Short-Term Rental

A short-term rental is a furnished property rented by the night or week, usually through a booking platform. Its gross revenue can be much higher than a long-term lease on the same home. That makes gross rent multipliers built on short-term revenue look low, often misleadingly.

A short-term rental carries costs a long-term rental does not: furnishing, cleaning, platform fees, utilities, supplies, and more management time. Revenue also moves with seasons and occupancy. A GRM on short-term gross revenue compares a different kind of income to the long-term rent in ordinary comps.

Local rules add risk. Many cities limit or ban short-term rentals, and a rule change can drop a property to long-term rent overnight. A safer screen is to calculate the GRM on long-term market rent. If the property only works as a short-term rental, it depends on both the market and the rules staying the same.

Further reading: Short-Term Rental on Wikipedia.