STR Glossary

Q: What does STR mean in real estate?

STR means Short-Term Rental — a furnished property rented for stays under 30 days, such as an Airbnb or VRBO. In listings, "STR allowed" signals that zoning and HOA rules permit short-term renting, which can significantly increase a property's income potential.

Q: What does ADR mean for Airbnb?

ADR (Average Daily Rate) is your average nightly income: total rental revenue divided by nights booked. If you earned $3,000 across 12 booked nights, your ADR is $250. It is the core pricing metric for any short-term rental.

Q: What is RevPAR in short-term rentals?

RevPAR (Revenue Per Available Room) equals ADR multiplied by occupancy rate. It blends pricing and demand into one number, making it the best single measure of STR performance. A $250 ADR at 65% occupancy is a $162.50 RevPAR.

Q: What is a good cap rate for a short-term rental?

Most STR investors target an 8-12% cap rate — higher than the 4-6% typical of long-term rentals — to compensate for the extra operational work. Cap rate is Net Operating Income divided by property value.

Q: What does STR-friendly mean?

STR-friendly means a property, HOA, city, or lender permits or supports short-term rentals. Always verify: zoning, HOA covenants, and permit caps determine whether a property can legally operate as an Airbnb.

Q: Is short-term rental investing profitable?

STRs can generate 2-4x the gross revenue of an equivalent long-term rental, but profitability depends on market selection, regulations, seasonality, and operating costs. Metrics like RevPAR, cash-on-cash return, and break-even occupancy tell you whether a specific deal works.

Q: What is rental arbitrage?

Rental arbitrage means leasing a property long-term and re-renting it nightly on Airbnb with the landlord's permission — earning STR income without buying property. Startup costs are typically $10,000-$30,000 for deposits and furnishing.

Q: What is the difference between ADR, occupancy, and RevPAR?

ADR measures what you earn per booked night; occupancy measures how often you are booked; RevPAR multiplies them together to show what each available night actually earns. Two properties can have identical RevPAR through opposite strategies — high rate/low occupancy or low rate/high occupancy.

Essential terms and definitions every short term rental investor should know

No terms found matching your search.

A

ADR Average Daily Rate

ADR (Average Daily Rate) is the average rental income earned per booked night, calculated by dividing total rental revenue by the number of nights sold. In Airbnb and short-term rental investing, ADR is the core metric for measuring pricing strategy. See real market ADRs in our STR revenue report.

Example: If you earned $3,000 from 12 booked nights, your ADR is $250 ($3,000 ÷ 12 nights).

Airbnb Arbitrage

Airbnb arbitrage (rental arbitrage) is a strategy where an investor leases a property long-term, then sublets it as a short-term rental on platforms like Airbnb — entering STR without buying property. It requires landlord approval and carries unique risks. Full walkthrough: the 2026 rental arbitrage guide.

Amenities

Features and services provided at a rental property that enhance guest experience. Common STR amenities include WiFi, parking, pool access, hot tub, kitchen appliances, and entertainment systems. Premium amenities can justify higher nightly rates.

Average Length of Stay (ALOS)

The mean number of nights guests stay at your property per booking. Longer stays typically mean fewer turnovers and lower cleaning costs, but may command lower nightly rates.

Example: If you had 20 bookings totaling 60 nights, your ALOS is 3 nights.

B

Booking Window

The amount of time between when a guest makes a reservation and their check-in date. Understanding your typical booking window helps optimize pricing strategy and minimum stay requirements.

Break-Even Occupancy

The minimum occupancy rate needed to cover all operating expenses and debt service. Properties with lower break-even points are considered less risky investments.

Example: If monthly expenses are $3,000 and you charge $200/night, you need 15 nights (50% occupancy) to break even.

C

Cap Rate Capitalization Rate

Cap rate (capitalization rate) is a valuation metric calculated by dividing Net Operating Income (NOI) by property value. STR investors typically target 8-12% cap rates — well above the 4-6% common in long-term rentals — to compensate for operational workload. Learn to run the numbers in how to analyze an STR deal.

Example: A property generating $40,000 NOI valued at $400,000 has a 10% cap rate.

