A rare tax window just reopened for Airbnb and short-term rental hosts: 100% bonus depreciation is back in 2025. Learn how to use it to fully deduct upgrades, slash your tax bill, and reinvest smarter—before it phases out again.

Short-Term Rental Bonus Depreciation in 2025: What You Need to Know

The One Big Beautiful Bill Act (OBBA) restored 100% bonus depreciation in 2025, letting Airbnb hosts and short-term rental owners fully deduct qualifying asset costs.

Properties that qualify as businesses may use the short-term rental tax loophole to apply bonus depreciation beyond rental income.

With the bonus depreciation 2025 percentage set at 100%, now is the time to plan upgrades, place assets in service, and reduce your tax bill.

A rare tax window just reopened and it won’t stay open forever.

Thanks to the One Big Beautiful Bill Act, 100% bonus depreciation is back and it’s a game-changer for STR owners. Instead of spreading write-offs over years, you can now deduct the full cost of things like furnishings, appliances, and renovations the same year they’re placed in service.

For Airbnb hosts and short-term rental investors, this means bigger, faster deductions that free up cash flow and accelerate growth, whether you're upgrading your space or scaling your portfolio.

In this guide, we’ll break down how Airbnb bonus depreciation works, what’s changed under the bonus depreciation 2025 rules, and how to use it to your advantage. We’ll also flag a few key pitfalls so you can sidestep surprises and make the most of this window of opportunity.

Understand the investment potential of any address in the world.

Bonus depreciation is a tax incentive that allows you to deduct the full cost of certain business purchases immediately, rather than spreading those deductions over several years. For short-term rental owners, this typically applies to furniture, appliances, and eligible property improvements.

Bonus depreciation vs. standard depreciation

Standard depreciation, also called straight-line depreciation, spreads the cost of an asset over its useful life. For example, a $10,000 improvement might be deducted gradually over 5, 7, or even 15 years, depending on the asset type.

Bonus depreciation allows you to deduct a much larger portion (or in some cases, 100%) of that cost in the first year the asset is placed in service. This creates faster tax savings and can significantly improve cash flow for property owners who are actively investing in upgrades.

Here’s how it works in practice. If you spend $15,000 on furniture for your rental, standard depreciation might give you just a $2,000 deduction this year, with more spread out over time. Bonus depreciation lets you deduct the full $15,000 on your tax return for the same year the furniture is installed and ready for use.

Bonus Depreciation Changes in 2025 Under the Big Beautiful Bill

Bonus depreciation wasn’t always guaranteed in 2025. In fact, it was on its way out.

Under the Tax Cuts and Jobs Act (TCJA) passed in 2017, businesses could temporarily deduct 100% of the cost of qualified property (like furniture, appliances, and certain improvements) in the same year those items were placed in service. This was a major incentive designed to spur investment and economic growth, but it came with a catch: the 100% deduction was scheduled to phase out gradually.

Here’s how that original phase-down timeline looked:

By early 2025, STR investors were preparing for a tax cliff, where deductions would shrink just as renovation and furnishing costs were climbing. Many operators assumed they had missed the window to claim full write-offs on major expenses.

Then the One Big Beautiful Bill Act (OBBBA) changed everything.

Passed in July 2025, the bill reinstated 100% bonus depreciation for property placed in service after January 19, 2025. That means STR owners once again have the opportunity to deduct the entire cost of eligible business-use assets in the same year they are installed and ready to use.

For short-term rental investors, this change delivers immediate and practical benefits. If you're planning to furnish a new unit, upgrade finishes, or renovate an existing listing, placing those assets in service before year-end could result in substantial first-year tax savings.

The restored bonus depreciation rules make it possible to:

That makes 2025 a smart time to revisit your plans, accelerate upgrades, and ensure eligible assets are placed in service before the deadline.

How Bonus Depreciation Works for Short-Term Rentals

Short-term rentals are often treated as businesses by the IRS, not passive rental properties, if they meet certain conditions. That classification is what allows STR owners to take advantage of powerful deductions like 100% bonus depreciation.

To qualify as generating active income, your property must generally meet both of the following:

The average guest stay is fewer than 30 days.

You provide services during the stay, such as cleaning, fresh linens, or guest support.

