You've probably noticed them in your neighborhood—those houses with a rotating cast of guests wheeling suitcases up the driveway every few days. Short-term rentals have become part of the landscape in communities across the country, and whether you love them or hate them, they're reshaping how we think about residential real estate.
If you're planning to buy or sell a home, understanding how platforms like Airbnb and VRBO affect property values and neighborhood dynamics isn't just interesting—it's essential information that could influence your decision-making process.
The Upside: When Short-Term Rentals Boost Property Appeal
Let's start with the good news. In many markets, the presence of short-term rentals can actually increase property values. Why? Because some buyers see opportunity where others see disruption.
Investment-minded buyers often seek out neighborhoods where short-term rentals are permitted and thriving. They're not just buying a home—they're buying a potential income stream. In popular vacation destinations or cities with strong tourism, a property that can legally operate as a short-term rental often commands a premium price compared to similar homes in areas where such rentals are restricted.
This income potential matters even if you're not planning to run a rental yourself. When properties in your area can generate substantial nightly rates, it elevates the perceived value of the entire neighborhood. Buyers doing their homework will factor in that flexibility, knowing they could pivot to short-term renting if their circumstances change.
Beyond the direct financial angle, short-term rentals can contribute to neighborhood vitality in unexpected ways. Property owners who rent out their homes short-term tend to maintain them meticulously—fresh paint, landscaping, updated interiors. After all, online reviews and star ratings depend on it.
This ongoing maintenance can raise the aesthetic bar for the whole street.
The Downside: When Vacation Rentals Become a Neighborhood Issue
Now for the reality check. Short-term rentals can also create genuine friction in residential communities, and those tensions absolutely affect home values and marketability.
The most common complaint? The loss of neighborhood character. When homes become revolving doors for tourists, you lose the consistency that makes a neighborhood feel stable. Your next-door neighbors might be different every weekend. That sense of community—knowing who lives on your street, watching out for each other's kids, maintaining shared standards—can erode when properties function more like hotels than homes. Safety can become a real issue when strangers come and go regularly in a neighborhood.
Noise and parking often become flashpoints. A group renting a house for a bachelor party or family reunion doesn't have the same investment in being good neighbors as permanent residents. Late-night gatherings, unfamiliar cars lining the street, and increased foot traffic can genuinely diminish the quality of life for the people who actually live there year-round.
These concerns aren't just about comfort—they translate into real dollars when you're selling. Some buyers will actively avoid neighborhoods with high concentrations of short-term rentals, worried about unpredictability and potential nuisances. If your home is sandwiched between two active Airbnbs, you might face a smaller pool of interested buyers or need to adjust your price expectations accordingly.
There's also the supply-and-demand factor. In some markets, the conversion of residential properties into de facto commercial rentals has reduced the inventory of homes available for traditional buyers. Fewer homes on the market can drive up prices, which sounds great if you're selling—until you realize you're also buying in that same expensive market.
The Regulatory Wild Card
Here's where things get complicated: the rules governing short-term rentals vary wildly from one city to the next, and they're constantly changing.
Some municipalities have embraced short-term rentals with minimal restrictions. Others have implemented strict regulations—limiting rental days per year, requiring special licenses, or banning them entirely in certain residential zones. A few cities have created two-tiered systems where owner-occupied short-term rentals are allowed, but non-owner-occupied ones aren't.
This regulatory uncertainty affects property values because buyers need to factor in risk. A home that's worth a premium today because of its short-term rental income could lose that advantage overnight if local laws change. Smart buyers and their agents are digging into current regulations and tracking proposed changes before making offers.
Mike Oddo, CEO of HouseJet, puts it this way: "Short-term rentals are likely here to stay in some form, and both home sellers and buyers will have to navigate the positive and negative impacts of having them in your neighborhood. The key is going into the transaction with your eyes wide open—understanding not just what the current situation is, but what it could become based on local sentiment and regulations."
How to Research Short-Term Rentals Before You Buy or Sell
Whether you're putting your home on the market or shopping for a new one, you need accurate information about short-term rental activity in the neighborhood. Here's how to get it:
Start with the platforms themselves. Search your target address or neighborhood on Airbnb and VRBO. You'll see exactly which properties are listed, how often they're booked, and what they're charging. This gives you a ground-level view of the competition (if you're selling a potential rental property) or the reality of living there (if you're buying).
Local government websites are your next stop. Most cities that regulate short-term rentals maintain registries of permitted properties. These databases tell you which homes are legally operating as rentals and whether there are caps on how many permits are issued in specific areas.
Your real estate agent should be pulling this information as part of their comparative market analysis. At HouseJet, we advise our agent partners to dig into short-term rental concentrations when evaluating neighborhoods because it affects both marketability and pricing strategy. A good agent can show you maps of where rentals cluster, help you understand local regulations, and explain how this might impact your specific situation—whether you're the one buying or selling.
Don't forget to check for pending legislation. Attend a city council meeting or review meeting minutes online. Neighborhoods that are currently rental-friendly might be moving toward restrictions, while others might be loosening rules. That trajectory matters as much as the current status.
The Bottom Line for Buyers and Sellers
Short-term rentals aren't inherently good or bad for property values—it depends entirely on context. The same Airbnb that represents passive income potential to one buyer represents a weekend noise problem to another.
If you're selling in a neighborhood with short-term rentals, be ready to position your property accordingly. Highlight the income potential if regulations are favorable, or emphasize the traditional neighborhood appeal if buyers seem concerned about rental activity. Know your audience and adjust your marketing message.
If you're buying, do the homework before you fall in love with a house. Understanding the short-term rental landscape isn't paranoid—it's practical. You're making one of the biggest financial decisions of your life. You deserve to know exactly what kind of neighborhood you're moving into.
The vacation rental phenomenon has permanently altered the residential real estate landscape. The winners in this new reality are the buyers and sellers who take the time to understand how these platforms are reshaping their specific market—and work with professionals who can help them navigate accordingly.
