\n<p>Depending on your needs, the industry average for property managers is <a href=\"https:\/\/learn.roofstock.com\/blog\/vacation-rental-management-fees\" target=\"_blank\" rel=\"noopener\">25% &#8211; 30%<\/a> of your gross rental income, depending on their fee structure. Airbnb property managers tend to charge between <a href=\"https:\/\/www.hostaway.com\/how-to-hire-an-airbnb-property-manager\/#:~:text=The%20charges%20will%20vary%20based,services%20as%20possible%20are%20included.\" target=\"_blank\" rel=\"noopener\">25% &#8211; 50%<\/a>, depending on where the rental is located and what services they\u2019re offering.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Maintenance Crew<\/h4>\n\n\n\n<p>Reliable handymen\/handywomen and other vendors must be available to address functional issues with your property on short notice, should they arise. If your hot tub isn\u2019t working or your heater malfunctions, speedy repairs can help you maintain a high property and experience ratings.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Cleaning Crew<\/h4>\n\n\n\n<p>Reliable cleaners are in high demand and well worth their fee. You can find reliable short-term rental cleaners like <a href=\"https:\/\/turnoverbnb.com\/\" target=\"_blank\" rel=\"noopener\">TurnoverBNB<\/a>. Even better, these cleaners can gain immediate access to your booking calendar, so they know exactly when they need to \u201cturn\u201d your rental.&nbsp;<\/p>\n\n\n\n<p>High-quality cleaners may also:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Restock supplies<\/li>\n\n\n\n<li>Order\/replace items and invoice you<\/li>\n\n\n\n<li>Wash and change linens<\/li>\n\n\n\n<li>Inform you if something is missing or broken<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How to Choose the Best Locations for a Short-Term Rental<\/h3>\n\n\n\n<p>There are three main short-term rental markets:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Metro markets<\/li>\n\n\n\n<li>National fly-to vacation markets<\/li>\n\n\n\n<li>Regional drive-to vacation and leisure markets<\/li>\n<\/ul>\n\n\n\n<p>Each of these markets have varying degrees of stability or volatility, attract different types of renters, and specific rules and regulations.&nbsp;<\/p>\n\n\n\n\n\n<p>Metro markets attract many visitors but aren\u2019t dependent on tourism. You may experience busier or slower times, but it\u2019s usually desirable year-round, as opposed to a beach house or ski resort. Short-term rentals in metro markets are a great alternative to hotels, especially for those staying more than a few days. Metro rentals tend to attract professionals on business trips, traveling medical professionals, and locals taking a \u201cstaycation.\u201d<\/p>\n\n\n\n<p>The metro market is high risk, high reward. Metro markets are very rewarding in terms of cash flow, but they\u2019re also more regulated. In these markets, you\u2019re also dealing with disgruntled neighbors, building or HOA rules, hotel lobbyists looking to limit zones where short-term rentals are allowed, and a lack of affordable housing due to Airbnb investors.&nbsp;<\/p>\n\n\n\n\n\n<p>National vacation markets depend on tourists, like Aspen or Hawaii. Short-term rentals are part of the very fabric of these markets, but some areas still experience pushback from permanent residents.<\/p>\n\n\n\n<p>The national vacation market can be lucrative, but it\u2019s also often tied to the economy. If there\u2019s a recession, you may have a more difficult time getting renters. If there\u2019s a boom, you can be booked out for months!<\/p>\n\n\n\n\n\n<p>Regional vacation markets also depend on tourists, and they\u2019re easier to drive to, like Big Bear Lake, California or Branson, Missouri. These markets are often smaller towns and more affordable than national markets, so they\u2019re not as dependent on the economy as their national counterparts. They also usually have fewer permanent residents or others looking to make running a short-term rental difficult.