If your STR meets these criteria, the IRS treats it like a business, not a typical long-term rental. That opens the door to: faster property depreciation timelines, full deductions under bonus depreciation rules, and the potential to use the short-term rental tax loophole to apply those deductions beyond just rental income

Assets Eligible for Bonus Depreciation in STRs

Not everything in your short-term rental qualifies for bonus depreciation, but many of the assets you're likely to purchase do. To qualify under IRS Section 168(k), assets must:

Be used in a trade or business (your STR must be operated like a business)

Must be placed-in-service (which means installed and ready for guests to use) in the same tax year you’re claiming the deduction

This includes most furnishings and interior upgrades commonly made by STR owners.

Here are some examples of assets typically eligible for 100% bonus depreciation in 2025:

Furniture: beds, sofas, dining sets, nightstands, outdoor furniture

Appliances: dishwashers, dryers, stoves, refrigerators

Electronics: TVs, security systems, routers, smart home devices

Fixtures and finishes: new flooring, light fixtures, cabinetry, countertops

Installation and delivery costs: if directly tied to eligible assets

Qualified Improvement Property (QIP): interior, non-structural upgrades made to an existing building already placed in service—such as painting, drywall repair, or HVAC systems.

Want to take it even further? If you’ve purchased a full property or done a major renovation, a cost segregation study can break down your building into components (like cabinets, flooring, or lighting) that qualify for faster depreciation. Many of those assets fall into 5-, 7-, or 15-year classes, making them eligible for 100% bonus depreciation under the 2025 rules.

While a study can cost a few thousand dollars, the potential first-year tax savings often far outweigh the upfront expense, especially for higher-value STRs. Talk to a tax pro to see if it’s worth it for your situation.

Improvements that don’t qualify for bonus depreciation

Not every property upgrade is eligible for 100% bonus depreciation. The IRS draws a line between non-structural interior improvements (which may qualify) and major structural work (which doesn’t).

Here are examples of improvements that generally do not qualify:

Building expansions or structural additions

Exterior work like walls, windows, decks, or landscaping

These types of projects either fall outside the 20-year recovery window or are considered structural improvements—making them ineligible under current bonus depreciation rules.

If you’re unsure where your planned upgrades fall, a short-term rental CPA can help you categorize your assets correctly and avoid surprises during filing or an audit.

AirDNA’s powerful yet easy-to-use tools make hosting and investing a breeze. This means having every insight you need, all in one place, always up-to-date.

Bonus depreciation might sound technical, but calculating it is actually pretty straightforward once you understand the rules. The key is knowing what qualifies, when to apply it, and how it impacts your taxes based on how you report your short-term rental income.

Here’s how to calculate bonus depreciation on your short-term rental purchases:

This includes the total amount you paid for the asset, plus any related costs like shipping, installation, or setup. For example, if you buy a $5,000 couch and spend $500 on delivery and assembly, your cost basis is $5,500.

The asset must have a useful life of 20 years or less, be used in your STR business, and be placed in service during the tax year you’re claiming the deduction.

For 2025, that percentage is 100%. So if the total cost basis is $10,000 and all of it qualifies, you can deduct the full $10,000 on your 2025 tax return.

The asset must be installed and ready to use for guests by December 31, 2025 to qualify for this year’s deduction. Keep receipts, install dates, and any relevant records to support your claim.

Report it based on how you manage your STR

If you’re actively managing your STR (handling bookings, guest communication, cleaning, etc.), your rental may qualify as a business. In that case, you could report it on Schedule C and use the deduction to offset not just rental income, but also other income like W-2 wages. If your STR is passive, reported on Schedule E, your deduction would apply only to rental income.

Example of Bonus Depreciation Calculation

Let’s say Ben is setting up his first short-term rental in 2025. He spends $20,000 getting it ready for guests:

$6,000 on kitchen improvements (cabinetry, lighting, countertops)

$2,000 on delivery and professional installation

All assets are placed in service before December 31, 2025, and they fall into 5-, 7-, or 15-year property classes, making them eligible for 100% bonus depreciation.

Because Ben actively manages the property himself (no third-party manager), he reports his rental income on Schedule C. That allows him to treat the STR as a business and apply the full $20,000 deduction against all of his income, including W-2 earnings from his day job.

The result? Ben reduces his total taxable income for 2025 by $20,000, lowering his tax bill and improving cash flow, money he can now reinvest in his listing or set aside for a second property.

