STR vs Long-Term Rental Calculator

In most markets, short-term rentals generate 2–3× more gross revenue than comparable long-term rentals. However, STR also comes with higher operating costs — platform fees, cleaning, utilities, and more active management. After all expenses, STR typically outperforms LTR in desirable vacation markets. In less touristy areas, the premium may not cover the added complexity.

STR hidden costs include: platform fees (3–15%), professional cleaning after every stay, higher utility bills (you pay, not guests), furnishing and replacement costs, consumables (soap, toiletries, paper goods), higher insurance premiums, and higher management time or fees. LTR hidden costs include vacancy periods, tenant turnover costs, and potential property damage. Use this calculator to see the full picture.

LTR vacancy is binary — your property is either rented or not, and vacancy typically means zero income for 1–2 months between tenants. STR "vacancy" is gradual — lower occupancy across many nights. A STR property at 50% occupancy still earns income every other night, whereas an LTR property in transition earns nothing. STR occupancy also varies dramatically by season, which this calculator models.

The transition depends on local regulations, your lease agreements, and financing terms. You'll need to check STR permit requirements in your city (many require registration), furnish the property completely, set up on platforms like Airbnb or VRBO, and ensure your mortgage and HOA allow short-term rentals. In regulated markets, the transition can take 60–90 days to fully execute.

Markets that favor STR tend to have: strong tourism or outdoor recreation demand, seasonal visitors (beach towns, ski resorts, national park proximity), undersupply of hotel inventory, relatively STR-friendly regulations, and ADR high enough to justify operating costs. Markets like Gatlinburg TN, Destin FL, and Scottsdale AZ consistently show STR outperforming LTR by large margins.

STR carries meaningfully higher regulatory risk than LTR. Cities can ban or severely restrict short-term rentals with relatively short notice, eliminating your income stream. LTR is governed by landlord-tenant law which is generally more stable. If you're investing in an STR market, research the regulatory environment carefully — check permit availability, pending legislation, and HOA rules before purchase.

STR management fees typically run 15–30% of gross revenue, compared to 8–12% for LTR. However, professional STR management handles guest communication, cleaning coordination, dynamic pricing, and maintenance — tasks that can consume 10+ hours per week for a self-managed property. For investors who own multiple properties or don't live nearby, professional management often pays for itself in reduced stress and better occupancy.

STRs with average stays under 7 days may qualify for different tax treatment than LTR. STR landlords may be able to actively participate in depreciation deductions (especially with cost segregation), potentially offsetting W-2 income if they qualify as a Real Estate Professional. LTR income is generally treated as passive. However, STR income may also be subject to self-employment tax in some jurisdictions. Consult a CPA familiar with real estate.