Short-Term Rental (STR)
A furnished property rented to guests for stays typically shorter than 30 days at a time, usually marketed on platforms like Airbnb or Vrbo. Distinct from long-term leases and from mid-term corporate-style stays.
Definition
What is Short-Term Rental (STR)?
A short-term rental (STR) is residential real estate offered to travelers and other guests for relatively brief stays — commonly thought of as nightly to weekly bookings, though local law often defines “short-term” by a night count or a 30-day threshold. STRs are usually fully furnished, professionally photographed, and priced dynamically. Economics are driven by ADR, occupancy, fees, and operating workload rather than a single annual lease payment.
STR sits between hotels (same transient demand, but distributed inventory) and traditional long-term rentals (same asset class, but different tenant profile and regulation). STR investors accept higher turnover and operational intensity in exchange for higher gross income potential and flexibility to use or block personal dates in many setups.
Regulation is market-specific: permits, caps, primary-residence rules, and occupancy taxes vary by city and county. What qualifies as an STR for tax purposes (IRS material participation, average stay length) may differ from what the city calls a legal short-term rental. Always separate platform rules, municipal licensing, and federal tax classification in your diligence.
Real-world example
Scenario
A 3-bedroom cabin is rented to guests for 4–7 night stays year-round on Airbnb, with no single tenant exceeding 21 nights.
Calculation
N/A — classification is legal and operational, not a single formula.
Result
This is classic STR positioning: frequent turnovers, seasonal rates, and performance judged on RevPAR and cash flow rather than one annual rent figure.
Why it matters for STR investors
If you cannot define STR clearly for a market, you cannot interpret its data. Chalet’s analytics and calculators are built around STR economics — high frequency bookings, seasonal ADR, and occupancy-driven performance — not single-tenant lease math.
Key points
- Usually nightly–weekly stays; local law often uses a 30-day bright line
- Furnished, actively managed inventory — higher ops than long-term rentals
- Performance stack: ADR × occupancy (RevPAR), fees, and expenses drive outcomes
- Separate municipal STR rules from IRS rental classification
Related terms
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