Why more vacation rental hosts are becoming landlords
Why more vacation rental hosts are becoming landlords
For many areas across the U.S., vacation or short-term rentals aren’t what they used to be. Platforms that used to promise easy bookings and fast profits now come with uncertain cash flow, heavier regulation, and rising costs. As a result, many hosts are pulling their listings from sites like Airbnb, Vrbo, and Booking.com and transforming their properties into mid- and long-term rentals.
What else is influencing this shift? On top of the red tape and restrictive regulations, many hosts are burning out from constant turnovers, late-night guest messages, and the pressure to keep occupancy rates above a certain threshold. By contrast, mid- and long-term rentals offer less mayhem and strike a healthier balance between income and upkeep.
On top of it all, ever-tightening local laws are stunting short-term profitability with new fees, limits, and restrictions. For a growing number of hosts, survival could mean pivoting to a new business model before it’s too late, TurboTenant says.
Regulatory challenges
Local governments, small and large, have ramped up short-term rental regulations in recent years. Restrictive permit caps, licensing limits, and zoning restrictions are becoming more frequent, forcing many hosts to either adapt or step away from the short-term game outright.
That’s partially because some cities dole out steep fines while others enforce rules sporadically. The result leaves many unsure whether they’ll get slapped with a hefty fee or go about their business unnoticed. Now, we’ll look at how towns—both large and small—are regulating short-term rentals.
Small Town, USA
Short-term rentals can change the vibe of a small town in a hurry. Think more traffic, fewer homes for locals, soaring rent prices, and a revolving door of unpredictable neighbors. So, many tight-knit communities have begun pushing back on vacation rentals that disrupt the delicate ecosystems they aim to preserve.
In Alamosa, Colorado, recent regulations cap short-term rentals at 5% of homes per zone, limiting the city to just 43 active listings total. New hosts face a $750 application fee, a $300 annual renewal, and a backlogged waitlist. Many who once made money comfortably are now rethinking the hassle as new restrictions and rising expenses chip away at profits that once seemed generous.
Tybee Island, Georgia, recently cracked down even harder than Alamosa, banning new short-term rentals under 30 days in residential areas covering about 85% of the island. With most of the small community now off-limits to vacation rentals, many real estate investors have shifted to mid- or long-term tenants to keep their homes occupied and the lights on.
Coeur d’Alene, Idaho, has even introduced a “snitch line” for residents to report unpermitted short-term rentals, with the phone number displayed prominently on utility bills. The hotline has created growing tension between hosts and neighbors, leading many to question whether short-term rentals are worth the risk.
New York City
Big cities are feeling the heat, too. One of the toughest short-term rental crackdowns recently occurred in New York City via Local Law 18. Under these new regulations, hosts must register with the Mayor’s Office of Special Enforcement, be physically present during guest stays, and limit occupancy to two guests. Renting out an entire home for fewer than 30 days is illegal.
After the law took effect, many properties were no longer eligible for short-term rentals, as only buildings approved by the city qualified for registration. The local government immediately disqualified rentals in public housing, rent-stabilized units, and restricted buildings, making thousands of listings illegal.
Since enforcement began, Airbnb listings in New York City have dropped by a staggering 80%. With tighter rules and steep penalties, it’s no mystery why so many short-term hosts have transitioned to mid- or long-term landlords in the Big Apple.
San Francisco
San Francisco has taken a similarly tough stance to New York City on short-term rentals. Per citywide law, hosts must live in their units at least 275 nights a year and can only rent them unhosted for up to 90 nights annually. Violations can lead to steep daily fines of $484.
Running a short-term rental also means jumping through a couple of pesky legal hoops. First, hosts must register as a business and get a Short-Term Residential Rental Certificate, which costs $250 for two years. Next, they also need $500,000 in liability insurance, typically costing between $600 and $2,000 annually, depending on the property.
These restrictions, requirements, and mounting fees are impossible to ignore. Not to mention, with platforms like Airbnb and Vrbo taking between 3% and 15% off the top of each booking, many hosts feel that the diminishing payoffs simply aren’t worth the effort anymore.
Denver
Like San Francisco, Denver recently made short-term rentals harder to sustain. In the Mile High City, rentals must be owner-occupied and licensed and come with a $50 application fee, $100 renewal fee, and 10.75% lodger’s tax. While the short-term rentals here might still be feasible, they don’t quite have the same income-earning potential as they did 10 years ago.
And it bears repeating: Non-owner-occupied short-term rentals are completely illegal in Denver. Hosts must live on the property they’re renting, obtain a license, display the license number in all listings, and follow the city’s safety and zoning regulations. Violations can result in fines of up to $999, enough to erase profits and jeopardize future bookings.
