Launching your first short-term rental is exciting, but the process can feel overwhelming without a clear roadmap. This guide breaks down the entire journey into four phases across 90 days, giving you a concrete timeline and checklist to follow.
Whether you're buying a dedicated investment property or converting an existing home into an STR, these steps will help you avoid costly mistakes and set yourself up for success from day one.
Phase 1: Pre-Purchase Planning (Days 1-30)
The first month is all about laying the groundwork. Don't rush to make offers without doing your homework - the decisions you make here determine everything that follows.
Define Your Investment Criteria
Before looking at a single property, get clear on your parameters:
- Budget: What's your total purchase price range? Remember to account for 20-25% down payment plus closing costs and setup expenses.
- Target market type: Beach? Mountains? Urban? Each has different seasonality, guest demographics, and management requirements.
- Self-manage vs. hire: Your proximity to the property and available time should influence this decision. Self-management requires 10-15 hours per week.
- Return expectations: What cash-on-cash return do you need? Most investors target 8-15% in strong markets.
Start with one market and learn it deeply rather than spreading your research thin across multiple areas. You can always expand later.
Research Your Target Market
Spend at least two weeks researching potential markets. Use tools like AirDNA, Mashvisor, or AllTheRooms to analyze:
- Average Daily Rate (ADR) for comparable properties
- Occupancy rates by season
- Revenue trends over the past 2-3 years
- Supply growth (new listings entering the market)
- Local regulations and permit requirements
Get Your Financing Pre-Approved
Talk to lenders early - not all banks understand STR investing. You'll want to explore:
- Conventional loans: Best rates but may require the property as a second home
- DSCR loans: Qualify based on property income, not personal income
- Portfolio lenders: Local banks with flexible underwriting
Phase 1 Checklist
- Define budget, market type, and return expectations
- Research 2-3 potential markets using data tools
- Analyze local STR regulations in target markets
- Get pre-approved with 2-3 STR-friendly lenders
- Connect with an STR-specialized real estate agent
- Create a property scoring criteria for evaluations
Phase 2: Due Diligence & Acquisition (Days 31-60)
With your groundwork laid, it's time to find and secure your property. This phase requires careful analysis and quick action when the right opportunity appears.
Property Search Strategy
Work with your agent to identify properties that match your criteria. Look for:
- Location within the market: Proximity to attractions, walkability, views
- Property features: Hot tubs, pools, and outdoor spaces command premium rates
- Bedroom count: More bedrooms = higher revenue potential, but also higher purchase price
- Unique characteristics: A-frames, cabins, and unique architecture book better
Revenue Verification
Never trust seller projections alone. Verify potential revenue through:
- Comparable listings analysis (look at actual bookings, not just listed prices)
- Request actual revenue history if it's an existing STR
- Cross-reference with AirDNA or similar data sources
- Talk to local property managers about realistic expectations
Always verify that STR permits are available and what the application process looks like before making an offer. Some areas have permit caps or lengthy approval processes.
STR-Specific Inspection Items
Beyond a standard home inspection, have your inspector check:
- Hot tub and pool equipment condition and safety compliance
- Fire safety (smoke detectors, extinguishers, escape routes)
- Internet infrastructure (can it support streaming for multiple devices?)
- HVAC capacity for high turnover
- Parking adequacy for guest vehicles
Phase 2 Checklist
- Tour at least 5-10 properties before making offers
- Run detailed revenue projections for top candidates
- Verify STR permit availability and requirements
- Check HOA rules regarding short-term rentals
- Complete STR-focused property inspection
- Negotiate purchase price based on realistic projections
- Close on the property
Phase 3: Setup & Preparation (Days 61-75)
You own the property - now it's time to transform it into a guest-ready rental. This phase involves business setup, furnishing, and systems implementation.
Business & Legal Setup
Protect yourself and establish your business properly:
- Form an LLC: Provides liability protection and potential tax benefits
- Get STR insurance: Standard homeowner's policies don't cover commercial use. Companies like Proper, CBIZ, or Safely specialize in STR coverage.
