You may hear the term short-term rental more often these days, especially in coastal communities, vacation destinations, and areas where tourism is part of the local economy.
But what exactly is a short-term rental?
A short-term rental, often called an STR, is generally a home, condominium, apartment, room, or other residential property that an owner rents to a guest for a short period.
In many communities in the Bay Area, cities consider a stay of less than 30 consecutive days a short-term rental. The exact definition can vary by city, so local rules always matter.
Airbnb and Vrbo are two of the best-known websites used to advertise these rentals, but a property does not have to be listed on one of those platforms to be considered a short-term rental. However, be sure to check your local ordinance before engaging in short-term rentals.
How Is a Short-Term Rental Different From a Regular Lease?
The biggest difference is the length of the stay.
With a traditional rental, a tenant may sign a lease for six months, one year, or longer. Owners typically rent a short-term rental for:
✓ A weekend
✓ Several nights
✓ One to two weeks
✓ Different short stays throughout the year
Because guests come and go more frequently, cities may regulate these properties differently from traditional rentals.
Hosted and Unhosted Rentals
You may also hear the terms hosted and unhosted short-term rentals.
A hosted rental usually means the owner or primary resident remains at the property while guests are staying there. Renting out a spare bedroom while continuing to live in the home is one example.
An unhosted rental usually means the guest has the property to themselves while the owner or primary resident is away.
Some cities have different rules for each type.
Why Do Homeowners Use Short-Term Rentals?
Homeowners may use short-term rentals for different reasons.
Some use the income to help with mortgage payments, property taxes, insurance, or maintenance.
Others may travel frequently and rent their home while they are away.
Short-term rentals can also give visitors another lodging option, especially for families who want additional space, bedrooms, or a kitchen.
The important thing to remember is this:
Owning a property does not automatically mean you can legally operate it as a short-term rental. Local zoning, permits, taxes, homeowners association rules, and other regulations may apply.
If you're weighing whether an STR makes sense for your own property, research your local zoning and permit options before you list anything.
In Part 2 of this series, I will look at another important question: why do short-term rentals sometimes become controversial in local communities?
Understanding both the benefits and the concerns can help homeowners and residents have a more informed conversation about the issue.
This article is for general educational purposes only and is not legal or tax advice. Short-term rental regulations vary by community and may change.
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