While bonus depreciation gets most of the spotlight under the One Big Beautiful Bill Act, Section 179 is another tax tool STR owners can use to accelerate deductions. It allows you to write off the full cost of certain business-use assets, but it comes with annual limits and income thresholds. It also requires you to choose which assets to expense.

In contrast, bonus depreciation applies automatically, has no dollar cap, and (thanks to OBBA) is fully restored to 100%.

For most short-term rental investors in 2025, bonus depreciation will be the simpler and more impactful strategy, especially when outfitting or upgrading multiple properties at once.

The Recapture Rule: What Happens If You Sell or Stop Running Your Short-Term Rental

Let’s say you’ve taken full advantage of bonus depreciation. You’ve deducted thousands of dollars upfront on furniture, appliances, and improvements. What happens if you decide to sell your short-term rental… or stop operating it altogether?

When you take bonus depreciation, you're writing off the cost of eligible assets now, instead of spreading the deductions over time. But the IRS doesn’t forget that you already got those tax benefits.

If you sell the property or stop using it as a business after taking bonus depreciation, the IRS may "recapture" some of those deductions by treating them as taxable income in the year of the sale or conversion.

In simple terms: You may owe taxes on the depreciation you previously claimed.

And here’s the kicker—even if you didn’t claim the deduction, the IRS still assumes you did. That’s because depreciation recapture is based on “allowed or allowable” depreciation. If you were eligible to deduct it, it’s treated as if you did. Your property’s basis is reduced just the same, and the IRS expects to tax that amount when you sell.

This doesn’t mean you’ll owe the full amount back, but the IRS will tax part of your profit at a higher rate. Specifically, the portion of your gain that reflects the value of those past write-offs is taxed as “depreciation recapture,” often at 25%, instead of the typical capital gains rate (usually 15-20%).

Let’s say you deducted—or were eligible to deduct—$30,000 in bonus depreciation when setting up your STR. A few years later, you sell the property. The IRS doesn’t let that $30,000 go untaxed. They “recapture” it by taxing that amount as ordinary income up to a 25% rate. This can increase your tax bill in the year you sell, even if the property appreciated in value.

The good news? Recapture doesn’t have to come as a surprise. In many cases, the long-term savings from bonus depreciation still outweigh the tax hit down the road.

Here are two smart ways to manage the risk:

The IRS does not adjust recapture based on the asset’s useful life or how long you've held the property. However, the longer you keep the asset in service, the more value you get from the original deduction—and the longer you defer the tax hit. If you’re planning to hold for 5+ years, the benefit often outweighs the recapture. 

If you reinvest the proceeds from the sale into another qualifying investment property, you can defer capital gains and depreciation recapture taxes using a 1031 exchange. This strategy requires advance planning and has strict rules, but it’s commonly used by real estate investors to keep growing tax-efficiently.

The bottom line: Recapture is a tax reality, not a penalty. Bonus depreciation still gives STR owners a powerful head start on cash flow and reinvestment. As long as you’re planning ahead, you can make those savings work in your favor over the long run.

The One Big Beautiful Bill Act has created a powerful but temporary opportunity for short-term rental owners to reduce their tax burden and improve cash flow, but only if you act while the rules are in effect.

Here’s how to make the most of 100% bonus depreciation while it lasts.

Start by reviewing your current and planned expenses for 2025. Look for items that qualify for bonus depreciation, such as:

Interior renovations like lighting, flooring, or cabinets

Installation and delivery costs tied to those assets

If you’ve been holding off on refreshing your space or launching a new unit, now’s the time to move forward. Bonus depreciation applies only to assets placed in service (meaning installed, functional, and ready to use) before the end of the tax year.

Since 100% bonus depreciation is guaranteed only through 2027, placing assets in service sooner rather than later gives you the most flexibility. Planning a full renovation? Consider prioritizing interior upgrades that qualify under Qualified Improvement Property (QIP).

Need to furnish a unit? Confirm delivery and setup are completed by December 31, 2025 to ensure it counts on this year’s return.

Good record-keeping isn’t just for your accountant. It’s your defense if the IRS ever asks for proof.

Photos or guest-ready listings that show the asset in use

Any costs bundled into the installation (like setup or shipping fees)

If you’re managing your STR as an active business, also keep a log of your hours spent on bookings, communication, cleaning, and maintenance. This helps support non-passive status and potentially qualifies your income for the QBI deduction, too.

