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Have done both and personally I prefer long term rentals, which is all I have now. There are potentially higher returns in short term depending on the location but it comes with more drawbacks. Here are my thoughts based on my experience:
Short term: There can be lot of variability/seasonality in the short term market, guests don’t tend to take as good of care of the place, and with high turnover/cleaning/etc comes more work, costs, and headaches. Trash/recycling, yard maintenance, restocking items, laundry, answering inquiries/messages is on you (or pay for outsourcing, which cuts into margin and you still have to oversee quality). You also have to deal with ratings and reviews, which despite your best efforts can be very skewed with little recourse.
Long term: Overall margin is lower but I get a rent check the 1st of every month, and unless there is an issue I don’t hear from them. Sometimes I go multiple months without a word, other times I’ve had multiple maintenance calls in a month. It’s in the lease that yard maintenance and trash/recycling is their responsibility. It’s just overall easier in my opinion, especially as it’s a side hustle and not a full time gig. I will say the experience can be dependent on the quality of tenants you get, so choose/screen wisely.
Mentor
Yup, this is spot on
You can simulate both on housalyzer.com. Best free tool out there.
Mentor
We have long-term, but probably going to be selling them soon, too much of a hassle to manage in another state…
But what really matters is your CapRate… (Net Income / Purchase Price)… you want to keep that over 5% if possible…we use a “Rolling” CapRate… (Net Income / Current Value), and based on that we determine if it still makes sense to own it…
One you’re determining the profitability of the property at purchase… the other one you’re determining whether the rental market is keeping pace with the price appreciation of the property…
Mentor
There’s advantages and disadvantages to both.
Long term rentals are more consistent and predictable. Short term rentals can have more cashflow, but are a lot more work and a lot more volatile.
If you buy right, either can be great. But either can also be a headache if you buy wrong.
Interesting take on the real estate bowl – the market really is more competitive and unpredictable than ever. Having reliable insights in the middle of research makes a big difference, and resources like https://leecountypropertyappraiser.org can help keep things grounded. I think staying informed is key as trends shift quickly. Great discussion and looking forward to more perspectives.
depends how hands on u want to be. short term more work, long term less work. Watch out for property managers, they can be bad even with good reviews.
100% agree. Getting a property manager is always a crapshoot, and a last resort IMO. They’ll make kickback deals, will often cut corners, and won’t search for the best price when work needs to be done… it’s not their money so they don’t care. This is especially true if you live in a state/city other than where your rentals are.
Best advice I got on this: A short term rental is like a side job; you have to run it and keep up with it. A long term rental is relatively more of a set and forget (for months at a time, at least).
Have not had experience or considered using a service to manage a short term rental, which I guess is a thing.
The one advantage of owning STR's is the ability to be recognized as a real estate professional, which can save you taxes.
Aside from that, there are a ton of tenant headaches, fees, and coordination required for turnover. There's also legal considerations based upon the area you plan to have your STR in, which can change at any time.
You can also look into mid-term rental, for traveling nurses, etc.
Subject Expert
STR’s actually don’t qualify as rentals as it relates to REPS. But I know what you’re alluding to as it relates to material participation.
Short-term beach rentals can generate strong cash flow, but they’re highly seasonal and come with more hands-on management and regulatory risk. Long-term rentals tend to be steadier, with fewer turnovers and more predictable expenses, which can be helpful for a first deal. When I’m comparing markets and strategies, I like grounding decisions in local data and records—resources lik https://duvalcountypropertyappraiser.org can be useful for understanding ownership trends and valuation patterns. It really comes down to your risk tolerance, time commitment, and whether you want income stability or higher upside with more variability.
From what I’ve seen, short-term beach rentals in Texas can do well during peak seasons but come with higher management and vacancy swings. Long-term rentals are usually steadier, easier to forecast, and less hands-on if you’re just starting out. When comparing options, it really helps to study local demand, taxes, and valuation trends using data like https://polkcountypropertyappraisers.org to understand how numbers shift over time. Personally, I’d lean toward whichever model best matches your risk tolerance, time commitment, and cash-flow goals.