Are Short-Term Rentals Still Profitable? Numbers to Run First

The question: why are short-term rentals underperforming?

Short-term rentals (STRs) are underperforming for many investors because the easy conditions that made them look like "passive income" have faded. Travel has spread back out across the country, hotels compete on price, platform rules are tightening, and in markets such as Southwest Florida, supply grew faster than demand.

Ben Grieco, a Southwest Florida real estate agent who covers the market on YouTube, argues that a recent Airbnb policy change may start a second wave of host exits. Before you buy an STR, the numbers to run are conservative occupancy, all-in operating costs, platform fees, financing costs and, critically, what the property would earn or sell for if the short-term plan fails.

What Grieco says is happening

In a video published October 30, 2026, Grieco describes a boom-and-bust cycle that he says began in Southwest Florida and may now be going national. His account runs roughly like this:

• During and after the pandemic, short-term rentals through platforms such as VRBO and Airbnb helped fuel price growth. Many buyers were not relocating; they were investors chasing rental income.
• When travel opened up elsewhere, many hosts' income fell.
• Some tried to switch to annual leases, but the long-term rental market was crowded.
• Some then tried to sell, but many other investors were listing at the same time.
• Hurricanes added another layer of stress, in his telling, to a market already under pressure.

He says that in 2023 and 2024, roughly half of the homes he showed in some stretches were Airbnb-style properties whose owners wanted out, either because income had dropped or because they owed more than the home was worth. He does not expect that scale of distress to return, but he thinks owners who were barely breaking even may now decide to quit.

The Airbnb changes he points to

Grieco says Airbnb announced that, as of the end of November, hosts will no longer be able to require guests to perform certain chores or follow checkout checklists. He frames this as a response to guest frustration, particularly with hosts who asked guests to clean while also charging a cleaning fee. He also says Airbnb is increasing the share it takes from bookings.

Treat those specifics as the creator's reading of the announcement. We have not independently confirmed the exact wording, the effective date or the size of any fee change, so hosts should check Airbnb's official host communications and help center directly.

Why the squeeze matters even without a crash

A short-term rental is an operating business sitting inside a house. Small changes in revenue or cost can wipe out a thin margin. Three pressures stand out.

Demand leakage to hotels. Grieco says guests increasingly judge Airbnb stays against hotels, where pricing is "pretty comparable" in his experience and there are no chore lists. He also quotes a social media user who preferred a Hyatt stay, in part because the transaction felt professional. That is anecdote, not data, but it matches a broader point we covered in Living in a Hotel vs Renting: Is It Really Cheaper in 2026?: once cleaning fees, service fees and extra costs are added, the price gap with hotels can narrow.

Higher platform costs. If Airbnb takes a larger cut, hosts either absorb it or raise nightly rates. In a competitive market, raising rates can reduce bookings.

Fewer ways to offset labor. Restricting guest chores means more work and expense shifts back to the host or a cleaner. Turnover cleaning, laundry, restocking and supplies are real line items.

Why the "plan B" options are weak in oversupplied markets

Many STR underwriting models quietly assume that if short-term rental income disappoints, the owner can switch to a long-term lease or sell. Grieco argues that this safety net is thin in Southwest Florida right now.

• Annual rental: he says the area still has abundant rental inventory and apartment construction continues, which limits the rent an owner can ask.
• Sale: if many investors list at once, sellers compete with each other. He notes that last cycle was driven by heavy speculation, so a repeat is less likely, but even a modest increase in listings adds to supply.

He also says the region has had a better seasonal rental season than in the past four years, which may be why some owners held on. His concern is that a fee increase and rule change could be the push that ends the holding pattern.

Price context from the video

To show how far the local market has fallen, Grieco cites a Fox News report using Zillow data:

He adds that, in his experience, some areas were down about 30% at the worst point, and some condos were down 50% or more. He says the market topped out in Southwest Florida in July 2022 and has stabilized recently, with inventory dropping and prices flattening. His caution is that stabilization does not erase earlier losses. For more on the local picture, see Florida Home Prices Falling by County: Calhoun Now Leads Zillow's List and Florida New Construction Resale Losses: Why Owners Sell Below Cost.

The numbers to run before buying a short-term rental

The video is a market commentary rather than an underwriting guide, so what follows is general guidance, not advice tailored to your situation. Use your own local data, such as listings in the same neighborhood, and consider paying for a market analytics tool such as AirDNA or asking a local property manager for trailing results.