2025 isn’t just another tax year. It’s a window of opportunity for short-term rental investors. With 100% bonus depreciation fully restored, there’s real momentum to upgrade, expand, and operate with more intention. Treat your rental like a business, plan strategically, and you’ll be set to make the most of this rare moment in the tax landscape.

Discover your next profitable short-term rental with real market revenue projections.

Bonus depreciation is a tax incentive that lets you deduct a large portion—or even the full cost—of certain business-use assets in the same year you place them in service. For short-term rental (STR) owners, this often includes things like furniture, appliances, and qualified interior improvements. Instead of spreading deductions over several years, bonus depreciation gives you upfront tax savings and better cash flow when you invest in your property.

To calculate bonus depreciation, add up the cost basis of eligible assets (purchase price plus delivery or installation), confirm they were placed in service during the current tax year, and apply the current bonus depreciation percentage. In 2025, that percentage is 100%, so you can deduct the entire cost on your tax return if your STR qualifies as a business and the assets meet IRS guidelines.

Yes—bonus depreciation is 100% in 2025, thanks to the One Big Beautiful Bill Act (OBBA). Before this law passed, the percentage was phasing down and expected to drop to just 40% in 2025. OBBA reversed that decline and restored full bonus depreciation for qualifying property.

Can I take both bonus depreciation and Section 179 on the same return?

Yes, you can use both bonus depreciation and Section 179, though they operate differently. Section 179 lets you choose which assets to expense and how much, up to an annual limit. Bonus depreciation applies automatically (unless you opt out) and has no dollar cap. Many STR investors use Section 179 for targeted deductions and bonus depreciation for the rest, especially during years when major upgrades or purchases occur.

Bonus depreciation vs. Section 179: What’s the difference?

Both allow accelerated deductions for business assets, but they’re not interchangeable.

Bonus depreciation: No dollar limit, applies automatically, and allows full deduction in the year an asset is placed in service.

Section 179: Lets you control which assets to deduct, but comes with annual limits and more rules.

In 2025, most STR owners will find bonus depreciation simpler and more powerful, especially when outfitting or renovating multiple properties.

Bonus depreciation is generally good for STR investors, as long as it fits your tax strategy. It can reduce taxable income and improve cash flow in the short term. However, it’s not free money: you may face depreciation recapture when you sell the property. That said, many investors find the upfront savings outweigh the long-term tax impact, especially if they hold or 1031 exchange the property.

Can you do bonus depreciation on rental property?

Yes, but with a few caveats. Bonus depreciation applies to certain components of rental property, not the land or entire structure. Eligible assets must have a useful life of 20 years or less, such as appliances, flooring, or fixtures. Additionally, short-term rentals that qualify as a business (not passive investments) are more likely to fully benefit from bonus depreciation. If you're actively managing your STR, you're likely in good shape to take advantage.

Bonus depreciation is back in 2025. Learn how Airbnb hosts can maximize deductions and reduce taxes fast.

How to Scale Rental Properties: Strategies for Growing Your STR Portfolio


Key Takeaways:
Grow your STR portfolio through careful selection of diverse properties, guided by detailed market data.
Boost earnings by using dynamic pricing and frequently evaluating your investments for performance.
Overcome expansion hurdles with strategic management and insights from current market trends.

You've already climbed the first big hill: your initial real estate investment. You navigated through those early mornings and late nights, balancing spreadsheets, managing your first guests, and maybe even tackling a surprise maintenance issue or two. Now you’re looking over the horizon, thinking, "What's next?”  The answer: it’s time to scale up. 

If you're looking to grow your short-term rental (STR) business, it's not just about adding more properties to your portfolio. You want to create a legacy and a consistent source of passive income that can withstand market changes. You need a well-planned strategy that considers every step carefully to achieve this goal. That’s why we’ve outlined the strategies on how to scale your rental properties successfully and sustainably. 

Research Airbnb Markets

Gain insights into the revenue and occupancy trends in your market.

Start for free
Why You Should Scale Your Short-Term Rental Business 

Scaling is all about strategically increasing the scope of your investments to make them more profitable, spread risk, and capitalize on new opportunities. For real estate investors, this goes beyond adding more properties to their portfolio. They should also consider diversification across different real estate types, such as raw land, single-family homes, multifamily real estate, and commercial properties.