Cash Flow

The net amount of money moving in and out of your STR investment after all income is collected and all expenses (including mortgage) are paid. Positive cash flow means the property generates profit; negative means it operates at a loss.

Example: $45,000 annual revenue − $30,000 operating expenses − $9,000 mortgage = $6,000 annual cash flow (about $500/month).

Cash-on-Cash Return (CoC)

Cash-on-cash return (CoC) is annual pre-tax cash flow divided by total cash invested — the actual return on the money you've put into the deal. It is the essential metric for comparing leveraged STR investments. See it applied in STR cash flow analysis.

Example: $20,000 annual cash flow on $100,000 invested = 20% cash-on-cash return.

Channel Manager

Software that synchronizes your property listings across multiple booking platforms (Airbnb, VRBO, Booking.com, etc.) to prevent double bookings and manage availability from a single dashboard.

Cleaning Fee

A one-time fee charged to guests per stay to cover cleaning and turnover costs. Can be passed entirely to guests or split between host and guest. Higher cleaning fees may deter short stays but protect margins.

Co-Hosting

Co-hosting is an arrangement where a secondary host manages a short-term rental for a percentage of revenue (typically 10-25%), handling guest communication, cleaning coordination, and problem resolution. It is a common way to earn STR income without owning property — see the co-hosting guide.

D

Direct Booking

Reservations made directly with the host/property owner rather than through third-party platforms. Direct bookings avoid platform fees (typically 3-15%) and allow hosts to build direct guest relationships.

Dynamic Pricing

Dynamic pricing is an automated strategy that adjusts nightly rates based on demand, seasonality, local events, competitor pricing, and booking patterns. Tools like PriceLabs, Beyond, and Wheelhouse provide it as a service, and most profitable STRs use one.

G

Gross Rental Yield

Annual gross rental income divided by property purchase price, expressed as a percentage. A quick screening metric, though it doesn't account for expenses or vacancy.

Example: $60,000 annual revenue on a $500,000 property = 12% gross yield.

Guest Screening

The process of evaluating potential guests before accepting bookings. May include reviewing guest profiles, ratings, verification status, and using third-party screening services to reduce risk of property damage or parties.

H

Host Guarantee

Protection programs offered by platforms like Airbnb that cover property damage caused by guests. Coverage limits and claim processes vary by platform, and many hosts supplement with additional STR insurance.

Hot Tub Premium

The additional nightly rate a property can command by offering a hot tub. In mountain and cold-weather markets, hot tubs can increase rates by $25-75/night and significantly boost occupancy.

L

Length of Stay (LOS)

The number of nights a guest books. Managing minimum LOS requirements helps balance revenue per booking against turnover costs and cleaning frequency.

Example: Bookings of 2, 4, and 3 nights average a 3-night LOS. A higher LOS cuts turnover and cleaning costs but reduces nightly-rate flexibility.

Listing Optimization

The practice of improving your property listing to increase visibility and bookings. Includes professional photography, compelling descriptions, strategic pricing, and keyword optimization for platform search algorithms.

Lodging Tax

Taxes imposed on short-term accommodations, also called occupancy tax, TOT (Transient Occupancy Tax), or HOT (Hotel Occupancy Tax). Rates vary by location (typically 6-15%) and may be collected automatically by platforms.

Example: With 6% state + 7% local lodging tax (13% total), a $200 night collects $26 that the host remits to tax authorities.

M

Mid-Term Rental (MTR)

Furnished rentals typically lasting 30 days to 12 months. MTRs serve traveling professionals, relocating families, and insurance housing needs. Often face fewer regulations than short-term rentals.

Minimum Stay

The shortest booking length allowed at your property. Longer minimums reduce turnover costs but may decrease overall bookings. Many hosts use variable minimums based on season and demand.

N

NOI Net Operating Income

Total revenue minus all operating expenses (excluding mortgage payments and income taxes). NOI represents the property's earning power before financing costs and is used to calculate cap rate.

Example: $70,000 revenue - $25,000 expenses = $45,000 NOI.

Nightly Rate

The price charged per night for your rental property. Nightly rates vary based on season, day of week, local events, and market demand. Setting optimal nightly rates is crucial for maximizing RevPAR.

