Is a Short-Term Rental Real Estate Business Right for You?

House icon and Key

• Starting a short-term rental business can be lucrative, flexible, and low-risk.

• Maintenance and security deposit losses should be taken into consideration.

• Consider using loans to purchase a property and create an engaging listing for each.

With the rise of Airbnb, many people are jumping on the short-term rental bandwagon. Renting a property for a few days or weeks can be attractive. The market is poised to grow faster, and it can be a great business to start in real estate. However, before you take the plunge and start your own short-term rental business, there are some things to consider. Here are some pros and cons to help you decide if this is the right move for you.


There are many benefits to starting a short-term rental business. Here are some of them:

Lucrative Earnings

The primary benefit of starting a short-term rental business is that it can be pretty lucrative. For example, if done correctly, you could make more money in one week than in one month with traditional leasing arrangements.


Additionally, there’s flexibility with a short-term rental, as you can choose when to accept reservations and when to decline them based on your schedule. This allows you to work around other commitments, such as family obligations and vacations, without worrying about missing out on potential income opportunities.

Low Risk

Lastly, it’s relatively low risk as there’s no long-term commitment, so if something doesn’t go according to plan, you can switch back to traditional leasing arrangements or look into other options.

A man paying rent


Alongside these benefits also come problems. Here are some of them:


Maintenance is one of the main issues you’ll face as a short-term rental owner. When renting out a property for just a few days or weeks, you’ll need to be prepared for any potential problems that may arise during this time. This could include plumbing, electrical, and other repairs, which can be costly and time-consuming.

Security Deposit Losses

Another con is the potential for losses due to security deposits. When you have multiple guests in your rental, there’s always a chance that something could go wrong, such as damage to the property or faulty appliances. These damages can result in significant losses if not paid for by the guest.


Lastly, the competition can be fierce in this business. With so many people now offering short-term rentals, you may find it challenging to stand out from the crowd and make a profit.

Tips to Get Started

Ultimately, starting a short-term rental business is not for everyone. It takes dedication, skill, and time to make it successful. Before taking the plunge, carefully weigh the pros and cons to decide if this is the right decision for you. If you want to get started in this industry successfully, consider following these tips:

A home that is for sale

Research Local Laws and Regulations

Before you dive headfirst into this business venture, you must familiarize yourself with the local laws and regulations regarding short-term rentals. Different cities have different rules and regulations when running a short-term rental business so make sure that you do your research beforehand. This is especially important if you plan to run a multi-unit property or rent out entire homes instead of just single rooms.

Find Your Target Market

Once you have familiarized yourself with the local laws, the next step is identifying your target market. Who are the people who will be renting out your properties? Are they families looking for vacation homes? Or are they individuals looking for an extended stay in the area?

It might be good to aim for tourists since their numbers are increasing now that the pandemic has subsided. Knowing your target market will help you determine which amenities should be included in each of your properties and how much rent should be charged for each listing.

Use Loans to Purchase a Property

You can use loans to purchase your first property if you don’t have the money right now. An affordable USDA loan can help you buy a property with no down payment, and then you can use the rental income to pay back the loan. It’s an intelligent way to get started and one you should consider.

Create an Engaging Listing

When it comes to short-term rentals, how your properties are advertised is vital. Create engaging descriptions and take high-quality photos of your properties so that they stand out from the competition. Additionally, offering special discounts or unique amenities will help attract more customers.

These are just some things to consider when starting a short-term rental business. With the right strategy and dedication, you can create a profitable business that offers excellent investment returns.

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