&nbsp;<\/p>\n\n\n\n\n\n<p>In short:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Metro markets &#8211; potentially highest return, high risk<\/li>\n\n\n\n<li>National vacation markets &#8211; potentially high return, medium risk<\/li>\n\n\n\n<li>Regional vacation markets &#8211; modest return, low risk<span style=\"font-family: -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen-Sans, Ubuntu, Cantarell, &quot;Helvetica Neue&quot;, sans-serif;\"><\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"challenges\">Common Challenges for Short-Term Rental and Airbnb Owners<\/h2>\n\n\n\n<p>Congratulations! You\u2019re now ready to run your business. Here are many of the common challenges you\u2019ll face when running a rental or Airbnb, and how to address them:<\/p>\n\n\n\n\n\n<p>Finding the optimal value of your rental property is always a challenge. For example, Milo just started renting his property on Airbnb. Here are his numbers for the first four months. For simplicity\u2019s sake, let\u2019s assume these are the only costs that matter:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-theme-slate-dark-color has-slate-50-background-color has-text-color has-background\"><tbody><tr><td><strong>Month #<\/strong><\/td><td><strong>Price<\/strong><\/td><td><strong>Days Booked<\/strong><\/td><td><strong>Gross Income<\/strong><\/td><\/tr><tr><td>1<\/td><td>$100<\/td><td>30<\/td><td>$3,000<\/td><\/tr><tr><td>2<\/td><td>$125<\/td><td>24<\/td><td>$3,000<\/td><\/tr><tr><td>3<\/td><td>$150<\/td><td>22<\/td><td>$3,300<\/td><\/tr><tr><td>4<\/td><td>$200<\/td><td>10<\/td><td>$2,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>$150\/night is his current optimal value. Pricing his rental at $200 scared potential renters away, while pricing it at $100 and $125 kept the property booked, but not at its best value.&nbsp;<\/p>\n\n\n\n<p>Some owners will start renting their property at a lower price to get more bookings and reviews. Once they have a few dozen reviews, then slowly raise their rates. However, be mindful of additional circumstances, like the economy and changing seasons. <\/p>\n\n\n\n<p>Start analyzing your short-term rental property with the <a href=\"https:\/\/www.biggerpockets.com\/airbnb-calculator\" target=\"_blank\" rel=\"noreferrer noopener\">Airbnb Calculator. <\/a><\/p>\n\n\n\n\n\n<p>Guest cancellations can greatly impact your operating income. Unfortunately, cancellations are an inevitable component of owning a vacation property. Luckily, there are plenty of cancellation policies you can include in the fine print of your booking. You just have to find the right one for you. If they\u2019re too strict, you risk getting negative reviews. If they\u2019re too relaxed, you could lose money.&nbsp;<\/p>\n\n\n\n<p>Here are a few common policies short-term rental owners should consider. <a href=\"https:\/\/www.igms.com\/airbnb-cancellation-policy\/\" target=\"_blank\" rel=\"noopener\">Airbnb\u2019s cancellation policies<\/a> are very similar:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-theme-blue-dark-color has-slate-200-background-color has-text-color has-background\"><tbody><tr><td><\/td><td><strong>Flexible<\/strong><\/td><td><strong>Moderate<\/strong><\/td><td><strong>Strict<\/strong><\/td><\/tr><tr><td><strong>Notice amount<\/strong><\/td><td>24 hours&nbsp;<\/td><td>5 days<\/td><td>14 days<\/td><\/tr><tr><td><strong>Canceling before the deadline<\/strong><\/td><td>Full refund<\/td><td>Full refund<\/td><td>Full refund<\/td><\/tr><tr><td><strong>Canceling after the deadline<\/strong><\/td><td>Guest is charged the full amount for the first night<\/td><td>Guest is charged the full amount for the first night and refunded 50% for the remaining nights<\/td><td>If canceled between 7 and 14 days before arrival, the guest is refunded 50% for the bookingWithin 7 days, no refund is given<\/td><\/tr><tr><td><strong>Canceling after check-in<\/strong><\/td><td>Guest is charged the full amount of each night stayed plus one additional night<\/td><td>Guest is charged the full amount of each night stayed plus one additional night, and refunded 50% for the remaining nights<\/td><td>No refund is given.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Usually the flexible or moderate policies work best, but that depends on your location, season, and types of travelers you\u2019re looking for.