Short-Term Rental vs Long-Term Rental in Phoenix: Which Earns More?

It's the central question for Phoenix investment property owners: should you put your home on Airbnb or find a long-term tenant? The answer depends on your goals, your property, and how much involvement you want. Here's a clear comparison of both strategies in today's Phoenix market.

Income Potential: The Numbers in Phoenix

In 2026, a well-positioned short-term rental in Phoenix generates a median annual revenue of approximately $45,000, with top-performing properties — particularly those with pools, outdoor entertaining areas, and locations near Scottsdale — reaching $70,000–$90,000+.

A comparable long-term rental in Phoenix currently commands median rents of $1,800–$2,400/month, or $21,600–$28,800/year. That's 40–65% less gross income than a performing STR, before accounting for vacancy.

The income advantage for STRs is real, but it comes with more work and more variability.

Occupancy and Seasonality in Phoenix

Phoenix STRs average approximately 66% annual occupancy, which means roughly 240 booked nights per year. That occupancy is not evenly distributed. Phoenix has three distinct revenue seasons:

• Peak season (November–April): winter visitors, Spring Training, major events — occupancy can exceed 85%, ADRs spike significantly

• Shoulder season (May, October): moderate demand, rates normalize

• Slow season (June–September): extreme heat reduces leisure travel, occupancy can drop to 40–55%
  

Long-term rentals, by contrast, offer consistent monthly income with minimal seasonality risk. If your priority is predictability, LTR has a structural advantage.

Work and Time Involved

Long-term rental: once a tenant is placed, day-to-day involvement is minimal. You're responding to occasional maintenance requests and conducting annual lease renewals. Most owners manage this in under 2 hours per month.

Short-term rental: active management requires 5–10 hours per week for a single property — guest communication, turnover coordination, pricing adjustments, review management. Professional management eliminates this entirely but comes at a cost of 18–25% of revenue.

Regulations and Compliance

Long-term rentals in Phoenix are subject to standard Arizona landlord-tenant law. Compliance requirements are minimal.

Short-term rentals require an active permit ($250/year), $500,000 liability insurance, neighbor notification, emergency contact, and ongoing tax obligations. Compliance is manageable but requires attention and annual renewal.

Risk Comparison

STR risks: seasonality, platform policy changes, guest damage, local regulation changes. These are real but manageable with good systems and insurance.

LTR risks: difficult tenants, eviction costs and timelines, property damage not covered by security deposits, market rent fluctuations.

Neither model is risk-free. The right risk profile depends on your financial situation and tolerance for operational involvement.

Which Should You Choose in Phoenix?

Short-term rental makes the most sense for properties near Scottsdale, Old Town, Tempe, or established tourist corridors — particularly homes with private pools, outdoor amenities, and 3+ bedrooms. Properties with these characteristics can reliably outperform long-term rental by 50–100%.

Long-term rental makes sense for properties in suburban corridors without strong STR amenities, or for owners who want truly passive income without operational involvement.

The best Phoenix investors often start with STR to maximize early returns, then evaluate LTR as the portfolio matures.

Ready to hand off the hard work? Urbanwood Management offers full-service short-term rental management in Phoenix, AZ. Book a free call at urbanwoodmanagement.com.