Short-Term Rental vs Long-Term Rental: What Investors Who Have Done Both Actually Say

Santiago Reyes bought his first investment property in Denver in 2019 and did what most new investors do: he put a long-term tenant in it. Steady rent, a predictable lease, minimal headaches. For three years the unit produced about $2,200 a month. Then the lease ended, the tenant gave notice, and a neighbor suggested he try Airbnb.

“I thought I was leaving a lot of money on the table,” Santiago told me. (Santiago is a composite investor drawn from documented host experiences in STR investor forums and community groups.) “Everyone kept saying STR was printing money.”

It wasn’t entirely wrong. The property started grossing about $3,400 a month on Airbnb. Then Santiago ran the net numbers at year-end: cleaning costs, platform fees, pricing software, higher insurance, and the November nights that just didn’t fill. Net income from STR: roughly $23,000. Net income the same property would have produced under a long-term lease: roughly $21,000.

He had made the switch for about $166 a month. “La diferencia fue muy pequeña,” he said. The difference was very small. The property went back to a long-term rental the following year.

That story doesn’t fit the STR-versus-LTR narrative most people tell. The gross numbers look transformational. The net numbers, in certain markets, look a lot more ordinary. And the investors who understand that distinction before they buy tend to make very different decisions from the ones who learn it afterward.

What the Data Actually Shows

Before the case studies, a grounding in real numbers. StaySTRA tracks median gross revenue across all U.S. markets. For a three-bedroom property, the comparison by market category looks like this:

STR figures: StaySTRA median annual gross revenue by market category. LTR estimates based on HUD Fair Market Rent 2026 data for 3-bedroom units in representative markets within each category. Gross comparison only; net figures vary significantly based on management structure and operating costs.

The gross picture looks decisive for beach and mountain markets. A property averaging $71,000 annually on Airbnb is producing 2.5 to 3.5 times what a comparable long-term lease generates. That is the number that attracts investors to the STR model in the first place.

But gross is not net. STR operating costs typically run 35-45% of gross revenue for a self-managed property and 50-60% for a professionally managed one, once you account for cleaning, platform commissions, dynamic pricing tools, consumables, and higher vacancy during shoulder season. That changes the math considerably, especially in urban markets where long-term rents are already strong. StaySTRA’s market-by-market income data makes these gross-to-net adjustments explicit across 55 U.S. markets. A companion analysis of eight specific markets found the net income gap in urban primary markets often narrows to just 9-13% once actual costs are modeled honestly.

That 9-13% is still a real premium. But it looks very different from a 3x gross comparison, and it feels very different when you are managing the property every weekend.

Investor Story 1: Santiago in Denver (Urban Market)

Santiago’s experience illustrates what happens to thoughtful investors in urban primary markets. Denver’s STR occupancy runs at 72.4%, one of the higher urban readings in StaySTRA data. The city stays active year-round, helped by business travel and conference demand. But Denver’s median STR ADR sits at $178 across the market, and properties produce a median of about $34,000 in annual gross revenue.

A comparable long-term lease in Denver’s median market ranges from $2,300 to $2,800 a month depending on neighborhood, which comes to $27,600 to $33,600 per year. The gross gap is real but not dramatic. After STR operating costs, the net gap often compresses to the point where the additional management burden is difficult to justify unless you genuinely enjoy the hospitality side of it.

Santiago does not. “Yo prefiero la tranquilidad,” he said. I prefer the peace of mind. He now holds three long-term rentals in Denver and reviews STR income data when he evaluates new markets. He is not anti-Airbnb. He just ran the numbers for his specific situation and made a deliberate choice.

What he says he wishes someone had told him earlier: “Everyone compares the gross STR income to the gross LTR income and shows you a big gap. Nobody shows you the net-to-net comparison. That is the number that actually matters.”

Investor Story 2: Kim and the Myrtle Beach Calculation

Kim’s situation was different. (Kim is also a composite, drawn from coastal STR host communities.) She bought a three-bedroom beach house near Myrtle Beach, South Carolina in 2021. Her original plan was a long-term lease to simplify management. The property rented quickly at $1,350 a month. She was content.

Then a realtor friend showed her what comparable Airbnb properties were making in peak season. Kim went home and modeled the numbers herself. She switched to short-term rental.

The first year the property grossed just over $38,000. After platform fees, cleaning costs, and a handyman on retainer, she netted about $26,000. The long-term lease would have produced roughly $14,000 net after vacancy and maintenance. The gap was nearly $12,000 per year. That gap was large enough to justify the work.

Kim self-manages and estimates it takes about eight hours per week during peak season. She keeps a spreadsheet she calls la cuenta de todo, the account of everything, tracking every expense and every vacancy night. “If I couldn’t run the numbers clearly, I would underestimate how much this actually costs,” she said. “But even with the full picture, the STR model wins clearly for this property.”

Her earlier experience as a long-term landlord gives her a genuine comparison point. “Most people who go straight to Airbnb have no reference for what passive income actually feels like,” she said. “The LTR doesn’t generate excitement. But it also doesn’t need you every weekend.”

