STR markets fall into three buckets: destination (Smokies, beach, mountain ski), urban (city Airbnbs in Nashville, Austin, Charleston), and event-driven (Vegas, Orlando theme park, F1 markets). Each has different seasonality, occupancy patterns, and regulatory risk.

AirDNA is the dominant data source. Look at the Rentalizer for the specific subject address: median revenue, top 25% revenue, occupancy by month, and ADR (average daily rate). A property in the top 25% of its market should be your underwriting target - if you're budgeting median performance, you'll be disappointed.

Regulatory risk: every market has STR rules. Some are state-preempted (Florida, Arizona - cities can't ban). Some are city-by-city (most others). Some are tightening fast (Denver primary-residence-only, Asheville zone-restricted, Nashville Type-2 capped). Check the local ordinance BEFORE making an offer, not after.

Gross revenue: pull AirDNA Rentalizer for the address. Use the median or 50th percentile as your base case, top 25% as your stretch case. Don't plan on top 10% performance.

Operating expenses (typically 25-35% of gross): cleaning fees (often pass-through), platform fees (Airbnb 3%, VRBO 5-8%), property management (20-30% of gross if outsourced), supplies, maintenance, utilities (you pay them, not the guest), insurance (STR-specific is 2-3x homeowners cost). Net to roughly 65-75% of gross before debt service.

Cap rate calculation: NOI / property cost. STR cap rates run 6-10% in most markets. Below 6%, you're paying for appreciation, not cash flow. Above 10%, the property is risky or the market is tightening.

Standard DSCR loans use long-term-lease comparable rent (1007 form) - this typically underqualifies STR properties because LTR comp income is much lower than achievable STR income. STR-DSCR loans use AirDNA Rentalizer projections, T6/T12 trailing statements, or PriceLabs revenue reports as the qualifying income.

Underwriting math: STR-DSCR programs apply a 20-25% expense ratio to gross AirDNA or T12 income, then divide by PITIA to get DSCR. Example: $80K projected gross × 75% = $60K net for DSCR purposes. $60K / $48K PITIA = 1.25 DSCR.

Lender verifies: (1) local STR ordinance permits operation; (2) HOA bylaws don't prohibit STR; (3) AirDNA report is current and matches subject address. STR-DSCR rates run 0.125-0.5% above standard DSCR.

Self-manage vs. property management: self-management saves the 20-30% PM fee but consumes 5-15 hours per week per property. Property management buys you back the time at the cost of margin. Most investors self-manage 1-3 properties, then hire PM at 4+.

Cleaner is the bottleneck operationally. A reliable cleaner who can do a same-day turnover is the difference between 90% occupancy and 70%. Recruit before scaling.

Dynamic pricing: PriceLabs and Wheelhouse adjust nightly rates based on demand. Investors who use dynamic pricing typically earn 15-25% more than flat-rate listings. The tools cost ~$20-30/month per property.

Underwriting at top-quartile AirDNA. Reality almost never meets the rosy projection. Underwrite at median and treat top-quartile as upside.

Ignoring regulatory risk. Buying in a market where STRs may be banned in 12-24 months is a bet you can't hedge. Coastal Florida is permissive; Denver is restrictive; mountain town rules are tightening fast.

Skimping on furnishing. STR guests judge the listing on the photos and review the experience on the comfort. $20-40K furnishing budget for a 4BR is normal in serious markets. Cheap furnishings = poor reviews = price erosion.

Mixing personal and STR use. The IRS has strict rules about personal use of an STR - 14+ personal days/year converts a rental to a "vacation home" with reduced deductibility. Consult a CPA before mixing use.