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- Nicole Shirvani is a full-time doctor and part-time real estate investor.She added short-term rentals to her portfolio for diversification and tax benefits.Before buying a short-term rental, she asks a few questions about the location and Airbnb rules.
Nicole Shirvani owns a combination of long- and short-term rentals, and is currently renovating a triplex that she plans to turn into a mid-term rental.
There are pros and cons that come with each type of rental.
Short-term rentals typically cash flow more, "but you do have more involvement," Shirvani, a full-time psychologist who invests in real estate on the side, told Business Insider. "There are guests coming in and out, so there are just so many different logistics."
With mid- and long-term rentals, "once you find an appropriate tenant and the place is doing well and the maintenance is all done, you don't really get involved as much, but the rental income is generally going to be lower," she added.
Shirvani, who manages three vacation rentals — one in Florida, where she resides, and two in the Shenandoah Valley in Virginia — added short-term rentals to her portfolio for various reasons: diversification, tax benefits, and her own personal interest in design.
"There are some very legitimate tax benefits that you could take, and so I wanted to be able to take advantage of that," she said, referring to the short-term rental tax "loophole" that allows investors to use property-related losses to offset their taxable income. "And, I just enjoy design and being a little more hands-on. I like to create those nice spaces for people and families to stay at."
The vacation rentals have also provided an additional income stream, allowing her to boost her nest egg and save for her daughter's future. Since January 2024, Shirvani's short-term rentals have brought in six figures, according to her Guesty dashboard.
She asks herself various questions before investing in any short-term rental property.
Courtesy of Nicole Shirvani
1. What's nearby?
First and foremost, Shirvani follows the age-old real estate rule of "location, location, location."
"I'm looking at what's near there that people are attracted to," she said. "Is there a National Park that a lot of people love to go hiking in? Is it near major cities where you can get in the car, be at my place in two or three hours, and get out of the busy city for a quick weekend trip?"
For example, her two properties in the Shenandoah Valley are less than three hours by car from DC. One is located on the river, while the other is nestled in the woods in a ski resort area, making them excellent getaway spots for city dwellers.
2. Would I enjoy staying here?
Next, she asks if the location appeals to her. If not, she'll likely pass.
With her Virginia properties, "I thought of areas that I would also enjoy staying at, and what appeals to me," she said.
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Investing out of state isn't necessarily complicated, she added: "A lot of people find it nerve-racking — the uncertainty, not having potentially seen the property yourself and not being familiar with the area. And what I say to that is, the more research you do, the more you familiarize yourself with the area, the more comfort you will feel."
3. What are the short-term rental rules?
This one may seem obvious, but it's necessary to ask, "Is the area open to short-term rentals? Are there any rules against them?" she said, noting that short-term rental rules can vary significantly by region.
To succeed on Airbnb, "you definitely have to know your market," said Shirvani. "You have to know what demands are there and what people need; you want a place that's beautifully designed; and you want to have a strong team on the ground in case there are any issues or concerns, so you are able to address them right away, because with a short-term rental, you're really in hospitality. You have to have that mindset and be willing to go the extra mile."