- Apply for permits/licenses: Start this immediately as it can take weeks
- Set up business banking: Keep STR finances separate from personal
- Register for local taxes: Many areas require occupancy tax collection
Furnishing Strategy
Your furnishing approach should match your market and price point:
| Category | Budget Option | Mid-Range | Luxury |
|---|---|---|---|
| Living Room | $2,000-3,500 | $4,000-7,000 | $8,000-15,000+ |
| Per Bedroom | $1,500-2,500 | $3,000-5,000 | $6,000-10,000+ |
| Kitchen Essentials | $500-1,000 | $1,000-2,000 | $2,500-5,000+ |
| Outdoor/Patio | $500-1,500 | $2,000-4,000 | $5,000-10,000+ |
Invest heavily in mattresses and bedding - sleep quality is the #1 factor in guest reviews. Budget mattresses lead to bad reviews and lower occupancy.
Technology Setup
Essential tech for smooth operations:
- Smart locks: Enable keyless entry and remote access (August, Schlage, Yale)
- Noise monitors: Detect parties without invading privacy (Minut, NoiseAware)
- Smart thermostat: Manage energy costs remotely (Nest, Ecobee)
- Security cameras: Exterior only for liability protection
- High-speed internet: Minimum 100 Mbps for good streaming
Phase 3 Checklist
- Form LLC and set up business banking
- Purchase STR-specific insurance policy
- Submit permit/license applications
- Purchase and install furniture
- Stock kitchen, bathrooms, and consumables
- Install smart locks, thermostat, and noise monitors
- Set up high-speed internet
- Hire and vet cleaning team
- Create house manual and welcome guide
Phase 4: Launch & Optimize (Days 76-90)
Your property is ready - now it's time to get it live and start generating bookings. The first few weeks of operation are critical for building momentum.
Professional Photography
This is not the place to cut corners. Professional photos are the single biggest factor in booking conversion. Budget $300-600 for a professional STR photographer who understands:
- Wide-angle shots that showcase space
- Proper lighting and staging
- Hero shots of unique features
- Lifestyle imagery that helps guests envision their stay
Listing Optimization
Craft your listing with intention:
- Title: Lead with your best feature (view, location, amenity)
- Description: Paint a picture of the guest experience, not just features
- Amenities: List everything - guests filter by specific items
- House rules: Be clear but not restrictive
Launch Pricing Strategy
For new listings without reviews, consider this approach:
- First 3-5 bookings: Price 20-30% below market to generate reviews quickly
- After 5 reviews: Raise to 10-15% below market
- After 10+ reviews with 4.8+ rating: Price at or above market
Send a friendly check-in message 24 hours after arrival asking if everything is perfect. This catches issues before they become bad reviews and shows you care about guest experience.
Phase 4 Checklist
- Schedule professional photography session
- Write and optimize listing copy
- Set up listings on Airbnb, VRBO, and direct booking site
- Configure pricing tool (PriceLabs, Wheelhouse, etc.)
- Set up automated messaging sequences
- Do a test stay (yourself or friends/family)
- Go live and accept first booking!
- Request review after first successful stay
Startup Cost Breakdown
Here's a realistic breakdown of what to budget beyond your purchase price:
| Expense Category | Budget Range | Notes |
|---|---|---|
| Closing Costs | 2-5% of purchase price | Varies by location and loan type |
| Furnishing (3BR) | $15,000-40,000 | Depends on quality level and what's included |
| Technology Setup | $1,000-2,500 | Locks, thermostat, noise monitor, cameras |
| Photography | $300-600 | Don't skip this - critical for bookings |
| Business Setup | $500-1,500 | LLC, permits, licenses, insurance |
| Initial Supplies | $500-1,000 | Linens, towels, kitchen items, toiletries |
| Emergency Reserve | $5,000-10,000 | 3-6 months of mortgage/expenses |
| Total Additional | $23,000-56,000 | On top of down payment |
Your Next Steps
You now have a complete roadmap from zero to your first booking. Here's how to put it into action:
- Download this checklist and customize the timeline based on your situation
- Start market research today - even 30 minutes of data analysis moves you forward
- Connect with an STR-specialized agent who knows your target market inside and out
- Join STR investor communities to learn from others' experiences
The best time to start was yesterday. The second best time is today. Your first STR is waiting - go find it.