When applied to the niche of STRs, scaling becomes an avenue for tapping into the growing market of travelers and vacationers looking for unique lodging experiences. It's about leveraging the flexibility and high-yield potential of Airbnb properties to build a resilient, profitable investment strategy. Read AirDNA’s article, 10 Reasons Why You Should Scale Your Airbnb Investments, if you’re intrigued by the prospect of expanding your Airbnb operations.

How to Scale Rental Properties Effectively
1. Set the Right Foundation for your Rental Property Business
Establish a Goal

Sophisticated investors know that clear, measurable objectives are the bedrock of successful real estate investments. Your focus may range from maximizing rental income to purchasing properties that will appreciate in value over time to enhancing your portfolio's diversity. Regardless of your focus, setting precise goals guides your strategic decisions and investment choices.

Educate Yourself on Real Estate Investment Strategies

Advanced real estate investing extends beyond basic rental income to encompass a variety of strategies to meet diverse financial goals. Explore in-depth tactics, including the BRRRR method or leveraging commercial real estate for higher yields, to find the strategy that aligns with your investment objectives and market opportunities. An STR-friendly real estate agent can help bring you up to speed on the investment strategies most relevant to you and your goals.

Learn from Your First Vacation Rental Property

The first property purchase is pivotal. It offers you invaluable lessons in market analysis, property management, and guest satisfaction. It’s where you apply your budgeting skills in a real-world context and learn what makes a rental property successful. This experience provides a blueprint for expansion, teaching you to identify properties that not only align with your investment goals but also have the potential for high occupancy rates and favorable returns. Integrating these insights into your real estate investing strategy enables a smoother transition as you scale, ensuring each addition to your portfolio builds upon the success of the last.

Decide How You Will Manage Your Vacation Rentals

Determining your plan for managing multiple properties from the outset is important. Whether you opt for self-management to maximize control or leverage property managers for convenience and expertise, your decision will majorly influence your operational efficiency. This choice impacts everything from guest satisfaction to the scalability of your investments. Our property manager's guide to scaling can provide you with a clearer understanding of how to sustain growth. We’ve also put together a list of the top property management companies in the U.S. to make it easier for you to put your STR in good hands.

2. Research and Prepare for Profitability 
Research Potential Markets and Explore Your Earning Potential

Leveraging advanced data analytics and market research tools is crucial for real estate investors to identify high-potential investment properties. Platforms like AirDNA offer comprehensive market insights, enabling you to pinpoint locations with the highest seasonal RevPAR and assess the earning potential of diverse property types. 

Hottest Airbnb Markets
Free Airbnb Calculator
Look Up the Relevant Local, State, and Federal Laws and Regulations

Navigating the regulatory landscape is more crucial than ever, with laws affecting everything from rental property operations to tax obligations. A deep understanding of these regulations and each local real estate market ensures your investments remain compliant and profitable.

Prepare a Budget

A comprehensive budget is the cornerstone of successful real estate investments, ensuring financial readiness for both expected and unexpected expenses. A comprehensive budget encompasses monthly operating costs, potential rental income, and potential unexpected expenses. A well-prepared budget means you're financially equipped to make a smart investment and maintain your property long-term.

Explore Financing Options

Financing the next property might involve moving beyond traditional mortgages to options tailored for the growth of investment properties. Explore a range of financing options tailored to real estate investors, from portfolio loans to creative financing strategies, to fuel the growth of your investment properties. 

Host Financial suggests using Debt-Service Coverage Ratio (DSCR) loans, which are specifically tailored for income-generating properties such as vacation rentals. Unlike traditional loans, DSCR loans evaluate the property's capacity to generate cash flow rather than relying solely on the borrower's personal income. This makes them an excellent option for investors looking to expand their real estate investment portfolio. DSCR loans give you the leverage necessary to purchase multiple properties simultaneously, thereby accelerating growth while minimizing risk.

Learn about financing your vacation rental to understand the options at your disposal.

Calculate potential earnings

Understand the investment potential of any address in the world

See your STR revenue potential
3. Scale Strategically
Use Your STR Revenue History to Secure Loans for Additional Properties

A solid track record of rental income demonstrates your success as a real estate investor to lenders, making it easier to secure financing for new properties. Present a well-documented history of your STR revenue and unlock better loan terms for acquiring additional properties. Learning how to leverage this history effectively is crucial for expanding your portfolio strategically.

