3 Reasons to Buy a Short-Term Rental in Fall 2025

Markets don’t give you a heads-up. You either see the opening or you read about it a year later, kicking yourself. Right now, in Fall 2025, we’re looking at one of those openings.

I’ve been brokering and operating STRs for over 15 years. I’ve seen frothy seller’s markets and I’ve seen downturns. What we have right now is different. It’s a rare convergence of three distinct forces, creating a strategic window for acquisition that I don’t expect to last long.

If you’ve been on the sidelines, it’s time to pay attention.

1. The Market Tilted: You Finally Have Leverage

Let’s cut to the chase: it’s a buyer’s market. The frenzy of 2021-2022 is over. Sellers who thought they could name any price are getting a reality check.

Look at a hot market like Austin, Texas. The data doesn’t lie:

• Inventory is Up: Active listings in the Austin metro are up over 18%. More choice means less competition.

• Homes Sit Longer: The average Days on Market has jumped to 78. Bidding wars are a distant memory.

• Prices Are Correcting: Nearly half (44%) of Austin homes for sale have had a price cut. The average home now sells for more than 3% below its list price.

What does this mean for you? Negotiating power. You can make offers below ask. You can request seller concessions for closing costs or rate buydowns. You have the time to do proper due diligence without someone breathing down your neck. The leverage has shifted back to the buyer for the first time in years.

This isn’t just a blanket discount, either. The market is fragmented. I see some neighborhoods in Austin where prices are down 37%, while others are up 60%. A data-driven investor can find incredible deals that the headlines miss.

2. The Demand Floor is Rock Solid

A good deal on a house is worthless if you can’t get heads in beds. While you hear noise about international travel slowing down due to new visa fees, that’s not the whole story.

First, domestic travel is booming. Americans are still booking trips, spending over $1 trillion on leisure travel this year. That’s your reliable revenue base.

Second, the international slowdown is policy-driven, not desire-driven. This creates a powerful upside. You can underwrite a deal based on today’s solid domestic numbers. When those travel policies eventually change and international visitors return in force, that’s all pure profit potential you didn’t have to pay for.

And most importantly, location matters. A premier destination like Austin isn’t just surviving; it’s thriving. It was just named a Top 5 summer travel destination by WalletHub. The demand here is strong enough to insulate you from broader national dips. You’re buying into a market with a proven, growing stream of visitors.

3. The Game-Changer: 100% Bonus Depreciation is Back

This is the financial accelerator. And most investors don’t even know it’s happened yet.

The “One Big Beautiful Bill Act” passed in July 2025 quietly reinstated 100% bonus depreciation for this year. This is a massive tax advantage that had been phasing out.

Here’s how it works in plain English:

1. You buy an STR property.

2. You conduct a cost segregation study, which identifies parts of the property (like flooring, fixtures, and landscaping) that can be depreciated faster than the building itself.

3. You furnish the property.

Normally, you’d deduct these costs over 5, 15, or 27.5 years. With 100% bonus depreciation, you can deduct the entire cost of all those furnishings and re-classified assets in the first year.

Let’s make it real. Say you buy a $500k house and spend $30k on furniture. A cost seg study identifies another $120k in assets eligible for bonus depreciation.

• Total Year-One Deduction: $150,000

• Tax Savings (at 35% bracket): $52,500

This isn’t just a paper loss. If you “materially participate” in managing your STR, that $150k loss can offset your W-2 or other business income, generating a huge tax refund.

Look at the impact on your cash-on-cash return for a $100k down payment:

• Without Bonus Depreciation: A respectable 27% return.

• With Bonus Depreciation: An incredible 126% return.

The tax savings act as an immediate rebate on your down payment. This tax law change is so new that it’s not priced into the market yet. That’s your arbitrage opportunity. Act before everyone else figures it out.

Your Playbook: How to Execute in 2025

Recognizing the opportunity is one thing; capturing it is another. Success requires a professional approach.

• Embrace Regulation: In markets like Austin, regulators are cracking down on unlicensed STRs. Good. Let them. For professional operators who get licensed and follow the rules, this is a gift. It wipes out your amateur competition, constrains supply, and gives you more pricing power. Compliance is your competitive moat.

• Buy Unique: The modern traveler wants an experience, not just a room. They’ll pay a premium for an A-frame cabin, a themed house, or a property with a killer game room. Stop looking for cookie-cutter houses and start looking for properties you can turn into a destination.

• Operate with Data: Use performance data to identify which neighborhoods and property types are actually profitable before you buy. Use dynamic pricing tools to maximize revenue. The days of “set it and forget it” hosting are over.

This convergence of a buyer’s market, resilient demand, and a monster tax incentive is rare. The window is open now. Don’t wait until it’s a story everyone is telling.