help me with a smart decision ( short term rental VS long term)

[Baha El Far]

All,

I hope you are doing great.

I have an apartment 2bed/1 bath that I own and I am not sure if I should rent it out as a short-term rental/airbnb or long term. I heard the tax rates for short-term rentals are higher and more complicated. I am going to list a few details for both from a real estate agent that I trust and she will be my property manager. she has been in the  short term rental market for over 8 years and recommended by friends. 


1) Short term rental income (1478$/month)

Furniture investment 6k$
90$/night
The average occupancy rate is 80% but could go as high as 98%.
the management fee is 20% of the income

Utilities and wifi fees are 250$

Income = 90 $/night x30 nights x 0.8 (occupancy rate) x 0.8 (management fees) – 250$ (utilities and wifi)

Income = 1478$/month


2. Long term rental (1000$ a month)

fairly high occupancy rate with a yearly lease/management fee is 5%

1000$/month



what do you recommend? can you highlight more on the tax of short term rental? any reference I could use to understand the tax benefits and how can I add deductible?

Thankss!! 

[Robin Simon]

general rule of thumb (general though - many differences out there) is that STRs should make at least 2X as much as a LTR to compensate for the additional hassle and risk. If this one is significantly less, it might not make sense to STR this one