1. Realistic occupancy and nightly rate. Use trailing 12-month results for comparable homes, not the best month. Seasonal markets can look very different in peak and off-peak months.
2. Platform and payment fees. Subtract what the platforms actually take, and recheck after any announced change.
3. Cleaning and turnover costs. Include laundry, supplies, restocking and any gap between what guests pay for cleaning and what you pay.
4. Management. Even if you plan to self-manage, price your time or assume a manager's fee. "Passive" income often is not.
5. Furnishing and replacement. Furniture, linens, small appliances and wear and tear recur. Budget for a refresh cycle.
6. Insurance, taxes and utilities. Coastal and storm-exposed areas can carry high premiums, and short-term rentals can be taxed or licensed differently from long-term rentals. Check state and local rules and review IRS guidance on rental income.
7. Vacancy and repairs. Hold a reserve for slow months and unexpected repairs.
8. Financing cost. Debt service is often the largest fixed cost. Test your numbers at today's mortgage rate, not a hoped-for lower one. Freddie Mac's weekly Primary Mortgage Market Survey is a standard benchmark.
9. Exit tests. Compute cash flow as an annual rental and estimate a sale price net of selling costs. If the deal only works as an STR, you are carrying more risk.
10. Regulation risk. Cities, HOAs and condo associations can limit or ban short stays. Confirm that the rules allow your plan and are unlikely to change.

A useful discipline: if the property cannot at least cover its costs under a conservative scenario, treat any STR income as a bonus rather than the foundation of the purchase.

What this means for you

If you are a buyer or investor

• Do not rely on a seller's or marketing page's projected revenue. Ask for platform statements and tax returns where appropriate.
• Underwrite at lower occupancy than the best-performing comparable.
• Treat a property that is only viable at peak-season rates as high risk.
• If you want a home rather than a business, a distressed STR may offer negotiating room, but inspect carefully. Grieco notes that questions about condition belong with a licensed home inspector. Our guide How to Buy a Home Today: Rates, Closing Costs and Negotiation Tips covers the negotiation side.

If you are a host or owner

• Re-run your profit-and-loss statement against any change in platform fees and cleaning rules once the end-of-November changes take effect.
• Decide in advance what monthly loss, if any, you are willing to carry and for how long.
• Compare your net income from STR use against a realistic annual lease and a sale after costs. Do it before you are forced to choose.
• Talk to a tax professional about how the property is classified, since the treatment of short-term and long-term rental income can differ.

If you are a seller

• If your home is a former or current STR, expect buyers to value it on what a residential buyer or long-term investor would pay, not on peak STR revenue.
• Pricing realistically matters. In the video, Grieco shows a Port Charlotte listing that he says received an offer after nine days on the market at a $250,000 ask, and credits the pricing. That is a single example, not a trend, but it illustrates that well-priced homes can still move even in a soft market.

Limits and counterpoints

Grieco is clear that he is a local agent reporting what he sees, and his view is heavily Southwest Florida. Several caveats apply.

• Local is not national. He says this may be the start of a national selloff, but conditions in a storm-hit, oversupplied Florida market may not carry over to every area. Markets with limited housing supply or steady business travel can behave differently.
• Anecdotes are not data. The Hyatt comment and the commenters' mortgage stories are illustrations. The video does not provide national booking data, occupancy trends or Airbnb's actual fee schedule.
• Policy details are secondhand. The exact scope of the chore rule and the fee increase should be confirmed with Airbnb.
• Not everyone agrees on the market. Grieco notes that some commenters say this is the best time to buy and others say further declines are possible. He also notes that he is paid when homes sell and says he does not want to sway anyone either way. Readers should weigh any single commentator's view alongside several sources, including Realtor.com, Redfin, Zillow and local MLS data.
• Some owners will be fine. Well-located, well-managed properties bought at reasonable prices with moderate debt may still perform.

Affordability backdrop: why renting and owning both feel stretched

The video ends with a look at mortgage affordability. Grieco cites a social media post from a new buyer whose monthly mortgage payment is $2,743, with roughly $1,662 going to interest, and says the owner still pays less than rent. He also says a 15-year loan on a similar balance would run well over $3,500 a month, and that builders are advertising payments "as low as" $2,700.

He ties this to the "lock-in effect": owners with very low pandemic-era rates, such as a commenter who bought in 2018 with a $980 payment, have little incentive to move. For STR investors, the same dynamic means fewer homes come to market, which can support prices even as investor-owned properties soften. It also means anyone financing an investment property today faces much higher debt costs than those who bought earlier. Our earlier coverage of Why Home Prices Haven't Dropped: Stubborn Sellers Hold the Line explains that dynamic in more detail.

What to watch next

• Whether Airbnb's end-of-November rule changes take effect as described, and how hosts respond.
• Winter-season booking data in Southwest Florida and other vacation markets.
• Changes in for-sale and for-rent inventory in places with many investor-owned properties.
• Local rules and insurance costs, which can change returns quickly.
• The path of mortgage rates, which affects both purchase decisions and the ability of marginal owners to hold on.

The takeaway is not that every short-term rental fails. It is that a property which depends on perfect occupancy, low fees and cheap financing has little room for error, and that the fallback plans are only as strong as the local market allows.