While Denver’s short-term rental scene isn’t going extinct anytime soon, making a living through turn-and-burn rentals is tougher now than in the past.
Economic uncertainty
Regulations aren’t the only thing giving hosts pause about short-term rentals. In cities big and small, inflation has pushed cleaning rates up, utility bills higher, and imported goods prices through the roof. In 2024 alone, cleaning and maintenance costs rose 5.9%, mortgage rates hovered around 6.5%, and insurance premiums soared to new heights.
Booking patterns have also shifted. Short-term rentals used to be an easy money grab, but much like food delivery apps or rideshare driving, many markets have become oversaturated. Many hosts simply aren’t filling their calendars like they used to, and for those relying on that income, the slowdown feels like an alarm to reconsider their business strategy.
Further, travel demand has cooled off, especially from international visitors. In early 2025, Canadian bookings on Airbnb dropped by over 12%, and cross-border trips fell by 23%, partly due to new tariffs and a stronger U.S. dollar. With fewer travelers and higher costs, hosts in tourist-heavy areas must lower their nightly rates and slash their expenses.
Ditching the grind: Why vacation rental hosts are becoming mid- and long-term landlords
In addition to prohibitive regulations and economic uncertainty, short-term rentals can feel like a relentless grind. Hosts deal with last-minute cancellations, 2 a.m. lockouts, and off-season income lulls. While short-term may offer higher potential returns, many find that long-term tenants bring peace of mind, fewer surprises, and more economic stability.
Plus, accounting and bookkeeping for short-term rentals require more time and effort on the part of hosts. They’ll need to account for every expense, including cleaning and supply restocking costs. Further, because of the shorter rental periods, hosts will spend more time on hands-on tasks like confirming bookings, coordinating with cleaning crews, and staying in constant communication with guests.
The case for mid-term rentals
Transitioning from short- to mid-term rentals can be fluid, especially if the unit is furnished. Mid-term rentals typically span one to six months and won’t require hosts to overhaul the space or remove furniture. And guests—think travel nurses, contract professionals, relocating families, and remote workers—are far more likely to treat the space like a home, not a hotel.
In exchange for this shift, hosts get less turnover, reduced cleaning needs, and fewer guest issues. These mid-term leases offer more flexibility than year-long commitments and far more stability than nightly stays. Additionally, mid-term landlords have more say in who occupies their property because they can run thorough background checks before handing the keys over.
“What we love about the medium-term rental model is that it feels like the Goldilocks of real estate investments,” says Erin and James Real Estate, “On the spectrum of work required and rental returns, it’s just right.”
The case for long-term rentals
For hosts looking to unplug from the hospitality grind, long-term rentals offer more than just relief from short-term chaos; they simplify the day-to-day beyond mid-term stays, too. Year-long leases reduce turnover, limit the need for constant communication, and support a set-it-and-forget-it business approach. And like mid-terms, you can screen tenants before they ever walk in the door.
Financially speaking, short-term rentals can bring in more per night, whereas long-term tenants offer consistent income that’s easier to forecast and plan around. Plus, as noted earlier, short-term rentals require more time and energy for accounting and bookkeeping tasks. Hosts must track frequent transactions, navigate shifting regulations, and manage paperwork across multiple platforms, increasing the risk of IRS scrutiny, filing errors, and missed deductions.
Shifting to long-term landlording can feel like a breath of fresh air for short-term hosts exhausted by the constant turn and burn. For those ready to simplify, the long-term model delivers on all fronts: reliable income, less admin work, and a break from the white-knuckle stress of managing constant guest turnover.
Ditching short-term rentals for long-term success
Short-term rentals aren’t dead, but the model is shifting quickly. From major metropolises to quiet mountain towns, jurisdictions across the country are rolling out new restrictions that limit what hosts can do and how much income they can generate. While short-term rentals still make sense in some areas, all it takes is one new ordinance to turn a profitable listing into a logistical disaster.
If the red tape, mounting financial challenges, and constant cleanings are wearing you down, consider flipping the script and transforming your property into a mid- or long-term rental. Now might just be the perfect time to pivot.
Property management software facilitates the shift
For anyone considering a change from short-term to long-term renting, the tools you use will need to change, too. While sites like Airbnb and Vrbo handle constant bookings well, they can’t run detailed tenant screenings, manage leases, or streamline your accounting.
Property management software can help.
These tools enable short-term hosts to market their rental units across dozens of listing sites, send digital rental applications, screen tenants, and collect rent from their smartphones or laptops.
They’re indispensable tools for hosts making the transition to landlords.
This story was produced by TurboTenant and reviewed and distributed by Stacker.
