How to Invest in Short-Term Rentals in 2025: A Complete Step-by-Step Guide

If you’re diving into short-term rental (STR) investing in 2025, this guide is exactly what you need to get started. It’s no fluff, just practical, action-driven steps to help you turn your property into a successful STR business. This article is designed to complement the daily deals you already receive, taking you from market research to your first booking. Ready to roll? Here’s how to do it:

Step 1: Finding Your STR Market

Where should you invest? That’s the million-dollar question. This part is crucial, and it’s something that only you can decide. Think about what feels comfortable—do you want to invest a few hours away, or are you open to flying across the country? Beach towns or mountain retreats—what speaks to you?

Once you’ve got your preferences dialed in, start narrowing down markets with solid demand. Look for areas that attract tourists, business travelers, or event-goers—these spots are prime for STR investments. Factors to consider include seasonality, local regulations, and property price trends. I personally love markets near growing cities; it’s a good indicator of future demand.

Step 2: Finding STR-Friendly Realtors

I can’t stress this enough: finding the right realtor is absolutely critical. A realtor who knows the ins and outs of STR investments will make all the difference. They’ll help you navigate local regulations and zero in on neighborhoods that are STR goldmines.

Start by tapping into forums like BiggerPockets to find realtors who are STR-savvy. Do your homework: read reviews, ask for referrals, and interview potential agents. You want someone who understands your goals and knowledgeable about how STRs work. Your realtor is your business partner on this journey—make sure they’re the right fit.

Step 3: Determining Your Budget

Money talk. Before you start making offers, you need to know how much you’re willing to invest. Start by factoring in the down payment, closing costs, renovation and furnishing expenses, as well as ongoing expenses like property taxes, insurance, HOA fees, maintenance, and property management fees (if not self-managing).

If you’re buying a turnkey property (aka one that’s ready to go), you can allocate more for the down payment since there won’t be much renovation or furnishing needed. However, if you're eyeing a fixer-upper, be prepared to set aside extra cash for the renovation and furnishing process. Getting your place “guest-ready” is essential for a smooth launch.

Step 4: Finding STR Property

Here’s where the fun begins: property hunting! Work with your realtor to find homes that meet your criteria. Look for properties that tick the right boxes for short-term rentals—think location (close to attractions), ample sleeping space, and those extra amenities that will make guests choose your property over others.

Do some recon on Airbnb and VRBO to see what’s working in your market. Check out the number of bedrooms, the key amenities, and the proximity to popular spots. Then, jump on Zillow or Redfin to keep tabs on similar properties.

Once you’ve got a property in mind, use revenue estimator tools like PriceLabs, AirDNA, or Mashvisor for revenue estimates—but don’t take them at face value! These tools can be helpful, but they estimate revenue based on algorithms—not human input.

To get a more accurate picture, check similar properties on Airbnb and VRBO. Look at their booking calendars and daily rates to estimate their ADR, occupancy rates and revenue.

As a BnB Flow subscriber, we save you time by doing this heavy lifting for you. We track hundreds of STR markets and find the top deals, so you don’t have to.

Step 5: Putting an Offer and Closing

Found the perfect property? Great! Time to take action. Schedule an in-person or virtual walkthrough with your agent to thoroughly check out the property. If it meets your expectations and investment goals, it’s time to put in an offer.

Negotiation is key. If you’re in a buyer’s market, use that to your advantage! Consider negotiating for seller concessions—things like lowering your interest rate or securing credits for closing costs or home repairs. Once your offer is accepted, don’t skip the inspections. You want to ensure there are no hidden surprises.

Lastly, check that the property complies with all local zoning and permit requirements for STR operations. This is vital for avoiding headaches down the road!

Step 6: Get the Property into Airbnb-Ready Condition

Alright, it’s time to transform that property! Focus on creating a space that will wow your guests. Think standout design elements—the kind of space that makes people go, "Wow, I need to stay here!"

Invest in quality furniture, appliances, and decor that will justify premium rates. If design isn’t your thing, hire an interior designer. They’ll bring that “wow factor” that could set your listing apart.

To make your property even more irresistible, consider adding sought-after amenities like a hot tub, fire pit, arcade games, foosball table, or pool table—features that guests love and will rave about in their reviews.

As a premium member, you can access The Ultimate 5-Star Airbnb Checklist to ensure you don’t miss a single detail when preparing your property.

Once you’re happy with the design, hire a pro photographer to capture the space in the best light possible. Great photos = more clicks, and more clicks = more bookings. Your listing's success depends on those pictures!

Step 7: Setup Your Listing on Airbnb and VRBO

Your property is ready—now it’s time to create your listings! When you write your description, be clear and engaging. Highlight key features, unique selling points (location, amenities, standout design), and anything that makes your place one-of-a-kind. High-quality photos are a must!

Don’t forget to include a thoughtful guest book in your property. It can guide guests through the home, highlight local attractions, and add a personal touch to their stay.

For pricing, I highly recommend using dynamic pricing. Options like PriceLabs, Beyond, and Wheelhouse automatically adjust your rates based on demand, seasonality, and local trends, helping you stay competitive and maximize revenue.

Make sure to include essential details like house rules, check-in/check-out instructions, and any other key info that will help guests feel comfortable. Don’t forget to optimize your listing with keywords to boost visibility.

Step 8: Property Management System

If you want to run your STR business smoothly, property management system is essential. These tools automate guest communication, sync calendars, track bookings, and even handle payments. Plus, many let you build your own direct booking platform.

With automated AI responses, guest communication becomes seamless, and review requests help you build a solid reputation. The right software saves you time, reduces errors, and makes everything run more efficiently.

Popular options include Guesty, Hostaway, Lodgify, Hospitable, and OwnerRez. Choose one that fits your business needs and budget.

Step 9: Finding a Team on the Ground

Your STR business can’t run without a reliable team on the ground. Cleaners, handymen, landscapers—you need it all! Your cleaners are your eyes and ears, ensuring your property stays in top shape. Interview multiple cleaners, check reviews, and ask for references.

Establish clear communication channels to stay on top of schedules and updates. The smoother your operations, the better your guest experience. And remember, a great team is the backbone of a great STR.

Step 10: Go Live and Start Receiving Bookings

You’ve done it! Your property is live on Airbnb and VRBO, and the bookings are rolling in. Stay on top of your calendar and ensure everything runs smoothly. Respond quickly to guest inquiries, stay on top of reviews, and adjust your pricing strategy when needed to keep that revenue flowing.

The key to success? Consistency. Keep providing excellent customer service, tweak things as needed, and watch your property thrive. The better the guest experience, the more bookings you’ll get.

Final Thoughts

Congratulations! You’ve just launched your first STR and are on your way to building a profitable business. The journey may have its ups and downs, but with the right strategy, team, and preparation, you’re poised for success. Always be open to tweaking your approach—whether it’s adjusting pricing or optimizing your listings, there’s always room to improve.

Disclaimer

This newsletter is intended for informational purposes only and should not be construed as financial advice. We strongly recommend conducting your own research and due diligence before making any investment decisions. Property information is based on publicly available data and is subject to change. We cannot guarantee the accuracy or completeness of the data presented. Additionally, some properties may be subject to local regulations or HOA rules that restrict short-term rentals. Additionally, we may receive compensation from third-party providers for featured products or services.