What is STR Real Estate? What You Need To Know

Short-term rental (STR) real estate is a type of property that is rented out for fewer than 31 days to the same tenant. STRs are also known as vacation rentals or Airbnb rentals.

Real Estate
Real Estate

In this article, we will discuss what STR real estate is, how it works, and important things to know before investing in STR property.

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What is STR Real Estate?

STR real estate is generally defined as property that is rented for fewer than 31 days to the same tenant.

Examples of STR real estate include:

  • Vacation rental homes listed full time, such as an Airbnb business
  • Second homes that are rented out part of the time
  • A spare bedroom rented out of a primary residence, known as house hacking

How Does STR Real Estate Work?

STR real estate works by renting out a property for a short period of time, usually less than 31 days.

STRs are typically rented out to vacationers, business travelers, or anyone else who needs a place to stay for a short period of time.

STRs are often more expensive than long-term rentals, but they can also generate higher annual gross rental incomes.

Important Things to Know Before Investing in STR Property

Investing in STR property can be a great way to generate passive income, but there are some important things to know.

Here are some key takeaways:

  • STRs have higher operating expenses than long-term rentals.
  • Annual returns from STR real estate can be the same or more compared to a property rented in the long term.
  • Tenant turnover is higher for STR properties than long-term rentals.
  • STRs are subject to more regulations than long-term rentals.
  • STRs require more maintenance than long-term rentals.

Conclusion

STR real estate is a growing market that can offer investors higher annual gross rental incomes and more flexible use of the property.

However, investing in STR property requires careful consideration of the risks and rewards.

By understanding what STR real estate is, how it works, and important things to know before investing.

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