When the Numbers Stop Working: Why One Investor Pulled the Plug on Airbnb

[Pedro Andrade]

Last week, I spoke with a client who bought his first investment property back in 2020 with plans to run it as an Airbnb. At the time, everything looked great on paper — low interest rate, hot short-term rental market, and strong demand.

Fast forward to 2024:

• Insurance premiums more than doubled

• Property taxes went up

• Bookings dropped significantly

• And the cleaning & turnover costs started to erode the already-tight margins

After running the updated numbers, he realized what many are starting to face — the short-term rental model wasn’t giving him the freedom or returns he hoped for. It was barely breaking even — and more importantly, he felt stuck.

So, he made the hard decision: Sell the property and re-deploy the equity into a more passive and predictable strategy.

Here’s the lesson: Even good investments don’t stay good forever. Markets shift, expenses rise, and if you’re not running your numbers regularly, you might be holding onto something for emotional reasons — not financial ones.

Curious to hear from others:
Have any of you pivoted from short-term rentals back to long-term holds or sold off a property because the math stopped working?
What was the trigger point for your decision?

[Steve K.]

I was talking to a client the other day who made a funny but true comment that got me thinking: they have done extremely well with their property but would have done almost equally as well if it had been vacant the whole time they’ve owned it. The rental income is small potatoes for them compared to the real bread and butter which is the appreciation that they have had over time. They were joking about just skipping the tenant headaches and keeping their properties vacant from now on.

Of course it's better to have someone living there to keep the property up and for that extra income, but my point is that in a really good location, the rental income is secondary to appreciation. With an STR, it's more of a business than a traditional real estate investment, and location is even more important. In the best locations, a property will do well regardless of the vacancy rate/ operational side of things simply because the land and location are going to increase in value by enough to offset any operational hiccups. Not so much in bad locations that are boom/bust or for properties where the underwriting depends entirely on low vacancy rate and smooth operating, which doesn't always happen. Location, location, location with strong fundamentals that isn't reliant on one single factor which ebbs and flows.