<\/p>\n\n\n\n\n\n<p>The trick for short-term rental and Airbnb renovations is to make budget-friendly upgrades that add value. Kitchen makeovers and bathroom upgrades can get pricey, but when done well, they\u2019ll make your rental worth every penny.&nbsp;<\/p>\n\n\n\n<p>Here are a few other renovations to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Paint your kitchen cabinets<\/li>\n\n\n\n<li>Install new flooring<\/li>\n\n\n\n<li>Add extra storage space<\/li>\n\n\n\n<li>Put in a coffee nook<\/li>\n\n\n\n<li>Freshen up your walls<\/li>\n\n\n\n<li>Install crown molding<\/li>\n\n\n\n<li>Add an accent wall<\/li>\n\n\n\n<li>Give the place some personality<\/li>\n<\/ul>\n\n\n\n\n\n<p>Furnishing a rental or Airbnb is tricky: you\u2019ve got to provide everything your guest may need without blowing your budget.<\/p>\n\n\n\n<p>Here\u2019s our four step guide for furnishing your rental:<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Who is Staying There?<\/h4>\n\n\n\n<p>A couple\u2019s romantic beach house getaway and a cabin for a family of eight will require very different items. Think about who\u2019s going to use the space, and what types of furnishings will compel them to hit the \u2018reserve\u2019 button.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Create a checklist<\/h4>\n\n\n\n<p>What does each room already have, and what does it need? For your inspiration, we started a list, but ideally, you\u2019ll want to create a spreadsheet:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-theme-blue-dark-color has-slate-200-background-color has-text-color has-background\"><tbody><tr><td><strong>Room<\/strong><\/td><td><strong>Item<\/strong><\/td><td><strong>Desired Qualities<\/strong><\/td><\/tr><tr><td>Bedroom<\/td><td>Bedframe<\/td><td>SturdyStorage optionsCan survive wear and tear<\/td><\/tr><tr><td>Bedroom<\/td><td>Mattress<\/td><td>Memory foamAt least 8 inches in height<\/td><\/tr><tr><td>Bedroom<\/td><td>Mirror<\/td><td>Full length<\/td><\/tr><tr><td>Kitchen<\/td><td>Coffee maker<\/td><td>Keurig<\/td><\/tr><tr><td>Kitchen<\/td><td>Serveware<\/td><td>Matching set of plates and bowls<\/td><\/tr><tr><td>Living Room<\/td><td>Sofa<\/td><td>Seats 6 comfortably<\/td><\/tr><tr><td>Dining Room<\/td><td>Table<\/td><td>Wooden table, 6 chairs<\/td><\/tr><tr><td>Bathroom<\/td><td>Bath and hand towels<\/td><td>Matching set<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>HGTV shows can lead you to believe that a house flip is easy and glamorous. It\u2019s not. You have to do your research to know if you\u2019re buying and selling at the right price. The repairs needed require physical labor, and you\u2019ll need the right team of people to do aspects of the flip you can\u2019t. Also, if things go wrong, you could lose money instead of turn a profit.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Create a Budget<\/h4>\n\n\n\n<p>Research each of the items listed on your checklist, and write down their estimated costs. Once you add everything up, you should roughly know how much getting everything will cost. If it\u2019s more than you\u2019ve budgeted for, consider using cheaper alternatives, at least for your first bookings. There\u2019s nothing wrong with browsing Facebook marketplace or <a href=\"http:\/\/craigslist.org\" target=\"_blank\" rel=\"noopener\">Craigslist<\/a> to find items to furnish your property.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-theme-blue-color has-text-color\">Listen to Guest\u2019s Feedback<\/h4>\n\n\n\n<p>Ask your guests how they enjoyed their stay, and if there\u2019s anything they\u2019d like to see change. If you start getting complaints about certain items, switch them out.<\/p>\n\n\n\n<p>Also, don\u2019t forget that you\u2019re in the hospitality business now. Thank them for their input!<\/p>\n\n\n\n\n\n<p>Before you do anything, hire a photographer to take high-quality photos. In the vacation rental world, visuals are <em>everything<\/em>. If your high-resolution photos make your rental look like $1,000,000, you can get away with charging a premium. If the photos look like they were taken with an iPhone 3, most prospective renters will scroll right past it.