StaySTRA data shows beach and coastal market medians near $71,000 gross annually across the full category, which includes premium destinations like the Outer Banks and Cape Cod. High-volume drive-to markets like Myrtle Beach typically run lower, with a market-wide median around $31,000 annually. A well-managed 3-bedroom property in a strong location, like Kim’s, can perform above that median. The LTR equivalent in Myrtle Beach runs around $1,300 to $1,500 per month. The math still favors STR clearly in that market, and it has stayed favorable for Kim over four years.

Investor Story 3: Marcus and the Portfolio Approach

Marcus holds four rental properties, two short-term rentals and two long-term rentals. The split is deliberate. (Composite, drawn from multi-property STR investor communities.)

“After running both models for a few years, I stopped asking which strategy is better,” Marcus told me. “I started asking which strategy is right for which asset.”

His STRs are in a mountain cabin market in western North Carolina, where StaySTRA mountain market medians run around $64,000 gross annually. His LTRs are in a secondary mid-sized city where the STR net premium over long-term rents is minimal. The cabins carry the income-heavy work in his portfolio. The city rentals provide stability and near-passive cash flow.

“The cabins are my peak season business. The city rentals are my foundation,” he said. He manages the STRs actively from April through October and uses a local property manager for the highest-turnover months. The LTRs require maybe two calls per year.

When Marcus evaluates a potential acquisition, he works through three questions in order. First: what does the STR gross income look like relative to the local LTR rate for this specific property and submarket? Second: is the regulatory environment in this market stable enough to build an income-reliant STR strategy on? Third: do I have the time, the systems, or the property management access to actually run a hospitality operation at this location?

If the answer to any of those is uncertain, he defaults to long-term rental and revisits the following year with better data. “The LTR is always there as the floor,” he said. “You can usually convert to STR later. You can’t always convert back.”

That last point deserves attention. In some markets, converting a long-term rental to an STR now requires a permit that may no longer be available when you want it. The optionality is not symmetric.

The Time Math Nobody Puts in the Spreadsheet

One pattern that shows up consistently among investors who have operated both models: the time gap is almost always larger than they expected before they experienced it.

A self-managed long-term rental typically requires two to four hours per month in active management time once the property is stabilized. Tenant screening, lease renewals, occasional maintenance coordination, annual inspections. It approaches passive for a well-maintained property with a reliable tenant.

A self-managed STR is a different category of work entirely. Industry estimates consistently place active management time at five to ten hours per week per property during peak season, covering guest communication, cleaning coordination, restocking, dynamic pricing adjustments, and review management. During shoulder season that compresses. During holiday peaks it often expands.

If you value your time at $40 an hour and spend an average of seven hours per week managing a single STR, that represents $14,560 in opportunity cost per year. That figure does not appear in most income comparison spreadsheets.

Investors who hire professional property managers for their STRs typically pay 15-25% of gross revenue in management fees. For a beach property at $71,000 gross, a 20% management fee is $14,200 annually. That is larger than the entire net income difference between STR and LTR in many urban markets, paid out as a management fee alone.

The Variable Most Investors Underestimate

Ask experienced STR investors what they wish they had understood more clearly before their first purchase, and the answer that comes up more often than any other is regulation.

Regulatory risk is genuinely asymmetric. A property in a stable, investor-friendly market can operate as a short-term rental for years without disruption. A property in a city that decides to cap new permits, require owner-occupancy, or restrict STRs to certain zones can see its entire income premium disappear in a single council vote.

The best states for STR investment in 2026 are largely those with preemption frameworks that limit local government authority to restrict short-term rentals. Properties in Florida, Tennessee, and other preemption states carry meaningfully lower regulatory risk than comparable properties in states where cities retain full authority to ban or cap STRs.

Marcus factors this into every acquisition decision. “If I am choosing between two properties with similar STR income projections and one is in a preemption state and one isn’t, I will take the preemption state,” he said. “The long-term rental model doesn’t carry that risk. You’re trading some upside for real stability.”

A projected $50,000 STR gross income in a market with a pending permit cap is worth substantially less than a projected $30,000 LTR income in a stable market. That risk adjustment is invisible until it is not.

Running the Numbers for Your Property

The most important shift in thinking, for investors who have done both, is moving from asking “is STR or LTR better?” to asking “which model is right for this specific asset, in this specific market, given how I actually want to spend my time?”

That question leads through a reliable sequence: market type first (leisure vs. urban primary), regulatory environment second, honest time accounting third, and then property-specific income data to produce an actual number rather than a category average.

You can run any U.S. property through the StaySTRA analyzer to see projected STR income, occupancy benchmarks, ADR estimates, and DSCR calculations for your specific address. Category medians give you context. Your property’s specific address gives you the number worth acting on. A waterfront property and an off-beach property are both “coastal,” but they don’t earn the same income and they don’t carry the same investment profile.

If you’re evaluating your first STR acquisition alongside this analysis, the complete guide to buying an Airbnb property walks through the full due diligence process. The income comparison is one piece of that. Understanding what you’re buying, in which regulatory context, with which management plan, is the rest of it.

Santiago knows what he would do differently. Kim is glad she ran her own numbers. Marcus has found a portfolio structure that works for his markets and his time. The common thread across all three is not which model they chose. It is that they chose deliberately, with real data, rather than defaulting to the gross comparison and calling it a plan.

We do our best to keep our content accurate and up to date, but things change and we are only human. Always verify details directly with local sources before making decisions.