STR vs LTR: How Do You Decide After You Buy?

[Patrick McKeown]

The real difference between STR and LTR doesn't show up in underwriting, it shows up after you get the keys.

Short-term rentals absolutely have higher income potential, but they also demand a lot more from the property. It has to look good, photograph well, and hold up to constant use. What I see investors underestimate most is the ongoing upkeep on top of slow seasons and income swings. My point isn’t that STRs are a bad investment, but that you shouldn't just read the playbook and expect to win the game but to understand the unpredictability. 

Long-term rentals, on the other hand, are more stable. The income ceiling is lower while the risk is also lower. Tenants are easier to manage, repairs are more predictable, and when things go wrong, they usually go wrong in familiar ways. That predictability makes it easier to follow, especially when underwriting rehab and reserves.

I've seen both STR and LTR deals fall apart because the rehab was deeper than expected. Curious how others approach this, how do you decide on an exit strategy upfront, and in what situations have you had to pivot from one to the other?