What to Know Before You Invest lolita, 09/08/2025 Short-term rentals can be an attractive investment thanks to the potential for greater cash flow. But they also bring new challenges for investors more familiar with traditional long-term rental properties, from fast turnover between guests to extra regulations. Experts say the short-term rental market has also grown more competitive, making it even more important to do your homework and develop a strategy before diving in. Here are six points to consider before making your first short-term rental investment. 1. Do your homework on local regulations As popular as short-term rentals have become, they aren’t welcome in every city. Some, like Santa Monica, California, prohibit rentals of less than 30 days unless the resident stays in the property along with the guest. Others, like Chicago, allow unhosted short-term rentals but require property owners to register and pay a fee. Rules can change, so if you’re considering investing in a new area, pay attention to proposed legislation and local officials’ general attitudes toward short-term rentals, says James Carlson, co-owner of Colorado-based real estate firm Erin and James Real Estate, which specializes in short-term rental properties. Particularly in areas where policies seem unsettled, investors may want to have a “Plan B” strategy for … Continue Reading