The State of Short-Term Rentals in 2025: Where to Buy, How to Win, and What’s Next

In this week’s episode of the Tax Smart REI Podcast, hosts Thomas Castelli and Ryan Carriere sit down with Taylor Jones (aka @MrJonesSTRs), co-founder of STR Search, to dig deep into what’s driving success in the short-term rental market in 2025. Taylor, who has helped investors acquire more than 256 profitable STRs, believes that success in this asset class boils down to one simple principle: the numbers don’t lie. If you focus on markets with enduring demand and make unemotional, data-backed decisions, the results will follow.

Understanding Demand: Why Market Selection Is Everything

Taylor emphasizes that short-term rentals are a hyper-local game. Some markets are booming, others are stagnant, and some are showing signs of decline. The key to navigating these differences is understanding where demand is real and sustainable.

Markets within a two-hour drive of major metropolitan areas continue to perform well because travelers consistently seek quick getaways. Similarly, areas anchored by natural attractions like national parks offer reliable, built-in demand that isn’t going away. On the other hand, single-node markets, like those that rely entirely on theme parks or one major attraction, carry a higher risk. If attendance drops or ticket prices spike, as seen in the Orlando area, occupancy and revenue can quickly follow suit.

Winning Strategies: Why Amenities and Design Are the 2025 Edge

In 2025, simply having a property in a great location is no longer enough. Taylor explains that design and amenities are the differentiators that push properties into the top-performing tier.

Features like pickleball courts, hot tubs, and high-quality pools can add tens of thousands of dollars in annual revenue. Even the classic “location advantage” is more nuanced than many investors think.

For example, in coastal Florida, whether a property is five or fifteen minutes from the beach often has little impact on revenue. What matters more is the guest experience. A larger property with room for family-friendly amenities will often outperform a closer property with limited space, while also costing less upfront and carrying a lower debt load.

ROI Beyond Taxes: Choosing the Right Lever to Pull

While many investors enter the STR space for its powerful tax advantages, Taylor cautions that ROI is more than just depreciation. He breaks it down into four components: tax savings, cash flow, principal paydown, and appreciation. The right investment balances these factors according to your goals.

For instance, South Florida offers strong appreciation and cash flow thanks to year-round demand, but is less tax-efficient due to high land values. Rural Vermont, by contrast, offers significant depreciation benefits but limited appreciation and seasonal demand. Investors must decide whether they’re looking for monthly income, long-term wealth building, or a mix of both, and tailor their strategies accordingly.

Timeline to Launch: From Offer to Airbnb Live

A common question Taylor hears is how long it takes to get an STR up and running. With a professional firm like STR Search, the average investor goes under contract within 32 days and closes in about four and a half weeks. From there, the launch timeline depends on the property type.

A fully furnished, turnkey property can go live quickly, though it often comes with a premium price tag. A property that requires furnishing or upgrades usually needs eight to eighteen weeks for sourcing furniture, making improvements, and professional staging. Taylor advises against trying to “time” the market or launch perfectly with peak season. Instead, focus on acquiring the right asset and let organic growth, such as accumulating positive reviews and improving your listing’s SEO, set you up for stronger performance in future seasons.

Macro Trends: The Race to Accumulate A-Level Properties

Looking at the bigger picture, Taylor believes we’re in the second or third inning of the STR asset class. The market is rapidly professionalizing as more experienced operators add second, third, and fourth properties to their portfolios. Institutional investors, meanwhile, remain mostly on the sidelines because STRs don’t scale the same way as multifamily or self-storage.
This creates a window of opportunity for individual investors. The best “A-level” properties, those in high-demand markets with strong revenue potential, will become scarcer and more competitive over time.

As yields compress, the investors who acted early will be positioned for the best returns.

Year-End Strategy: A Smart Play for 2025 Tax Planning

For those eyeing 2025 tax savings, Taylor recommends a strategic approach: purchase a furnished “B-level” property now, price it appropriately, and take advantage of bonus depreciation this year.

Then, in the first quarter of next year, renovate and rebrand the property with new amenities and professional photos to relaunch as an “A-level” asset.

This two-phase approach allows investors to capture both the immediate tax benefits and the long-term revenue upside. And if reviews are a concern, you can relist the property after upgrades, effectively starting fresh with a stronger offering.

How STR Search Helps Investors Win

Taylor and his team at STR Search specialize in guiding investors through every stage of the short-term rental process. Their data-driven approach covers market selection, underwriting, design and amenity strategy, and operational optimization. They help clients avoid costly mistakes like buying properties that only make sense on paper for tax reasons but fail to deliver meaningful cash flow or long-term returns.

Investors can learn more about STR Search, browse educational resources, and schedule consultations at strsearch.com. For those ready to scale into the STR space, partnering with an experienced data team can make the difference between owning a profitable investment and managing an underperforming asset.

Final Thoughts: STRs as a Long-Term Investment Strategy

Short-term rentals remain one of the most powerful tools for building wealth, generating cash flow, and reducing tax liability. But as Taylor points out, it’s no longer a “set it and forget it” business. The market is maturing, competition is growing, and execution matters more than ever.

By focusing on data, choosing high-demand markets, designing properties with guests in mind, and building systems that scale, investors can not only benefit from the tax advantages but also build a portfolio of high-performing assets that grow in value over time.

Book a free discovery call with our team.

Disclaimer: This podcast summary was generated from the transcript and may contain some errors or miss key points from the audio recording.