Short-Term Rental (STR)

A short-term rental (STR) is a furnished residential property rented to guests for fewer than 30 consecutive days. Commonly listed on platforms like Airbnb and Vrbo, STRs include entire homes, condos, apartments, and private rooms that give travelers an alternative to hotels while giving property owners a higher-yield, flexible income stream — one governed by a distinct set of permits, taxes, and zoning rules that do not apply to standard long-term leases.

Key Takeaways

• An STR is any furnished property rented for fewer than 30 consecutive days, though the exact threshold — 28 days, 14 days — varies by jurisdiction
• The sub-30-day classification triggers specific permit, tax, and zoning requirements separate from landlord-tenant law
• Most cities require an STR permit and collection of transient occupancy tax (TOT) to operate legally
• STR performance is measured by occupancy rate, ADR, and RevPAR — metrics that vary sharply across regulatory environments
• Zoning regulations and HOA restrictions can limit or prohibit STRs regardless of state or city law

What Defines a Short-Term Rental

The 30-day rule is the most common legal threshold, but it is not universal. New York City's Local Law 18 defines short-stay as fewer than 30 consecutive days, while some municipalities use 28 days (matching calendar months) or even 14 days as the cutoff. The critical point is that once a rental crosses that threshold, it shifts from the short-term regulatory framework into standard landlord-tenant law — which means different taxes, different eviction rules, and different insurance requirements.

Three elements define an STR across virtually every jurisdiction:

1. Duration — fewer than the local threshold (typically 30 days) per stay
2. Compensation — money, services, or anything of value exchanged for use of the space
3. Residential property — a home, condo, apartment, or room, as opposed to a commercial hotel

Some cities further distinguish by whether the owner is present (owner-occupied vs. non-owner-occupied), which determines which permit tier applies and how strictly the property is regulated.

Types of Short-Term Rentals

STRs come in several forms, each carrying different regulatory implications:

Type	Description	Typical Regulations
Entire home	Full property rented while owner is away	Often requires STR permit; may face night caps
Owner-occupied	Owner lives on-site during guest stays	Usually lighter restrictions; sometimes exempt from permits
Non-owner-occupied	Investment property with no owner present	Strictest regulations; may require conditional use permit
Private room	Single room in shared living space	Often treated as owner-occupied; lighter regulation

STR vs. Long-Term Rental: Key Differences

Factor	Short-Term Rental	Long-Term Rental
Lease length	Under 30 days per stay	6–12+ months
Furnishing	Fully furnished required	Usually unfurnished
Nightly rate	Higher — market-dependent	Lower monthly equivalent
Income consistency	Variable by season	Stable monthly rent
Management effort	High (turnover, cleaning, guest communication)	Low (monthly rent collection)
Tax obligations	TOT + income tax	Income tax only
Permits required	STR permit, business license	Standard landlord registration
Insurance	STR liability insurance	Landlord insurance
Regulatory risk	High — rules shift frequently	Low — landlord-tenant law is stable

The income advantage is real, but it comes with a higher operational and compliance burden. For investors, the comparison between STR and long-term rental revenue should incorporate local STR regulations as a primary input — not an afterthought. Our STR vs. long-term rental comparison sets median Airbnb revenue against median rent by bedroom count, and its calculator estimates the Airbnb side for your address.

How Regulation Reshapes STR Markets

STR classification is not neutral. Calling a rental "short-term" is what activates the regulatory apparatus — permits, taxes, night limits, zoning overlays — and the stringency of that apparatus varies enough to reshape an entire city's supply.

The most powerful variable in STR market selection is not ADR or occupancy — it's the regulatory environment that determines whether you can operate at all.

AirROI's basket data shows this concretely. In heavily regulated New York City, where Local Law 18 requires host registration and bars platforms from listing unregistered properties, active STR listings sit at roughly 11,468 — down from an estimated 26,775 before September 2023 enforcement, a decline of nearly 60%. The median minimum stay in New York is now 25.8 nights, pushed right to the 30-day legal threshold. Lightly regulated markets tell the opposite story: Gatlinburg, TN carries a 2.1-night median minimum and San Diego's ADR of $394.90 reflects a market where STRs can still operate freely as true short-stay properties.

This patchwork is spreading. The small-city ordinance wave shows that regulation is no longer confined to major metros — and the EU STR regulatory framework signals how far cross-border standardization may reach.

STR Revenue Potential by Market

Annual STR earnings vary sharply with market conditions and regulatory environment. AirROI's trailing-12-month median figures across active listings:

Market	Annual Revenue	Occupancy	ADR	Regulatory Regime
San Diego, CA	$53,472	53%	$394.90	Moderate
Gatlinburg, TN	$50,438	47%	$376.50	Light
Scottsdale, AZ	$49,153	49%	$421.10	Light
Nashville, TN	$44,039	47%	$353.60	Moderate
Miami, FL	$34,738	49%	$291.00	Moderate
New York, NY	$21,970	49%	$224.70	Heavy

The New York figure captures a market where the STR is functionally a medium-term rental — hosts can legally serve 30-day-plus stays, but true nightly STR operation is largely prohibited. The $21,970 median understates what comparable properties earn in light-regulatory markets operating as genuine short-stays.

Operating a Short-Term Rental Legally

Getting into the STR business requires working through several regulatory layers before the first guest books:

1. Research local regulations — check your city's STR regulations, zoning laws, and HOA rules before purchasing or listing
2. Obtain required permits — apply for your STR permit and business license; some markets have waitlists or caps
3. Set up tax collection — register to collect and remit transient occupancy tax; many platforms remit automatically, but verify
4. Secure proper insurance — get STR liability insurance — standard homeowner's policies typically exclude commercial short-stay activity
5. Analyze the market — use data tools to understand local occupancy rates, ADR, and competitive supply before committing capital

For a full compliance walkthrough, our STR regulations guide for hosts covers permit applications, tax setup, and how to monitor for regulatory changes in your market.