Short-term rentals average 8% to 12% ROI, but it’s getting harder to make a profit.
According to a joint report by Airbnb, VRBO, STR, and Datarade, occupancy rates have declined since 2021 while inflation, interest rates, insurance premiums and property management costs are all higher. Municipalities are imposing more regulations on rentals, and many vacation destination markets, like Lake Tahoe, are overly saturated with rentals.
You can still earn strong returns with a short-term rental—even in a less popular location—but guest expectations and competition are higher than ever. Remember, you’re selling an experience, so make the property as inviting and well-maintained as possible. Consider offering thoughtful extras like snacks, bottled water, and s’mores kits for the firepit. Include a detailed guide to local restaurants, attractions, and activities. Stock games, books, and ensure easy access to Wi-Fi. Avoid overloading guests with excessive rules or cleaning tasks at checkout.
Your goal is to drive repeat and referral business through standout hospitality, great communication, and consistent service.
