Definition: What “short‑term rentals” mean in real estate
A short‑term rental (STR) is a furnished residential property—house, apartment, condo, or a private room—rented for a limited period, typically from a single night to several months. In most markets a stay under 30 days is considered short‑term, though some jurisdictions use different thresholds (commonly up to 90 days or even six months).
Common examples and real‑world uses
Short‑term rentals serve a range of needs beyond leisure travel. Typical use cases include:
- Vacation rentals: Families or tourists rent beachfront condos or mountain cabins for a week or a weekend via platforms like Airbnb, Vrbo, Booking.com or Expedia.
- Business travel: Consultants or remote workers book furnished studios for a few days or weeks to be close to client sites or downtown offices.
- Relocation and temporary housing: Individuals moving cities may rent a furnished apartment for several months while house hunting or waiting for a long‑term lease to begin.
- Event‑based stays: Homeowners in host cities rent properties short‑term during conferences, festivals or sporting events at premium rates.
- Investment properties: Investors buy units in high‑demand areas and list them as STRs to capture higher per‑night revenue than standard long‑term leases.
- Corporate housing: Companies secure furnished apartments for employees on temporary assignments, often with included services like utilities and housekeeping.
Key features of short‑term rentals
- Furnished and equipped: STRs normally include furniture, kitchenware, linens, Wi‑Fi and basic utilities.
- Flexible stay lengths: Bookings can range from one night to several months.
- Online booking and reviews: Most bookings occur through listing platforms that manage payments, reviews and guest communication.
- High turnover: Frequent guest changeover increases cleaning, maintenance and management needs.
- Dynamic pricing: Nightly rates fluctuate with seasonality, demand, local events and competition.
How short‑term rentals affect the real estate market
- Higher potential income: In tourist or high‑demand urban areas, STRs can generate more gross revenue than long‑term rentals on a per‑month basis.
- Housing availability and affordability: A surge in STR listings can reduce the stock of long‑term rental housing, contributing to affordability concerns in some cities.
- Operational complexity: STRs require active management—cleaning, guest communication, key exchange and compliance with rules—which drives demand for professional property managers.
- Regulatory response: Cities often impose permits, taxes, registration requirements, restricted zoning, or caps on the number of active short‑term rentals to address neighborhood impacts.
Typical operational considerations for owners
- Local rules and taxes: Verify zoning, licensing, occupancy limits and short‑term rental taxes before listing.
- Insurance and liability: Standard homeowner policies may not cover STR activity; specialized insurance is often recommended.
- Guest screening and house rules: Clear rules, security deposits and guest screening minimize damage and neighborhood complaints.
- Pricing strategy: Use seasonal and event‑driven pricing, minimum stays and promotional rates to maximize occupancy and revenue.
Quick examples
- Vacation: A family books a beachfront condo for one week on Airbnb.
- Business: A contractor rents a furnished studio for two weeks near a job site.
- Relocation: A person rents a furnished apartment for three months while searching for a permanent home.
- Event: A homeowner lists their house at higher rates during a city festival or convention.
Bottom line
Short‑term rentals are flexible, furnished properties rented for brief periods and used for vacations, business trips, relocations, events and investment income. They offer higher revenue potential and convenience but bring operational demands and regulatory scrutiny. Before renting out or booking an STR, check local regulations, insurance requirements and the expected management workload.