Leverage Equity to Secure Loans for Additional Properties

Equity in existing properties can be a powerful tool for financing the expansion of your portfolio. You can access funds at competitive rates through home equity loans or lines of credit, using the value you've built in your current investments as collateral. This strategy provides the capital needed for new acquisitions and also utilizes the assets you already own to foster growth.

Use the BRRRR Method

The BRRRR method—Buy, Rehab, Rent, Refinance, Repeat—offers a systematic approach to scaling your real estate investments. You can reinvest equity into new projects by rehabilitating underperforming properties and refinancing based on the improved value. This method not only maximizes the efficiency of your capital but also accelerates the growth of your property portfolio. The BRRRR method is a favored strategy among savvy investors.

Become a better host

4. Expand Your Real Estate Portfolio
Diversify Property Types

Diversification is key to mitigating risk and ensuring steady growth in real estate investment. Expanding your portfolio to include various types of properties—like single-family homes, multifamily properties, and commercial real estate—across different markets can protect you against fluctuations in any single sector.

The same principle applies to short-term rentals. “Investing in different types of properties and in various locations can help mitigate risk and tap into different tourist demographics and seasons,” says Daniel Ramirez from Host Financial, “This approach requires thorough market research to identify emerging destinations with high growth potential. Diversification not only spreads out your investment risk but also maximizes revenue potential by appealing to a broader range of guests." 

Be sure to listen to this episode of AirDNA’s podcast on diversifying your real estate investments. 

Consider Seasonal Markets 

Diversification isn't just about varying your property types—it's also about strategic timing and geographic location. Targeting markets with differing peak seasons ensures that your income streams don't dry up at the same time. 

For example, incorporating properties from areas with high RevPAR during the spring, such as Coachella Valley, CA, can balance out off-peak seasons in other parts of your portfolio. Similarly, investing in winter hotspots like Park City, UT, complements investments in summer destinations like Lake of Ozarks, MO. The chart below illustrates the various markets that hit their peak revenue per available room (RevPAR) at different times of the year, offering you a roadmap for strategic investment and revenue balancing throughout the seasons.

You can create a rental portfolio that maximizes occupancy and income year-round and mitigates the risk of low-season downturns by carefully selecting properties across diverse markets. This approach stabilizes your monthly cash flow and underpins a robust growth strategy that taps into each location's unique demand cycles.

Find your next investment

5. Evaluate and Optimize Along the Way
Assess Your Real Estate Investments Regularly 

Regularly evaluate your properties to maintain a profitable real estate portfolio. This involves analyzing rental income, occupancy rates, and maintenance costs to gauge whether your investments align with current market trends and your long-term financial goals. Consider integrating tools and data to gain a deeper understanding of each property’s performance and the overall health of your portfolio.

Start AirDNA for free

Sell Low-Performing STRs with a 1031 Exchange

If certain properties aren't yielding the expected returns, it might be time to consider a 1031 exchange. This tax-deferral strategy allows you to sell underperforming STRs and reinvest the proceeds into more promising real estate investments without immediate capital gains taxes. It's a strategic move that can help optimize your portfolio's performance and realign it with your investment criteria.

Seek Expert Guidance as Needed

Navigating the complexities of real estate investment often requires professional insight. This is especially true when you’re ready to optimize your portfolio or utilize tax strategies like a 1031 exchange. Don't hesitate to consult real estate professionals, financial advisors, or tax experts who can provide tailored advice and help you make informed decisions. Engaging with experts can be instrumental in maximizing your portfolio’s potential and staying ahead in the ever-changing real estate market.

6. Prepare for Challenges
More Properties, Unhappier Guests

Scaling your vacation rental business can be a double-edged sword, especially when trying to keep your guests happy. AirDNA data reveals that as the number of properties under a host increases, it becomes challenging to provide personalized attention that typically results in higher review scores. 

For instance, hosts with a single listing can achieve an average review score of around 4.89. This high number is a testament to the focus they can give to each guest's experience. However, when operations expand to 100 or more listings, review scores dip to an average of 4.66.

However, it's worth noting that not all declines in specific review scores should be cause for concern. For example, a dip in the 'value' score might reflect a conservative pricing approach rather than a drop in actual service quality. 

