STR Glossary
Essential short-term rental terms and definitions
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A
Annual Night Cap
A regulation limiting the total number of nights per year a property can be rented short-term. Common caps are 90, 120, or 180 nights. Designed to encourage long-term housing while allowing occasional STRs.
Accessory Dwelling Unit
A secondary housing unit on a single-family lot, such as a garage apartment, basement suite, or backyard cottage (ADU). Often allowed for STRs when the primary residence is owner-occupied. Also called in-law unit or granny flat.
B
Booking Window
The advance time period when guests can book a property. Strategic hosts optimize their booking window based on property type: urban properties (3-6 months), vacation homes (9-12 months), last-minute deals (0-14 days).
Business License
A general permit required by some cities to operate any commercial activity, including short-term rentals. Separate from STR-specific permits. Annual fees range from $50-$500. Required for tax reporting and legal operation.
C
Cap System
A regulatory limit on the total number of short-term rental permits issued in a jurisdiction. Cities use caps (e.g., 1% of housing units) to control STR growth and maintain long-term housing supply. Waitlists are common in capped markets.
Commercial Host
A host managing multiple properties or not residing in the rental unit. Subject to stricter regulations than owner-occupied STRs in many cities. May require business licenses, commercial insurance, and higher taxes.
Co-hosting
A partnership where one person manages a property on behalf of the owner, handling guest communication, bookings, cleaning, and maintenance. Co-hosts typically earn 10-25% of revenue. Useful for absentee owners or those lacking time.
G
Ghost Guest
A guest who books under one name but allows unauthorized additional guests to stay. Violates house rules and insurance policies. Prevented through guest verification, security deposits, and occupancy monitoring systems.
Guest Screening
The process of evaluating potential guests before accepting bookings. Includes reviewing profiles, past reviews, ID verification, and communication assessment. Reduces property damage risk by 60% and prevents party bookings.
O
Occupancy Tax
A tax levied by local governments on short-term lodging accommodations, typically collected from guests and remitted by hosts. Also known as hotel tax, lodging tax, or transient occupancy tax (TOT). Rates vary by jurisdiction, ranging from 3% to 18% of the nightly rate.
Occupancy Rate
The percentage of available nights that a property is booked over a given period. Calculated as (booked nights / available nights) × 100. Industry average is 48-65% depending on market and property type. Key metric for revenue optimization.
Owner-Occupied Unit
A property where the owner lives full-time and rents out rooms or the entire unit when away. Receives preferential treatment in many STR regulations with fewer restrictions and lower fees compared to non-owner-occupied properties.
P
Primary Residence Requirement
A regulation requiring hosts to only rent out their primary dwelling where they live for at least 6-9 months per year. Designed to prevent investor-owned properties from dominating the rental market. Enforcement includes residency verification and utility bill checks.
Professional Host
A host earning significant income from multiple properties or full-time STR management. Typically manages 3+ properties, uses dynamic pricing tools, outsources cleaning, and maintains 90%+ occupancy rates. Average annual revenue: $75,000-$200,000.
R
Registration Number
A unique identifier issued by local governments to legally operating short-term rentals. Must be displayed prominently on all listing platforms. Enables enforcement and tax collection. Fines for operating without registration range from $500-$5,000 per violation.
RevPAR
Revenue Per Available Room - a key performance metric calculated as (total revenue / total available nights) or (average nightly rate × occupancy rate). Industry benchmark is $75-$150 depending on market. Used to compare property performance.
Restriction Zone
Geographic areas where short-term rentals are prohibited or heavily restricted by zoning laws. Common in historic districts, residential neighborhoods, and near schools. Violations result in cease-and-desist orders and fines.
S
Short-Term Rental Permit
Official authorization from local government to operate a short-term rental property. Application typically requires proof of ownership, zoning compliance, safety inspections, insurance, and tax registration. Annual renewal fees range from $50-$1,500.
Smart Pricing
An automated pricing algorithm used by platforms like Airbnb that adjusts nightly rates based on market demand, competitor pricing, and booking patterns. Hosts using smart pricing see 10-25% revenue increase but should set minimum price floors.
Superhost
An Airbnb status achieved by maintaining a 4.8+ rating, 90%+ response rate, <1% cancellation rate, and 10+ stays per year. Superhosts earn 20-30% more revenue through increased visibility, badge credibility, and priority support.
Safety Inspection
A mandatory evaluation by local fire or building departments to verify STR compliance with safety codes. Checks smoke detectors, carbon monoxide alarms, fire extinguishers, egress routes, and electrical systems. Required for permit approval.
Seasonality
Predictable fluctuations in demand throughout the year based on weather, holidays, and local events. Hosts adjust pricing (50-200% variation), minimum stays, and marketing strategies by season. Peak season rates average 2-3x off-season.
T
Transient Occupancy Tax
A tax on short-term lodging stays (typically under 30 days) imposed by local governments. Rates range from 3-18% and must be collected from guests and remitted monthly or quarterly. Also called TOT, hotel tax, or occupancy tax.
Turnover Cost
The total expense of preparing a property between guest stays, including cleaning ($80-$200), laundry, restocking supplies, inspection, and maintenance. Averages 15-25% of booking revenue. Minimized through longer minimum stays.