Short-Term Rentals: Is STR Right for Me?

By: Loreal Loftus

A short-term lease agreement lasts anywhere from three to six months or can go month-to-month until the tenant decides to move out. Long-term leases are anything longer than six months and can go up to 15 months before needing to make a new lease.

STRs can include a variety of properties, including:

Single-family homes, Condos, Townhomes, Apartments, RVs, Teepees, and Chuckwagons. 

STRs are often used as an alternative to hotels and can be 25–50% cheaper. They can also offer additional amenities, such as kitchens, washers and dryers, and some allow pets. 

When investing in STRs, it's important to consider the following:

• Local rules and regulations

Check with your city and HOA to understand the rules regarding short-term rentals in your area. 

• Financing

Lenders may not finance STRs, so you'll need to be clear about how you intend to use the property. 

• Taxes

Short-term rental income is considered active income, so you can deduct expenses and pay taxes on the profit. 

• Personal use

If you stay on the property more than 14 days or 10% of the days it's rented in a calendar year, the IRS may consider it a personal residence.