Short-Term Rental

Short-term rentals are furnished homes booked for a few nights or weeks at a time, typically through online platforms rather than under a year-long lease. Some BRRRR investors rent the finished property this way for higher gross income, which changes both the operating costs and how a lender will count the rent at the refinance.

Nightly rentals often bring in more gross revenue than a lease, but they also carry furnishing, cleaning, supplies, utilities and platform fees, and occupancy moves with the seasons. The comparison that matters is net income after those costs against the long-term rent.

Local rules are the first check. Plenty of cities restrict nightly rentals, some outlaw them in certain zones, and many add permit requirements or a separate lodging tax. Lenders also differ on how they treat this income: some accept booking history or market data, others count only a long-term market rent. Knowing which one applies before the rehab keeps the refinance on track.

Further reading: Short-Term Rental on Wikipedia.