My wife and I purchased our starter home in 2019 in Louisville, KY. we have outgrown our home and are looking to upsize. We want to keep our home as a rental but we are not sure if we should do a long term rental or go the short term airbnb route. We have a large yard and I have completely remodeled the basement and kitchen. My worry is that the landscaping needs and recent remodels that are higher end relative to the neighborhood, may not be the best for a long term rental. I am 1 mile from the expressway and 5 minutes to downtown so I am in a prime location for both. Long term would be more steady but for some of the larger events in town, such as the Kentucky Derby, I could get $4,000-$5,000/wk for Airbnb.
Keeping things high level, what would everyone suggest or what things do I need to consider?
What a great dilemma, those are great options, but in Louisville, as in Lexington, the laws are really strict on Short Term Rentals. The outer lying areas are not, but within the city there are permits to get that are very difficult for new short term renters. I would definitely call the city and see what they will require of you before you make this decision.
It sounds like you're in a fantastic position, exploring exciting opportunities to maximize your property's income! Let's dive into how we analyze the Long-Term Rental (LTR) vs. Short-Term Rental (STR) potential, especially here in Boise, Idaho.
You're right, we often see STR revenues generating approximately 2x the income of traditional long-term rents in this market, but it comes with different operational considerations.
Here's how we typically approach the analysis for our clients:
1. Determining Market Rent Potential: * Long-Term Rentals (LTR): We start by researching comparable properties on platforms like Zillow and HotPads in the local area. We cross-reference this with tools like Rentometer to get a confident idea of the prevailing long-term rental rates. * Short-Term Rentals (STR): For STR potential, we utilize specialized tools like STRIQ and AirDNA. These give us insights into what similar properties can generate in the short-term market.
2. Assessing Competitiveness & Amenities: * Once we have STR projections, we meticulously review the photos and amenities of top-performing properties on platforms like STRIQ. This helps us understand what it takes to compete and, more importantly, what "extra" amenities you could offer to generate more bookings and memorable stays (e.g., a pool table, table tennis, cornhole). Many guests are looking for unique amenities or an experience beyond just a place to sleep.
3. Understanding Operational Differences:
Aspect
Long-Term Rental (LTR)
Short-Term Rental (STR)
Management
Generally more hands-off after initial screening.
Operates more like a hospitality business.
Communication
Less frequent, primarily for issues/renewals.
Consistent pre-, during, and post-stay guest communication.
Turns
Infrequent (e.g., once a year or less).
High frequency (4-8 turns per month), requiring regular cleaning/scheduling.
Performance
Stable, consistent monthly income.
Rating-driven (service, amenities, space directly impact bookings).
PM Fees
Typically 7-10% of gross rent in our market.
Typically 20-25% of gross revenue in our market.
4. Local Regulations & Compliance: * Crucial: Always verify with your local government (city/county) for any specific restrictions, permits, or licensing requirements for short-term rentals to ensure full compliance.
5. Property Maintenance (LTR Self-Management): * If you plan to self-manage LTRs, we've found it effective here in Boise, Idaho to conduct walkthroughs approximately 90 days after move-in and again 60 days prior to move-out/renewal. This helps maintain the property and catch potential issues early.
Ultimately, the best choice depends on your personal goals and desired level of involvement. Whatever you decide, commit to being the best in your chosen strategy!
Feel free to reach out if you have any specific questions as you analyze your options.
What a great dilemma, those are great options, but in Louisville, as in Lexington, the laws are really strict on Short Term Rentals. The outer lying areas are not, but within the city there are permits to get that are very difficult for new short term renters. I would definitely call the city and see what they will require of you before you make this decision.
What a great dilemma, those are great options, but in Louisville, as in Lexington, the laws are really strict on Short Term Rentals. The outer lying areas are not, but within the city there are permits to get that are very difficult for new short term renters. I would definitely call the city and see what they will require of you before you make this decision.
Debbie
Thanks Debbie! I actually just applied this morning for the STR permit. Even if I ultimately choose long term, I think it would be advantageous to have the permit due to the 600’ rule and they seem to be all around me.
If you do not get approved for STR, you could consider midterm rental (MTR). Travel nurses typically seek fully furnished homes for 1–3 month stays. Utilities, WiFi, in-unit laundry, and proximity to hospitals are top priorities. I’ve rented to nurses for 3 years and there has been no damage other than a chip plate or bowl. The pricing potential is strong — owners in smaller markets often earn $2,000–4,000/month, occasionally more during peak events. Another MTR lead could be local insurance companies seeking to place displaced families while their homes are being repaired after fire, flood or other damage.
Being 5 minutes from downtown and near hospitals puts you in Range of placements in Louisville serving Norton, U of L, Jewish, etc. Mid‑term listings in your area (2 br condos) rent for around $2,000/mo; bigger homes can reach $3,500+/month
My wife and I purchased our starter home in 2019 in Louisville, KY. we have outgrown our home and are looking to upsize. We want to keep our home as a rental but we are not sure if we should do a long term rental or go the short term airbnb route. We have a large yard and I have completely remodeled the basement and kitchen. My worry is that the landscaping needs and recent remodels that are higher end relative to the neighborhood, may not be the best for a long term rental. I am 1 mile from the expressway and 5 minutes to downtown so I am in a prime location for both. Long term would be more steady but for some of the larger events in town, such as the Kentucky Derby, I could get $4,000-$5,000/wk for Airbnb.
Keeping things high level, what would everyone suggest or what things do I need to consider?
thank you!!!
@Jonny Pohlgeers like @Debbie Burgett said you are likely not going to get approved for STR at this time in L-ville but you are welcome to try. P&Z would be able to tell you though the likely hood of that approval. If you did get approved that would be great though. MTR could also be a good back up option as @Kathleen Osborne said.
REI James w/ eXp Realty54 Reviews