This put short-term rentals on the map and made investing in these properties accessible to a wider audience. People who would have likely never considered owning investment real estate now have one or even multiple properties that give them a tidy profit. But there are catches.
A person can't purchase a property just anywhere and expect a good return. There are good areas for short-term rentals and not-so-good areas. Additionally, buying a property for a reasonable price and earning enough rental income to cover monthly expenses isn't as straightforward as it sounds.
Short-term rentals offer impressive potential for a pretty healthy cash flow. However, there's more to this venture than meets the eye. Investors face certain challenges that long-term rental properties do not present.
The short-term rental market has become highly competitive, so investors must more carefully maintain properties and monitor the business end of the venture. Regulations for short-term rentals vary from state to state and even within cities and counties. New York City enacted short-term rental restrictions in 2023 .
Several California communities , especially in vacation heavy Los Angeles and Orange County have very specific guidelines and fees. Investors must stay abreast of their region’s regulations. So, while short-term rentals are easier to run than other real estate investments and offer extra cash flow and tax benefits, drawbacks include higher costs due to frequent turnover and varied mo.
