“Work It Out: STR Ownership Might Not Offer Easy Money”

Marilyn Kennedy Melia

What could be better than getting a paycheck without the work?

is seductive message promoting various types of “passive income” has gained traction on social media platforms like TikTok. It’s helping fuel interest, especially among younger adults, in ventures like owning a “short-term rental,” {STR}, using platforms like Airbnb and Vrbo. In reality, most STR owners are “usually are over 35” and have the income to own a property that allows them to rent a room and bath or an entire home, notes Annie Sloan, CEO of e Host Co., which provides automation to sell STR guests extras, like fl owers.

Even before the popular passive income messaging, “the huge success of short-term rentals in 2021” pushed the supply of US listings 24.6 percent to 1.3 million in 2022, notes Mariah Kamei of AirDNA, a data and analytics provider on STRs.

But, especially in markets where the supply of STRs is exceeding demand, owners can’t simply post their listing and profi t. With “more competition for guests, it will become more important for hosts to pay attention to their guest reviews and adjust their operations if they want to maintain high levels of performance,” Kamei notes.

Moreover, says Sloan, many travelers now expect a STR to feel like a hotel stay, offering reliable Wi-Fi, toiletries and cleanliness. While it’s possible to hire a property management firm to handle bookings and cleaning, that cuts STR income. is year, AirDNA forecasts a nine percent increase in STRs listed, and boosting income is hardly passive. “Providing hospitality and great customer service can be a full-time job,” notes Kamei.

Before getting into the business by renovating your home to provide a room and bath with a separate entrance, or buying a vacation property, research income potential. “Study the occupancy rate [for STRs] in your area,” suggests Sloan. “If you’re buying a vacation home that you want to use too, remember that the days you want to use it might be the same times renters probably will, too.”