Lease a unit long-term ($2K/mo), furnish, list as STR for $5K/mo — no property purchase required.
STR Arbitrage: sign a 12–24 month lease with landlord's written permission to sublet as STR, furnish (target $5K–$15K), operate on Airbnb/VRBO/Furnished Finder. Typical spread: 2–3× base rent gross, 1.5–2× net. Zero-down business model — no mortgage, no property tax, no cap ex. Risks: (1) landlord revokes permission, (2) HOA/city STR restrictions change, (3) demand seasonality. Furnishings §179-deductible; property doesn't depreciate (you don't own it). Fastest way to $200K/yr STR income with minimal capital.
Click Generate advisory deep dive for mechanics, IRC citations, a step-by-step execution plan, a worked numeric example on your profile, costs, risks, and this-week actions.
Short-Term Rentals (avg stay ≤7 days) are NOT rental activities under §469 — material participation alone unlocks non-passive losses.
Cost seg study reclassifies 20–35% of STR building basis to 5/7/15-yr property — 60% bonus (2024) = massive year-1 loss.
The Augusta Rule: rent your primary residence to your own business up to 14 days/yr at market rate — 100% deductible to biz, tax-free to you.
Keep personal use under 14 days OR 10% of rental days to preserve STR loss deductibility; over triggers vacation-home rules.
STRs providing hotel-like services (daily cleaning, meals, transport) move to Schedule C — SE tax + QBI eligible.
Airbnb/VRBO often collect + remit TOT for you — exclude from gross rental income; save on state income tax base.
Combine §280A(g) 14-day rental + STR cost seg + material participation for cascade of tax benefits on same property.
Exchange appreciated LTR into an STR — defer cap gains, immediately unlock STR loophole + cost seg on new basis.