Short-term vacation rentals can generate 2-3x traditional rental income—but require more management and face regulatory risks.
The Economics
Higher income potential, but also higher expenses: cleaning between guests, furnishings, utilities, and platform fees. Occupancy varies seasonally—a beach house might book 90% of summer but sit empty in winter.
Regulatory Risk
Many cities restrict or ban short-term rentals. Research regulations thoroughly before buying—they change frequently.
Management
Vacation rentals require hospitality-level service. Professional management costs 20-35% of revenue but handles everything. Dynamic pricing tools optimize nightly rates based on demand.