How to Make Money with Short-Term Rentals in 2025

As we move further into 2025, the short-term rental market continues to evolve, presenting new opportunities for property owners and hosts. Many travelers have realized the benefits of renting a home or entire space for their trips which has led to continued growth in demand for short-term rentals. In recent years, there has been substantial expansion in the number of short-term rental listings which has had a negative impact on earnings for most hosts (excluding luxury and unique properties). It looks like things are starting to shift in 2025, and we will see fewer new listings and sustained demand, marking the first material shift since the pandemic.

For more information on the changing market dynamics, check out the 2025 Rental Outlook Report by AirDNA.

With our businesses and properties, the biggest challenge is – and will likely continue to be – labor. If you haven’t seen increases in how much you’re paying for cleaning or maintenance, you’re extremely lucky. Not to mention the cost of management (if you use those services), utilities and other supplies has increased with inflation in recent years. For the bulk of vacation rental hosts, this means compressed margins and increased challenges getting expected returns.

From our perspective, short-term renting has always been about lowering the cost of ownership – especially if you factor in the mortgage and insurance costs. We wrote an article about how we got started and what we learned along the way that talks about this more.

We have found that there is very high turnover in the industry for individuals who buy vacation rental properties and think it will be quick and easy passive income (especially with interest rates and home prices where they are today). However, if you set realistic expectations and build a true model, just like any other investment, we think you can minimize your cost of ownership and eventually generate earnings.

Here’s some of our suggestions on what you can do to make money with short-term rentals in 2025:

1. Embrace Technology

In 2025, technology will play an even bigger role in successful short-term rental management. The labor pool in most vacation destinations is tight, and if you can find help, it’s expensive and potentially unreliable. This means the less you need to rely on local labor, the better. One of the best ways to do this is through technology:

• Smart Home Devices: Equip your property with smart locks, thermostats, water/well control and switches to improve guest experiences, reduce risk, and control costs. Take care not to handcuff your guests, as the last thing they want is to not be able to use the property they rented. But with thoughtful design, you can save money, reduce or eliminate risk, and maintain control. This is one of the main reasons why we built Rental Home Automator, to give hosts advice on what devices to use, how to set them up, and a software solution to control them automatically.
• Property Management Software: Utilize software solutions to help automate your operations at your short-term rental. By using software like Breezeway, you can automatically schedule your cleans or other maintenance needs at the property based on your rental calendar. This reduces miscommunication with your local team and helps you ensure things are not forgotten between guests.
• Dynamic Pricing Tools: Implement pricing strategies that adjust in real time based on demand, local events, and seasonality. When you do this, make sure you put in some guardrails (like minimum nightly rates or manual adjustments for high-demand times of year) because you want to be able to control price based on your specific property’s performance and demand. Tools like Wheelhouse or PriceLabs will give you all the control you need while still bringing in the market dynamics to your pricing.
• Channel management: Many of the companies above have started providing full Property Management System services, but you don’t necessarily need that to be successful with your short-term rental. In fact, even multi-channel listing isn’t necessary to maximize your rental income. We’d recommend choosing a platform that meets your needs & the demographic you are targeting and stick with it. But if you are going to list on multiple channels, try a channel management focused system like Rentals United.

2. Make Your Listing Stand Out

As a short-term rental host, you need to figure out how to make your property stand out from the rest of the listings. Remember, a potential guest will likely be searching online with different platforms to find a place to stay, and your property needs to stand out when compared to the others. One obvious way is with the location, but that really only comes into the equation before you buy the property. Another major way properties differentiate is based on price, but if that’s all you’re doing then it’s just a race to the bottom.

Alternatively, we recommend you start thinking about the big features of your property and what it offers that may be different from other properties in your market. Is it the number of bedrooms, number of occupants, or overall size of the home? Is it the view or how the home is situated on the property? What about the proximity to activities in the area or direct access to hiking or swimming?

Unless you’re planning a major remodeling project, there isn’t a lot you can do about the number of bedrooms or bathrooms in your home. But there are things you can do to make your home stand out which don’t require tearing down walls or getting building permits.

• Focus on location photos: Whether your home is nestled in the mountains, on a lake or ocean, in the woods or in downtown, your listing’s main photo needs to focus on the best features to catch a guest’s eye. Pick the areal that depicts the view and privacy, or the view from inside showing the landscape or cityscape. Follow that photo with a few more highlighting the most important feature or features, then move on to all of the interior amenities.
• In-demand amenities: Depending on your market, things like a hot tub or sauna can be very big drivers for rentals. In some areas, making your short-term rental pet-friendly can have a substantial positive impact on inquiries and bookings as well.
• Create spaces: Since the pandemic, we see a lot more people doing work wherever they are – even if they are on vacation. Getting a desk and creating a small office or working space is an easy addition to your property. In addition, think about creating spaces outside your four walls, including adding things like fire tables or a fire pit so guests can enjoy your deck, yard, or other aspects of your property.
• High-end upgrades: Consider replacing some things in your home with high-end upgrades. Consider commercial-grade appliances, top of the line TVs, or premium couches. Little upgrades to faucets, toilets, light switches or doors provide high-end upgrades guests notice. Investing some money tastefully in these items can make a normal home feel a lot more like a high-end vacation getaway.
• Adding extras: Consider providing guests with what they need to enjoy the unique aspects of your property. For example, at our lake house, we provide our guests with free use of kayaks, canoes, and a paddleboat. This way it is very easy for the guests to enjoy the same things you do when you go to your property.
• Themed rentals: Create a distinctive environment by designing your rental around a theme. Whether it’s a cozy cabin vibe, a bohemian oasis, or a minimalist urban retreat, unique aesthetics can drive more bookings.

3. Optimize Your Online Presence

The majority of your bookings, at least for the first few years of the lifecycle of your property, are likely going to come from one of the major booking channels (Airbnb or VRBO). You’ll need to think about optimizing your listing for these platforms, and we have found that choosing one and tailoring things to that channel works best. Here are some of our top suggestions:

• High-quality photography: After you have made your interior improvements and upgrades, invest in professional photography to showcase your property. Make sure you let them know what you would like to highlight when you book the session, and if possible, include areal photography.
• Show off how to enjoy your place: Most listings out there have typical real estate photos – nice shots that show an empty house during the daytime. You’ll want to work on some of your own photos that show how the property is enjoyed by real people. Take some pictures with people (not faces) watching the sunset and having a fire (or roasting marshmallows), take some shots enjoying the waterfront or hiking on trails. Include photos taken at sunset, sunrise, and after dark. Anything that shows a potential guest what it is like to actually enjoy your short-term rental will make your listing more appealing.
• Effective listing optimization: Think about the main listing photo, the headline (or title) of your listing, as well as all the relevant amenities you provide and put them in the listing. Working to make sure your listing is 100% complete and keeps up with the listing platform (platforms are constantly updating and changing what they allow and require in their listings) will help provide you with the best results.
• Focus on building positive reviews: Make sure to check in with guests during their stay and, most importantly, ask them to leave a good review when they check out. It’s really important to build momentum with the online search platforms so they know if they show your listing to a potential guest, that person will like what they see, book the property and leave a positive review when they’re done.

The short-term rental market in 2025 presents numerous opportunities, but it will take more effort than it has in years past to stay relevant. By leveraging technology, making your listing stand out, and optimizing your online visibility, owners and hosts can not only succeed, but thrive in this competitive landscape.