Note: Nightly rate is the advertised price for one night; ADR is the realized average across all booked nights after discounts and seasonality.

O

Occupancy Rate

Occupancy rate is the percentage of available nights that are booked, calculated by dividing booked nights by total available nights. Healthy STR occupancy varies by market (50-75% is typical) — and high occupancy at low rates usually signals underpricing.

Example: 20 booked nights in a 30-day month = 66.7% occupancy rate.

OPM (Other People's Money)

Using financing (mortgages, investor capital, partnerships) rather than all personal funds to acquire investment property. Leverage can amplify returns but also increases risk.

Owner Block

Dates reserved by the property owner for personal use. While owner blocks provide vacation benefits, they represent opportunity cost in lost rental income during blocked periods.

P

PMS Property Management System

Software for managing vacation rental operations including reservations, guest communication, cleaning schedules, and financial tracking. Popular options include Hostaway, Guesty, Lodgify, and OwnerRez.

Platform Fees

Fees charged by booking platforms for listing and booking services. Airbnb typically charges hosts 3% (split-fee model) or 14-16% (host-only model). VRBO charges approximately 5% of booking total.

Primary Residence Requirement

A regulation requiring STR operators to live in the property as their primary home. Common in cities with strict STR laws, this limits investor-owned vacation rentals to protect housing supply.

R

RevPAR Revenue Per Available Room

RevPAR (Revenue Per Available Room) is ADR multiplied by occupancy rate — or total revenue divided by available nights. Because it combines pricing AND demand in one number, RevPAR is the single best measure of short-term rental performance.

Example: $250 ADR × 65% occupancy = $162.50 RevPAR.

Review Velocity

The rate at which a listing accumulates new reviews. Higher review velocity improves search ranking on most platforms. New listings need consistent bookings and reviews to build credibility.

S

Seasonality

Predictable fluctuations in demand based on time of year. Understanding your market's peak, shoulder, and off-seasons is crucial for pricing strategy, expense planning, and revenue forecasting.

STR Short Term Rental

STR stands for Short-Term Rental: a furnished property rented for short stays, typically under 30 days. In real estate, "STR" covers vacation rentals, Airbnbs, and VRBO properties that compete with hotels. When a listing says "STR allowed," it means local zoning and any HOA permit short-term renting — a major value driver for investors. Start with the STR investment guide or check your market's STR regulations.

STR-Friendly

STR-friendly describes a property, HOA, city, or lender that permits or supports short-term rentals. An "STR-friendly" listing means zoning, HOA rules, and local regulations allow legal short-term renting; an STR-friendly lender (like a DSCR lender) underwrites on projected rental income. Always verify with the local regulations — "friendly" today can change with one city-council vote.

Superhost

Airbnb's recognition program for hosts meeting specific criteria: 4.8+ rating, 90%+ response rate, <1% cancellation rate, and 10+ stays per year. Superhosts receive increased visibility and a badge on listings.

T

Turnover

The process of preparing a property between guests, including cleaning, laundry, restocking supplies, and inspection. Higher turnover frequency increases operational costs but often indicates strong booking demand.

Total Cash Invested

The sum of all cash put into an investment, including down payment, closing costs, renovation/furnishing costs, and initial reserves. Used as the denominator in cash-on-cash return calculations.

Example: $80,000 down payment + $8,000 closing costs + $25,000 furnishing + $5,000 reserves = $118,000 total cash invested.

V

Vacancy Rate

The percentage of available nights that go unbooked. The inverse of occupancy rate. High vacancy may indicate pricing issues, poor listing quality, or unfavorable market conditions.

Formula: Vacancy Rate = 100% − Occupancy Rate. A unit booked 219 of 365 nights runs 60% occupancy and a 40% vacancy rate.

VRBO

Vacation Rental By Owner, a booking platform owned by Expedia Group. VRBO focuses on entire-home rentals (no shared spaces) and typically attracts family travelers seeking larger properties.

Ready to Put These Terms Into Practice?

See these metrics with real numbers in the STR Market Analytics dashboard (ADR, occupancy & revenue for 58 markets), then connect with an STR-specialized realtor who speaks the language.

Get Matched Free

STR Terminology FAQs

What does STR mean in real estate?