Long-term rents jumped. Does your STR still beat a lease?

I've spent twelve years arguing that a well-run short-term rental beats a lease in this market. I still think that's true for some properties. I'm less sure it's true for most of them than I was two years ago, and the reason is that the thing we compare against got a lot better.

Long-term rents in Santa Clara County have moved sharply this year. If you set up your STR when a comparable unit leased for $2,900, you did that math against a number that no longer exists.

What the lease side pays now

RentCafe, using Yardi Matrix data, puts the average rent in the city of Santa Clara at $3,671 as of August 1, up 6.82% from $3,437 a year earlier. By unit size that's roughly $2,650 for a studio, $3,327 for a one-bedroom, $4,088 for a two-bedroom, and $4,382 for a three-bedroom.

Apartment List measures differently and gets a different number, which is worth saying out loud rather than picking whichever figure suits the argument. Their August analysis has Santa Clara up 8.3% year over year and San Jose up 6.5%, with San Francisco rising 3.2% in a single month and apartment vacancy around 2.4%. Oakland is up 15% and Mountain View 11%.

The two sources disagree on magnitude and agree on direction. Rents are climbing fast and vacancy is thin, which means a landlord listing a clean unit right now is not waiting long.

What the short-term side pays now

This is where I have to be careful, because the STR data is messier than people pretend.

AirROI's San Jose figures for the twelve months through July 2026 show an average daily rate of $203, occupancy of 40.7%, RevPAR of $83, and about 2,238 active listings. They also report average annual revenue of $20,495.

Those last two numbers don't reconcile cleanly. RevPAR of $83 across a full year implies something closer to $30,000, and the gap is presumably medians versus means and listings that were only active part of the year. I'm flagging it rather than quietly picking the flattering one, because this is exactly the sort of aggregate that gets quoted in STR marketing without anyone checking whether it hangs together.

The distribution matters more than the average anyway. In that same dataset, the top 10% of San Jose listings run 83% occupancy or better and the top quarter clear 67%. The median sits at 43%. The bottom quarter is at 21%.

That spread is the whole story. San Jose is not a market where an average listing does well. It's a market where good listings do well and everything else drifts.

The comparison most hosts run wrong

The mistake is comparing STR gross revenue against long-term gross rent. Those aren't the same kind of number and the gap between them is where the argument gets decided.

A two-bedroom leasing at $4,088 a month grosses about $49,000 a year. Your costs against that are management at maybe 6 to 8% if you use someone, a turnover every year or two, and ordinary maintenance. Call it low forty-thousands net in a normal year, with almost no time from you.

The same unit as a short-term rental has to clear that after cleaning, linens and consumables, utilities and internet you're now paying, furniture that wears out and gets replaced, a materially more expensive insurance policy, platform fees, San Jose's 10% transient occupancy tax, and either a cohost's cut or a real number of your own hours every week. I've broken down what cohosting costs and where the lift comes from separately, but the short version is that the all-in drag on an STR is nowhere near the drag on a lease.

Run a median-performing San Jose listing through that and it doesn't beat a $4,088 lease. It isn't close. Run a top-quartile listing at 67% occupancy and $203 a night through it and you're looking at roughly $50,000 gross before costs, which is a genuine competition. Run a top-decile listing and STR still wins comfortably.

So the honest answer to "does STR still beat a lease" is that it depends entirely on which of those listings you own, and most hosts have never established which one they are.

How to find out which one you are

Pull your own trailing twelve months. Not your best month, not your summer, the whole year.

Take your gross bookings, subtract every platform fee, the TOT if you remit it yourself, cleaning that you didn't fully pass through, supplies, the utility and internet bills you wouldn't have if a tenant paid them, your insurance premium delta over a landlord policy, and any management fee. Then subtract something honest for furniture replacement, because that sofa has a life and you're consuming it.

What's left is your real STR number. Put it next to twelve times the market rent for your unit, minus a month for turnover risk and minus management if you'd use it.

Then, and this is the part people skip, put a number on your own time. If you're self-managing, count the hours. At ten hours a month you're spending 120 hours a year on this. Decide what that's worth to you and subtract it, because a lease costs you almost none of it.

If your STR number wins by a wide margin, you have your answer and you should stop reading. If it wins by a little, you're being paid a thin premium for a lot of work and real variance. If it loses, you've learned something valuable and you should act on it before you spend another winter at 43% occupancy.

Where STR still clearly wins

I don't want this to read as a case against short-term rentals, because I run them and I still believe in them for the right property.

Location does it. Anything within a short drive of Levi's Stadium, the convention center, or a major campus draws event and business demand a lease can't monetize. Those properties see spikes a twelve-month tenant would never pay you for.

Property type does it. A unique or genuinely well-designed place outperforms its category by a wide margin on the platforms, in a way it simply doesn't in the long-term market, where a tenant is largely comparing square footage and commute.

And flexibility does it. If you use the place yourself part of the year, or you're holding it for a family member later, or you might sell into a strong spring market, a lease takes that optionality away and an STR doesn't. That's worth real money to some owners and nothing at all to others.

There's also the middle path I keep pointing people toward. A thirty-plus day furnished stay sits between the two, with less turnover than nightly and a meaningful premium over unfurnished, and it dodges some regulatory exposure. I wrote about the mid-term pivot when the driver was SB 346 rather than rent growth. The rent numbers make that case stronger now than they did in the spring, not weaker.

What I'd do this fall

Do the trailing-twelve exercise in the next two weeks, while your summer numbers are fresh and before you commit to another year of anything.

If you're staying short-term, then the work is getting out of the median and into the top quartile, which is a listing-quality and operations problem more than a pricing one. Start with fall pricing and your listing data.

If the math says lease it, note that you're deciding this at an unusually good moment to be a landlord. Sub-3% vacancy and 7% rent growth is not a normal year, and the same conditions making your STR comparison look worse are making the alternative look better.

I'd rather a host make that call with a spreadsheet in front of them than out of loyalty to a decision they made in 2022 under completely different numbers.

Not sure which tier your listing is in? Get a free rental analysis and I'll run your trailing twelve against current lease comps for your specific unit, and tell you honestly which way it points. Or call me at (408) 813-8001.

Sources

• San Jose, California Airbnb Data 2026 — AirROI
• Average Rent in Santa Clara, CA — RentCafe, using Yardi Matrix data
• San Francisco's Rental Market Is Booming Again — Apartment List
• San Jose, CA Airbnb & Short-Term Rental Data — AirDNA
• Transient Occupancy Tax — City of San José
• Airbnb & short-term rental laws in San Jose — Steadily