A short-term rental allows you to get a faster return on investment (ROI) and a higher CoC than other types of real estate investments. As an entrepreneur and real estate investor, I always say that you should never settle for an Airbnb or any other kind of STR property for less than 15% CoC.

It’s almost impossible to get a similar number with long-term rentals, with the usual CoC rate being around 8%. 

Renting your property for short periods and weekends lets you invest for cash flow. This means you’ll be able to pay off your debt, maximize rental income and get a passive income at the same time.

Also, if you do a proper short-term rental investment analysis and buy a property in a booming market, your property’s value will increase yearly. The longer you keep your rental property, the more valuable it will be when you choose to sell. Interest rates can go up or down, but real estate does not lose value.

Airbnb automation is the process of streamlining the tasks that you do every day or repeatedly, so you can focus on the most important aspects of growing your business. Automation gives you comprehensive control over your properties, so you can become a remote host and manage your Airbnb rentals from anywhere.

Using an automation software enables you to bring automation to all major areas of Airbnb rental operation (cleaning coordination, guest communication, digital self-check-in, review requests, pricing, upsells, and finances)

With an automation solution, you do not need to spend more than 4 hours a week to manage multiple properties.

The bottom line is that a busy high-income earner with a fairly high W2 can pass material participation tests (100 hours and more than anybody else), claim tax losses from his or her STR business and save 6 figures in taxes without working full-time in real estate.

Physicians, dentists and high-income earners experience a significant amount of financial stress throughout their careers. Student loans and lifestyle creep compound the stress. One way to relieve this stress is to increase cashflow outside of Medicine or your profession. Self-managing your own short-term rental properties is a great way to increase cashflow and provide financial stability. Depending on your market you can achieve cashflow from 60k to over 160k with just three properties. That is life changing. Not to leave your full-time job but to simply diversify your income.

If you’re a high-income earner, then it’s safe to say that taxes are your biggest expense. One of the main reasons most doctors and other high income earners invest in STRs is for the tax advantages.

By investing in short-term rental properties, you can significantly decrease your taxable W-2 income. It’s possible to take the losses from a short-term rental business (through depreciation and expenses), and materially participate in the activity, then use those losses to offset non-passive income (like your W-2 day job) without qualifying as a real estate professional. Essentially, allowing you to lower your taxable income by hundreds of thousands. That could be a huge tax shelter.

The bottom line is that a busy high-income earner with a fairly high W2 can pass material participation tests (100 hours and more than anybody else), claim tax losses from his or her STR business and save 6 figures in taxes without working full-time in real estate.

However, investing in STR can easily go sideways if you don’t do the due diligence to understand the market, research the best location and property, run the numbers, and invest time to manage your short-term rental.

That’s why, along with leveraging one of our elite real estate accountant partners, you should look into hiring a STR investment consultancy firm like us to make the best possible investment property decision.