Short-Term vs. Long-Term Rentals: Which Is the Better Investment in 2025?

So, you’ve got a property, or you’re thinking about getting one, and you’re stuck between renting it out short-term or long-term. It’s like deciding between a quick fling or a steady relationship. Both come with perks. Both come with problems. But in 2025’s rental market, which one’s actually going to make your wallet smile?

Let’s unpack this (pun intended).

First, What’s the Difference?

If you’re new to the rental game, here’s the cheat sheet:

Short-term rentals are usually furnished and rented out for days or weeks at a time. Think Airbnb or vacation homes.

Long-term rentals are leased for months or years. These are your classic apartments or single-family homes with tenants who stay put.

The Money Talk: Which One Pays Better?

Short-Term Rentals Can Bring In the Bucks, Fast

Short-term rentals often charge more per night than long-term rentals. According to AirDNA, the average U.S. short-term rental earned about $2,920/month in 2024, compared to $1,900/month for a long-term rental in the same market.

Sounds like a no-brainer, right?

But wait. With short-term rentals, you have to keep that calendar full. If you only book 10 nights out of 30, that “higher income” shrinks faster than a cheap bath towel.

You also spend more on cleaning, furnishing, guest communication, and supplies.

Long-Term Rentals: Slow and Steady Wins the Race?

Long-term rentals may not feel flashy, but they come with consistent monthly income, fewer gaps, and less maintenance chaos. In 2025, with rental vacancy rates holding steady around 6%, this model is still a solid, stable choice for investors who like things simple.

Plus, you’re not constantly chasing new tenants. Less turnover = less stress.

Property Managers: Your Behind-the-Scenes MVPs

Whether you’re team short or team long, here’s one truth: property managers can save your sanity.

For short-term rentals, they handle guest bookings, cleanings, check-ins, and the random 2 a.m. “Where’s the Wi-Fi password?” texts. You get to sit back while they turn chaos into cash.

For long-term properties, they’re the ones dealing with lease agreements, rent collection, and that one tenant who insists their leaky faucet is a national emergency.

Think of them as your rental pit crew, keeping everything running so you can focus on the finish line: ROI.

Flexibility vs. Stability

Short-term rentals give you flexibility. Want to block off two weeks in July to stay at your own place? Do it. Want to adjust prices based on demand? Go wild.

But if flexibility makes you queasy, long-term wins. Set the lease, collect rent, rinse, repeat.

In 2025, more investors are experimenting with “mid-term rentals”, leases that last 1 to 6 months, especially in areas with lots of traveling nurses, remote workers, and snowbirds. It’s like the mullet of rental strategies: business in the front, party in the back.

Location: The Deciding Factor

Spoiler alert: location matters. A beachfront condo in Miami? Perfect for short-term. A cozy 2-bed in the suburbs? Long-term all the way.

Cities with high tourism and event traffic (hello, Austin and Nashville) still favor short-term rentals, especially around festival seasons. But keep an eye on local regulations because many cities are tightening rules around Airbnb-style listings.

Always check if permits are needed before you turn your place into the next Insta-famous getaway.

Risk vs. Reward

Short-term = higher earning potential, but also higher risk. Bookings can drop. Platforms change algorithms. Local laws shift. You might go from superhost to super-stressed.

Long-term = lower risk, but possibly lower returns. Your income is more predictable, and so is your property wear and tear.

Taxes, Fees, and Other Fun Surprises

Don’t forget Uncle Sam. Short-term income is typically taxed as business income, while long-term is taxed as passive income, which may come with fewer headaches and better deductions.

Also, short-term rentals often mean higher insurance premiums, higher utility bills, and more ongoing costs. Those nightly rates? They come at a price.

So… Which Should You Choose?

Here’s the real talk. It depends on:

• Your property’s location
  
• Your risk tolerance
  
• How hands-on you want to be
  
• Local laws and restrictions
  
• Your long-term investment goals
  

If you want flexibility, faster returns, and don’t mind the hustle (or hiring a property manager to hustle for you), short-term could be your jam.

If you’re all about stability, steady cash flow, and less guest drama, long-term might be your better bet.

And hey, some investors are blending the two. Renting long-term during off-season, short-term during tourist peaks. The best of both worlds? Maybe.

Final Word: Don’t DIY Everything

Managing rentals isn’t just about putting up a listing and waiting for rent checks to roll in. It’s about pricing, screening, compliance, and oh-so-much maintenance.

That’s where a solid property management company earns its weight in gold stars and five-star reviews. They know the rules. They know the market. They know how to keep tenants (and you) happy. 

Whether you’re renting by the night or the year, teaming up with a property manager could be your smartest move in 2025. Find out more info about property managers and their services on this website.

TL;DR (Too Long, Didn’t Rent)