In a larger operation, you can refine your revenue management using dynamic pricing strategies and specialized tools that can offset the impact of lower scores in certain areas. In essence, scaling gives you the means to invest in resources that can further professionalize and profit-optimize your business. This can lead to an increase in overall profitability, even if every single score isn't perfect.

Learn about Dynamic Pricing

Cleanliness and Communication Take Hits

When you scale your rental business, the attention to detail that delighted your initial guests can be challenging to replicate across a larger operation. AirDNA data analysis highlights that hosts with a single listing might find it easier to maintain spotless environments and provide immediate responses to guests. These aspects tend to see a dip in satisfaction as the number of properties increases. It's a common growing pain in scaling – as you broaden your reach, overseeing the same level of cleanliness and communication becomes more complex.

It’s crucial to establish systems that allow for personalization at scale—whether that’s through automated yet customized guest communications or by implementing a guest feedback loop that helps you to continuously improve their experience. Maintaining this personal touch translates into repeat business and excellent reviews, which are the lifeblood of a thriving rental property business.

Complex Operations Require Better Management

With each new property added to your portfolio, the demand on your operational capabilities multiplies. This is where strategic delegation and potential adoption of property management software become essential. Consider using property management services or technologies that can help streamline booking processes, maintenance schedules, and guest communications. Effective management is key to handling the increased workload without sacrificing service quality or operational efficiency.

Optimize for Dynamic Pricing Challenges

Dynamic pricing can be a complex but rewarding strategy for maximizing your rental income. It involves adjusting your prices in response to market demand, competition, seasonal trends, and even local events. Tools like the AirDNA app can help you navigate these challenges by providing market data and pricing recommendations tailored to your properties. You can ensure your pricing strategy adapts to market changes and maximizes revenue potential by employing these resources.

Try Our Vacation Rental Pricing Tool

Use Smart Rates™ to optimize your pricing strategy

Start for free
The Benefits of Scaling Real Estate Investments 

Scaling short-term rentals (STRs) brings a wealth of opportunities for real estate investors, from generating strong passive income streams to strengthening your financial portfolio. The flexibility of STRs means you can adjust to market demands quickly, optimizing occupancy and maximizing returns. 

Furthermore, STRs often yield higher rental income than traditional long-term rentals, especially when you pair a strategically located STR with savvy revenue management practices. This scalable approach allows you to grow your investment footprint by catering to a diverse and expanding traveler base seeking unique accommodation experiences. 

For a deep dive into markets offering the highest potential for STR investment growth, AirDNA’s research is an invaluable resource for strategic investment decisions.

Expand your STR empire with smart data insights and savvy management tips. Start scaling with confidence today.

 10 Reasons to Start and Scale an Airbnb Business | AirDNA 

 12 Qualities of an Investor-Friendly Real Estate Agent and How to Find One 

 Scale Your Airbnb Business with Vacation Rental Managers’ Guide 

 Best Airbnb Property Management Companies by U.S. Market  

 Friend or Foe? Understanding Short-Term Rental Regulations 

 A Property Owner’s Guide to Short-Term Rental Expenses 

 Airbnb Loans: A Data-Driven Guide to Financing 

 Short-Term Rental Financing: A Step-by-Step Guide 

 5 Tips For Acing Your Airbnb Guest Communications - AirDNA 

 Tim Hubbard: Should You Diversify Your Real Estate Portfolio? | Episode 9 | STR Data Lab™ by AirDNA 

 Best Places to Invest in Vacation Rental Property | AirDNA 

Find the best short-term rental investments.
Find your next investment

What is the BRRRR method in real estate

Calculate potential short term rental earnings

Actionable data and insights to help you optimize and grow

Find great investment opportunities to grow your portfolio

Increase revenue with competitive analysis

Win and retain clients, grow your business.

Build custom comps to benchmark performance

Unlock crucial travel and tourism trends by destination

Invest with confidence using advanced market insights

Grow revenue 20% with local prices, occupancy, and trend data.

Research Solutions

Features

Feature

Enterprise Solutions

Investing Resources

Investing Resources Right Side

Free Tools

Hosting Resources

Ressources pour les hôtes

Short-Term Rental Bonus Depreciation in 2025: What You Need to Know

ARTICLE SUMMARY

QUICK NAVIGATION