&nbsp;<\/p>\n\n\n\n<p>Here are a few more tips for short-term rentals:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Build a website<\/li>\n\n\n\n<li>Post photos and videos on social media<\/li>\n\n\n\n<li>Reach out to your local tourism board<\/li>\n\n\n\n<li>Join an online short-term rental group&nbsp;<\/li>\n\n\n\n<li>Respond to reviews\u2014especially the bad ones<\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/www.airbnb.com\/host\/homes\" target=\"_blank\" rel=\"noreferrer noopener\">Marketing on Airbnb:<\/a><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/2vKnrlootCJTW1Lppc2MsnXwl1eLIo4_5fzJk6LV_sWcxb5-NlihdU5jvbz95uoKwHRJewVz44WV2MRadMrutrE3d1HItqKvfaB_Ym8Eg108DkCs3XlslQJVLdoVNLtkSgxFRtykqwYnta3gikYJKVTsblf37qN6AEjdcq9IFXj5P0CMMMw1lkL27g\" alt=\"Airbnb Become a Host\" title=\"\"><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Start by selecting \u201cBecome a Host\u201d on the home page, then follow all the basic setup instructions and enter information about your location, home type, number of guests, etc.&nbsp;<\/li>\n\n\n\n<li>Next, upload your high-quality photos. The first 3 are the most important.&nbsp;<\/li>\n\n\n\n<li>Write short, quick descriptions. Bullet points go a long way.<\/li>\n\n\n\n<li>Fill out your booking setting and set up your calendar<\/li>\n\n\n\n<li>Consider using Airbnb\u2019s Smart Pricing tool, at least to get yourself started. You may want to reduce your price a little to get bookings started.<\/li>\n<\/ul>\n\n\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"The 5 Steps to Making Short-Term Rental Millions (Part 1)\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/g3wsAl8EPIY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading alignwide has-slate-300-background-color has-background\" id=\"other\">Other Short-Term Rental Options<\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>If you don\u2019t want to go fully independent, but don\u2019t feel like depending on Airbnb either, here are a few other sites to check out:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.vrbo.com\/\" target=\"_blank\" rel=\"noopener\">VRBO<\/a> &#8211; VRBO\u2019s (vacation rental by owner) tagline is \u201cthe most popular vacation rental site in the US.\u201d They specialize in private apartments and houses, not shared spaces.&nbsp;<\/li>\n\n\n\n<li><a href=\"https:\/\/www.booking.com\/\" target=\"_blank\" rel=\"noopener\">Booking.com<\/a> &#8211; Booking.com has grown its number of vacation rentals in the last few years. You can list your property for free, but must pay a 15% booking commission.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.homestay.com\/\" target=\"_blank\" rel=\"noopener\">Homestay.com<\/a> &#8211; Homestay.com has vacation rentals and private room rentals in over 160 countries, and specializes in private rooms and solo traveler accommodations.&nbsp;<\/li>\n<\/ul>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide\"\/>\n\n\n\n<div class=\"wp-block-group has-slate-200-background-color has-background is-vertical is-layout-flex wp-container-core-group-is-layout-8cf370e7 wp-block-group-is-layout-flex\">\n<p class=\"has-theme-blue-color has-text-color\"><strong>Are you ready to become a short-term rental property owner? Check out some of our other helpful resources below!<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Read the <a href=\"https:\/\/store.biggerpockets.com\/search?q=airbnb&amp;options%5Bprefix%5D=last\" target=\"_blank\" rel=\"noreferrer noopener\">BiggerPockets books on Short-Term Rental Investing.<\/a> <\/li>\n\n\n\n<li>Ask questions in the <a href=\"https:\/\/www.biggerpockets.com\/forums\/530\" target=\"_blank\" rel=\"noreferrer noopener\">BiggerPockets Short-term Rental and Airbnb Investing<\/a> community forums.&nbsp;<\/li>\n\n\n\n<li>Watch more videos about <a href=\"https:\/\/www.youtube.com\/c\/biggerpockets\/search?query=short-term%20rental\" target=\"_blank\" rel=\"noreferrer noopener\">Short-Term Rentals from BiggerPockets.<\/a><\/li>\n\n\n\n<li>Find <a href=\"https:\/\/www.biggerpockets.com\/resources\" target=\"_blank\" rel=\"noreferrer noopener\">The Ultimate Guide to Short-Term Rental Investing and so much more.<\/a><\/li>\n\n\n\n<li>Enroll in the <a href=\"https:\/\/www.biggerpockets.com\/bootcamp\" target=\"_blank\">Short-Term Rental Bootcamp.