If you own a property and you’re thinking about renting it out, there’s a good chance you’ve already gone back and forth on this: do you list it on Airbnb, or do you find a long-term tenant?
Both options look appealing on paper. Short-term rentals promise higher income. Long-term rentals promise less hassle. But the real answer depends on a lot of factors that most people don’t sit down and think through before they start furnishing a guest bedroom or calling a property manager.
We asked Daryl Fairweather, Chief Economist at Redfin, to weigh in on how property owners should think through this decision in 2026, given where rates are, how regulations have shifted, and what the data is actually showing.
It’s really a question of what kind of landlord you want to be
Short-term rentals get pitched as passive income. They’re not, and haven’t been for a while. You’re running a small hospitality operation, managing bookings, coordinating cleaners, restocking supplies, handling guest issues at 11pm. Done well, it can absolutely generate more revenue than a traditional rental. But you’re trading predictability for that upside.
Fairweather put it plainly: long-term rentals offer steadier cash flow and a lot less day-to-day involvement, which matters especially right now when financing costs are high and you want your income to be reliable. Short-term rental revenue, on the other hand, is sensitive to seasonality, to how saturated your market is getting, and increasingly, to local regulation.
Neither is the wrong answer. But they’re genuinely different lifestyles, not just different income streams.
Your property itself will push you in one direction
Before you think about strategy, look at what you actually have.
Short-term rentals need to be decorated and furnished while long-term rentals just need to provide a good space and working systems.
Short-term rentals live or die on presentation and amenities. The property needs to be fully furnished and genuinely comfortable, not just functional. Smart locks, self check-in, a good coffee setup, fast wifi. In competitive markets, the baseline keeps rising. According to Mashvisor’s analysis of active STR listings over the past 12 months, properties with pools were nearly 8% more likely to hit high occupancy levels, and features like EV chargers and self check-in consistently correlated with stronger booking performance.
Long-term rentals are the opposite. Tenants bring their own stuff, so you’re not decorating, you’re making sure the bones of the property are solid. Good storage, durable finishes, reliable systems. A well-maintained, boring property in the right neighborhood will rent long-term just fine.
Where your property is located also matters more than most people account for. Short-term rentals need travel demand nearby, tourist destinations, urban cores, areas people actually want to visit. Long-term rentals need the things that make people want to stay: jobs, schools, transit, stability.
Want to see what’s actually driving occupancy in your target market?
Mashvisor’s Airbnb API breaks down performance by property features, neighborhood, and city, so you’re not guessing which amenities matter where you’re investing.
Watch the local market before you decide anything
This is where most people make the mistake. They pick a strategy based on what they’ve read works generally, without checking whether it actually works in their specific market.
Fairweather flagged a few signals that suggest short-term is the stronger play: tourism demand that’s real and sustained, nightly rates that are trending up, and short-term supply that hasn’t caught up with demand yet. Flip any of those and the math changes fast.
For long-term rentals, the positive signs are tighter rental inventory, rising rents, and strong local job growth pulling in new residents. The warning sign is when home prices are high relative to rents, that’s when it gets hard to make the numbers work if you’re just entering the market.
She also made a point about regulations that’s worth taking seriously. Cities like New York and Honolulu have cracked down hard enough on short-term rentals that for most owners, it’s effectively not worth attempting. More markets are moving in that direction. If you haven’t looked up what’s actually permitted in your city or neighborhood before running projections, that’s the first thing to do.
Before you run your numbers: Check Mashvisor’s Market Finder to compare cap rates and rental revenue by strategy across cities and neighborhoods. And use the Short-Term Rental Regulations tool to confirm what you’re actually allowed to do where you’re looking.
If you’re an investor or developer working at scale: Mashvisor’s Real Estate Data API gives you daily-updated STR and LTR performance data, occupancy rates, cap rates, revenue projections, neighborhood analytics, via clean endpoints you can plug directly into your own models. See the API docs →
The economic backdrop is tilting toward long-term right now
Rates are still high. That matters more for short-term rentals than people realize, because your fixed costs (mortgage, insurance, taxes) don’t flex with your income. A month of weak occupancy in a slow season can sting in a way it didn’t when rates were at 3%.
The affordability crunch is also keeping more people renting longer than they’d planned, which is genuinely good news for long-term landlords. Demand isn’t going anywhere.
Migration trends break differently depending on your market. Areas absorbing a lot of relocating workers, think parts of the Southeast, Mountain West, are strong long-term rental markets. Places that attract tourists and remote workers on shorter stays are better short-term bets, assuming the regulations cooperate.
Fairweather’s read on the current moment: most investors are prioritizing predictability over the chance at higher returns, because the downside of getting it wrong is more painful when money is expensive.
That’s probably the right call for most people. But if you’re in a high-demand vacation market with solid regulations and the numbers work, short-term is still very much on the table.
A quick gut-check before you decide
If you’re leaning short-term: does the market have real, consistent travel demand (not just “it’s a nice area”)? Have you actually looked up the regulations and what compliance costs? Are you ready to run it like a business, or willing to pay someone who will? Does the property have, or can it reasonably get, the features guests expect? And have you looked at actual occupancy data for comparable listings, not just the optimistic estimates on some calculator?
If you’re leaning long-term: does the rent-to-price ratio make sense at current financing costs? Is there genuine local demand driven by jobs and population growth, not just a quiet neighborhood? Do you know the landlord-tenant laws in your state, which have been changing? And do you have a realistic plan for what turnover will cost when a tenant eventually leaves?
Still not sure which pencils out? Mashvisor’s Rental Property Calculator lets you run both scenarios on any property, cash flow, cap rate, CoC return, occupancy, before you commit to anything. Try it free →
The call
There’s no universal right answer here, which is kind of the point. The investors who get this wrong usually do so because they picked a strategy first and then tried to fit their property and market into it, instead of the other way around.
Start with what you have, check what the local market supports, stress-test the numbers against today’s financing costs, and then pick the strategy that fits, not the one that sounds better at a dinner party.
Redfin insights provided by Daryl Fairweather, Chief Economist. STR amenity performance data from Mashvisor’s analysis of active listings over the past 12 months.
Where to go from here:
If you’re an investor or property owner, run your numbers on Mashvisor, you can compare STR and LTR returns, check local regulations, and find markets worth targeting, all in one place. Free to start.
If you’re a developer or data team working at scale, Mashvisor’s Real Estate Data API gives you daily-refreshed STR and LTR metrics, occupancy, cap rates, and neighborhood analytics via clean endpoints. View the docs →