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- Short Term Rentals: Big Cash Flow or Big Headache?
Short Term Rentals: Big Cash Flow or Big Headache?
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The Pros and Cons of Short Term Rentals
✅ The Benefits:
Higher Cash Flow Potential
Done right, an STR can double or triple the monthly income of a traditional rental.
Flexibility
Use the property yourself when you want. Block off dates. Adjust pricing dynamically.
Tax Advantages
If structured right, you can use accelerated depreciation and other tax perks. (Talk to your CPA—seriously.)
Market Appeal
STRs can be especially profitable in tourist areas, college towns, medical hubs, and big event cities.
Exit Options
If it doesn’t work out, you can pivot to long-term rental or sell—you're not locked in.
⚠️ The Risks:
Higher Turnover & Management Demands
Guests in, guests out—every 2–3 days. More cleaning, more maintenance, more communication.
Regulatory Crackdowns
Cities change STR rules all the time. One new ordinance could wreck your numbers overnight.
Market Saturation
Some areas are flooded with Airbnbs, driving prices and occupancy rates down.
Seasonality
STR income often fluctuates with tourism seasons. (Snowbirds aren’t renting beach houses in August.)
Higher Costs
Furnishings, utilities, amenities, cleaning crews—it’s more overhead than you think.
🔥 Pro Tip:
In an area with regulatory uncertainty or simply to have less financial risk, consider leasing with a Master Lease (long-term) and the sub-leasing as short-term.
🧠 Final Thought:
Short-term rentals can be wildly profitable—but they’re also a real business, not a passive investment.
Treat them like a business from Day One, or they’ll treat you like a chump by Day 100.