<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n<div style=\"height:46px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n    \n  <div \n    x-data=\"frictionlessSignupForm()\" \n    id=\"frictionless_signup-block_6324ca3e393f5\" \n    class=\"items-center frictionless_signup flex flex-col\">\n\n    <div class=\"flex flex-col\" :class=\"{'hidden' : !isSignedUp, 'flex' : isSignedUp}\">\n      <span class=\"flex justify-center text-4xl text-center font-bold\">Thank You!<\/span>\n      <span class=\"flex justify-center text-lg text-center\">Create your account password at Biggerpockets.com\/signup or by clicking the link we sent via email. <\/span>\n    <\/div>\n\n    <div class=\"flex-col\" :class=\"{'hidden' : isSignedUp, 'flex' : !isSignedUp}\">\n      <span class=\"flex justify-center text-4xl text-center font-bold\">Interested in more real estate investing guides?<\/span>\n      <span class=\"flex justify-center text-lg text-center\">Create a free BiggerPockets account to get access to additional resources, our 3x weekly newsletter, and 5 free analysis reports.<\/span>\n    <\/div>\n\n    <div class=\"w-full sm:w-fit py-8 flex-col sm:flex-row gap-4\" :class=\"{'hidden' : isSignedUp, 'flex' : !isSignedUp}\">\n      <div class=\"sm:w-48 flex flex-col\">\n        <label for=\"investorTypeDD\" class=\"flex-1\">Investor Type<\/label>\n        <select id=\"investorTypeDD\" x-model=\"investorType\" class=\"flex-initial h-9 w-full focus-visible:outline-none border-gray-400 text-black\">\n          <option value=\"investor\">Investor<\/option>\n          <option value=\"agent\">Agent<\/option>\n          <option value=\"lender\">Lender<\/option>\n          <option value=\"company\">Company<\/option>\n        <\/select>\n      <\/div>\n\n      <div class=\"flex flex-col\">\n        <label for=\"investorEmailAddress\" class=\"flex-1\">Email address<\/label>\n        <div class=\"flex-initial h-9 w-full\">\n          <input\n            id=\"investorEmailAddress\"\n            x-model=\"email\"\n            type=\"text\"\n            placeholder=\"Your Email\"\n            class=\"lg:w-80 w-full rounded-l-sm grow focus-visible:outline-none\"\n            :class=\"{'border-red-500' : errors, 'border-gray-400' : !errors}\"\n          \/>\n          <div x-show=\"errors\" x-cloak class=\"absolute text-red-500 text-sm\">\n            <div class=\"flex items-center\">\n              <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-4 w-4\" fill=\"none\" viewBox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\">\n                <path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M12 8v4m0 4h.01M21 12a9 9 0 11-18 0 9 9 0 0118 0z\" \/>\n              <\/svg>\n              <span x-text=\"errors\" class=\"ml-2\"><\/span>\n            <\/div>\n          <\/div>\n        <\/div>\n      <\/div>\n\n      <div class=\"mt-4 sm:mt-0 items-center flex flex-col-reverse\">\n        <button x-on:click=\"submit()\" class=\"flex-initial w-28 border-none rounded-l-none rounded-r-sm  inline-block no-underlinehas-background has-theme-blue-background-color has-text-color has-white-color px-3 py-1\"> \n          Sign Up        <\/button>\n      <\/div>\n\n    <\/div>\n\n    <div class=\"justify-center\" :class=\"{'hidden' : isSignedUp, 'flex' : !isSignedUp}\">\n      <span class=\"text-sm  text-center\">\n        By signing up, you agree to the BiggerPockets\n        <a href=\"https:\/\/www.biggerpockets.com\/terms\" class=\"no-underline\" target=\"_blank\">Terms &#038; Conditions<\/a>\n      <\/span>\n    <\/div>\n    \n  <\/div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Short-term rental properties are as popular as ever. Between vacation rentals and short-term rental sites like Airbnb, property owners are enjoying a heyday in the short-term rental market.&nbsp; By the [&hellip;]<\/p>\n","protected":false},"author":613613,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-145152","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/pages\/145152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613613"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=145152"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/pages\/145152\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=145152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}