Most real estate investors follow a familiar strategy: buy a property, renovate it, and rent it to long-term tenants on six- or twelve-month leases. While this approach offers stability, it may not deliver the maximum income potential—especially in today’s experience-driven travel economy.
A growing number of investors are taking a different approach: converting renovated rental properties into short-term vacation rentals. In many high-demand markets, vacation rentals can generate 25% to 50% more revenue per week than traditional long-term rentals—sometimes in just a single week of bookings.
Thanks to platforms like VRBO and Airbnb, it’s easier than ever to market, manage, and keep short-term rentals occupied year-round. For investors willing to rethink how they use their renovated properties, this strategy can unlock powerful cash-flow opportunities.
Why Short-Term Rentals Are Gaining Momentum
The vacation rental market continues to grow as travelers prioritize space, privacy, and flexibility. According to AirDNA, demand for short-term rentals remains strong in both traditional vacation destinations and drive-to markets across the U.S.
Popular locations include:
- Beach communities
- Lakefront destinations
- Mountain towns
- National park gateways
- Suburban and small-city “staycation” markets
With the right property and management strategy, a renovated rental can remain booked for much of the year—while still allowing owners flexibility to adjust pricing seasonally.
What to Look for When Buying a Vacation Rental Investment
Not every rental property is suited for short-term use. Investors considering this strategy should evaluate several key factors before purchasing.
Choose a Location You Know Well
Investing in an area you’ve visited—or lived in—gives you a major advantage. Familiarity with local attractions, seasonal demand, restaurants, and traveler behavior helps you make smarter renovation and pricing decisions.
Markets you understand reduce surprises and make it easier to tailor the property to guest expectations.
Prioritize Accessibility and Convenience
While a remote cabin may sound appealing, accessibility matters. Vacation renters often include families, older travelers, or first-time visitors who value convenience.
Consider:
- Reliable road access
- Proximity to attractions
- Cell service and internet availability
- Clear directions and parking
If a property is difficult to reach or lacks basic utilities, it may limit your booking potential and reviews.
Buy Below Market, Renovate Strategically
Just like fix-and-flip investing, the numbers matter. Many fully renovated vacation homes are already priced at a premium, leaving little room for strong returns.
Instead:
- Buy below market value
- Renovate with durability and guest experience in mind
- Avoid over-improving beyond local expectations
In many vacation markets, “clean, comfortable, and well-designed” outperforms luxury. Sometimes shabby chic or modern rustic resonates more than high-end finishes.
Location Is Even More Critical Than with Traditional Rentals
With long-term rentals, a solid neighborhood can be enough. With vacation rentals, location drives demand.
Proximity to:
- Water
- Ski resorts
- Downtown districts
- Entertainment and dining
often matters more than square footage. A modest home in the right spot can outperform a larger property in a less desirable location.
Professional Photos Are Non-Negotiable
Vacation rental guests shop with their eyes. High-quality photography dramatically impacts click-through rates, booking conversions, and nightly pricing.
According to Airbnb hosting data, professionally photographed listings earn significantly more per booking than amateur photos.
Stage the home, maximize natural light, and highlight standout features before listing.
Property Management Makes or Breaks the Strategy
Short-term rentals require more hands-on oversight than traditional leases. Many investors hire professional property managers to handle:
- Guest communication
- Cleaning and turnovers
- Maintenance
- Pricing optimization
While management fees reduce net income, they often improve occupancy rates and guest satisfaction—protecting long-term profitability.
Why This Strategy Works in Today’s Market
With more families opting for road trips, extended stays, and group travel, demand for well-managed vacation rentals continues to grow. Many U.S. markets still face a shortage of high-quality, professionally renovated short-term rental properties.
For investors who already renovate homes, this strategy allows you to:
- Increase cash flow
- Diversify income streams
- Retain long-term ownership
- Benefit from appreciation and tax advantages
Financing Your Renovated Rental Strategy
Whether you’re acquiring, renovating, or refinancing a property for short-term rental use, having the right financing partner matters.
Center Street Lending specializes in fast, flexible real estate financing solutions designed for investors—whether your strategy involves long-term rentals, short-term vacation properties, or a hybrid approach.
Contact Center Street Lending today to learn how our bridge loans and investor-focused financing can help you turn a renovated rental into a high-performing income asset.
