Lodgify
Industry

What is a Short-Term Rental (STR)?

Updated 2026-05-27

A Short-Term Rental (STR) is the practice of renting out a furnished residential property or portion of a property for a limited duration. Unlike traditional long-term leases, which typically last a year or more, STRs cater to travelers, tourists, or individuals needing temporary accommodation for periods ranging from one night to several weeks, commonly defined locally as fewer than 30 days.

These properties, which include apartments, houses, and condos, are often booked through online travel agencies (OTAs) and serve as an alternative to hotels, offering more space, privacy, and amenities like kitchens.

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How it works

The STR model involves a property owner or manager (the host) making a furnished property available to a guest for a fee. Bookings, payments, and communication are typically managed through an online platform or a direct booking website.

Property management platforms, such as Lodgify, sometimes offer tools to help hosts streamline operations like professional cleaning, restocking supplies, and performing any necessary maintenance between guest stays. The host also manages marketing, pricing, and guest relations to ensure a consistent flow of bookings and positive reviews.

Why it matters

The STR model can offer higher nightly revenue and greater flexibility for personal use of the property compared to long-term leasing. For property managers, it represents a significant market segment but also demands more intensive operational management.

This includes handling frequent guest turnover, dynamic pricing, multi-channel marketing, and navigating a complex and evolving landscape of local regulations, taxes, and licensing requirements that are often stricter than those for traditional rentals.

Examples

  • A two-bedroom apartment in downtown London rented for a week to tourists.
  • A beachfront house in Malibu rented for the month of July to a family on vacation.
  • A studio condo near a convention center rented for three nights to a business traveler.
  • A cabin in the mountains rented for a long weekend to a couple seeking a getaway.
  • A spare room within an owner-occupied home rented out on a nightly basis.

Frequently asked questions

What is the difference between a short-term rental and a vacation rental?+
The terms are often used interchangeably, but 'short-term rental' is a broader, more formal term that includes stays for business, relocation, or other non-leisure purposes. 'Vacation rental' specifically implies a property used for tourism. This distinction can be important for legal and zoning purposes, as some regulations apply differently based on the guest's reason for staying. However, in common industry parlance, the terms are largely synonymous.
What is the maximum length of stay for a short-term rental?+
The maximum duration varies significantly by jurisdiction. Many cities and states define a short-term rental as any stay for fewer than 28, 30, or 31 consecutive days. Any rental period exceeding this local threshold may be legally classified as a long-term tenancy, subjecting the property owner to different laws regarding tenant rights, eviction processes, and tax obligations. Managers must always verify the specific definition in their local ordinances.
Are short-term rentals more profitable than long-term rentals?+
STRs can generate higher gross revenue due to premium nightly rates, but they also incur greater operational costs, including frequent cleaning, higher utility bills, OTA commissions, and supplies. Profitability depends on factors like location, seasonality, occupancy rate, and management efficiency. A stable, lower-maintenance long-term lease can sometimes be more profitable after all expenses and time are accounted for. A detailed financial analysis is essential to make an accurate comparison.
What kind of regulations apply to short-term rentals?+
STR regulations are highly localized and can include requirements for business licenses or permits, limits on the number of rental days per year, and the collection of transient occupancy taxes (hotel taxes). Many jurisdictions also enforce specific safety standards, such as requiring smoke detectors and fire extinguishers. Some areas, particularly in residential zones, may have outright bans or restrictions on non-owner-occupied rentals. Hosts must research and comply with all local, state, and national laws.
Keep reading

Related terms

Marketing

Online Travel Agency (OTA)

An Online Travel Agency (OTA) is a website or app that sells travel-related products like flights, hotels, and vacation rentals to consumers.

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Marketing

Direct Booking

A reservation made directly with a property manager or host, bypassing third-party online travel agencies (OTAs) and their commissions.

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Reporting

Occupancy Rate

Occupancy Rate is the percentage of booked nights out of the total available nights for a property over a specific period.

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Industry

Superhost

A Superhost is a designation awarded by Airbnb to experienced hosts who consistently provide outstanding hospitality and meet specific performance criteria.

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