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Short-Term Rental (STR)
A property rented for short stays (typically under 30 days), often listed on platforms like Airbnb and VRBO.
Definition
Short-term rentals are properties leased for brief stays, typically less than 30 days, and marketed through platforms like Airbnb, VRBO, and Booking.com. STRs can generate significantly higher gross revenue than long-term rentals, especially in tourist destinations or high-demand urban areas. However, they also come with higher operating costs, more management intensity, and income volatility tied to seasonality and local regulations. Many municipalities have enacted STR restrictions ranging from permit requirements to outright bans. Investors must research local regulations, HOA rules, and insurance requirements before pursuing this strategy.
How This Relates to DSCR Loans
DSCR lenders increasingly offer STR-specific programs using projected short-term rental income from platforms like AirDNA. Some lenders require 12 months of STR income history to qualify.
Related Terms
Midterm Rental
A furnished property rented for 1-6 months, often to traveling professionals or relocating tenants.
Vacancy Rate
The percentage of time a rental property is unoccupied and not generating income.
Cash Flow
The net money remaining after all income is collected and all expenses and debt payments are made.
Condotel
A condominium unit within a hotel that can be rented out as a short-term accommodation.
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