Short-Term vs. Long-Term Rentals in the Hudson Valley: What's More Profitable?

Short-term rentals promise high nightly rates to Hudson Valley visitors; long-term rentals promise a steady tenant and a quiet phone. Which is more profitable depends less on a spreadsheet than on the town the property sits in, because local short-term rental rules decide whether the higher revenue is even available. This guide compares short-term vs long-term rentals in the Hudson Valley: revenue, real costs, workload, the 2025 and 2026 rule changes, and a worked comparison.

Long-term rentals: stability and simplicity

Pros

• Predictable income from a 12-month lease.
• Lower operating costs: tenants usually pay their own utilities; turnover happens yearly at most; no furnishing.
• Lighter management: rent collection, occasional repairs, renewals.
• Fewer rules to track than short-term rentals, though New York's tenant protections are extensive; see finding and screening tenants in New York.

Cons

• Lower gross revenue than a busy short-term rental.
• Less flexibility for your own use.
• Tenant risk: a problem tenancy can be slow and costly to resolve.

Short-term rentals: a hospitality business

Pros

• Higher gross revenue potential in peak seasons.
• Personal use between bookings.
• Dynamic pricing around foliage season, holidays and events.

Cons

• Seasonality and income volatility.
• Much higher operating costs: management commissions, cleaning after every stay, utilities, supplies, platform fees, specialized insurance, furnishing.
• Hands-on work: guest messages at all hours, turnovers, reviews.
• Regulation, the deciding factor below.

The deciding factor: the rules

State level

• Sales tax: since March 1, 2025, New York State and local sales tax applies to short-term rental unit occupancy; booking platforms that facilitate a stay collect it, and operators renting directly must register as sales tax vendors unless an exception applies (NYS Department of Taxation and Finance).
• Registries and reporting: a 2024 state law requires booking platforms to report activity and lets counties set up short-term rental registries and collect their occupancy taxes (New York State Senate).

County level

Counties levy hotel and short-term rental occupancy taxes. Ulster County, for example, charges a 4% occupancy tax and requires operators to register with its Department of Finance (Ulster County). These taxes are charged to guests but must be collected and remitted correctly.

Town, city and village level

This is where the rules differ most, and they change often. Three examples:

• Kingston caps full-time short-term rentals at 106 permits, about 1% of the city's housing units, while limited rentals of fewer than 30 days a year and resident-occupied rentals are not capped; permits require registration and inspection (City of Kingston).
• Woodstock requires registration, caps non-owner-occupied permits, limits non-owner-occupied rentals to 180 days and 26 weekends a year, and allows one non-owner-occupied unit per owner (Town of Woodstock FAQ).
• The Town of Rhinebeck has required the rental to be the owner's primary residence, occupied by the owner during the rental, with a permit and inspection (Town of Rhinebeck application); the town has since rewritten its law, so confirm the current version.

The lesson: before you model a dollar of short-term income, get the current ordinance from the building or code enforcement office of the exact town or village, and confirm a permit is actually available.

A worked comparison

A hypothetical two-bedroom house bought for $550,000. Every figure is an assumption for illustration; test your own.

Shared costs

• Loan: $440,000 at an assumed 7.5% investor rate (the 30-year survey average was 7.03% on September 24, 2026, Freddie Mac PMMS): about $36,919 a year.
• Property taxes: $11,000 a year.

Long-term rental

• Rent $2,800 a month, 3% vacancy: $32,592 a year.
• Management 9%, repairs 5%, insurance $1,500, an annualized leasing fee $2,100, taxes: $19,163.
• Net operating income: $13,429. After the mortgage: about minus $23,490.

Short-term rental

• $350 a night average, 50% occupancy: $63,875 a year.
• Management 25%, cleaning $125 per stay (four-night average), utilities $6,000, insurance $2,000, supplies $2,400, repairs 5%, platform fees 3%, taxes: $48,182. (Sales and occupancy taxes are charged to guests on top of the rate.)
• Net operating income: $15,693. After the mortgage: about minus $21,226. Add about $25,000 of furnishing before the first guest.

What the numbers say:

• At these prices and rates, neither covers the mortgage with 20% down; both are bets on paydown and appreciation.
• The short-term rental only beats the long-term rental's net operating income above about 47% occupancy at $350 a night. At 40% it nets about $8,275; at 60%, about $23,112.
• The short-term rental is far more sensitive to revenue: a soft season hits it much harder because so many costs are fixed.

Use the formulas in how to calculate ROI and cap rate to test your own property.

Which fits you?

A short-term rental may fit if you can meet local residency or permit rules, you want to manage a hospitality business or pay someone 20% or more of revenue to do it, and you can absorb income swings.

A long-term rental may fit if you live elsewhere, want steadier income and less work, or are buying in a town where short-term permits are capped or restricted to owner-occupants.

A hybrid (short-term in peak season, 30-day-plus furnished stays or a lease the rest of the year) can work where rules allow, but check how your town defines and counts short-term days.

Due diligence before you buy

1. Get the current short-term rental law and permit availability from the municipality.
2. Confirm the county and state tax registrations you will need.
3. Model both strategies conservatively, and stress-test a weak year.
4. Get insurance quotes for the exact use.
5. Talk to two local managers about realistic rates, occupancy and costs.
6. Confirm the property meets code for its intended use: egress, smoke and carbon monoxide alarms, septic capacity.

Browse properties on our home search, or talk with us about a specific town.

This article is general information, not legal, tax or financial advice.

Frequently asked questions

Are short-term rentals more profitable than long-term rentals in the Hudson Valley?

They can gross much more, but costs are far higher and rules are stricter. In the worked example, the short-term rental only out-earns the long-term rental above roughly 47% occupancy, and many towns limit or cap short-term rentals.

Do short-term rentals in New York pay sales tax?

Yes. Since March 1, 2025, state and local sales tax applies to short-term rental occupancy; booking platforms collect it on the stays they facilitate, and county occupancy taxes may also apply.

Which Hudson Valley towns regulate short-term rentals?

Many do, and the rules differ town by town. Kingston caps full-time permits, Woodstock caps non-owner-occupied permits and limits rental days, and the Town of Rhinebeck has required owner occupancy. Always check the current ordinance.

What are the hidden costs of an Airbnb?

Management commissions, cleaning after every stay, utilities, supplies, platform fees, specialized insurance, furnishing, permits, and the time to run it.

Is a long-term rental a safer investment?

Generally it is steadier: lower costs, fewer rules to track and less exposure to tourism swings, in exchange for lower gross revenue.

Sources

• NYS Department of Taxation and Finance, sales tax on short-term rental unit occupancy
• New York State Senate, short-term rental law, 2024
• Ulster County, hotel, motel and short-term rental occupancy tax
• City of Kingston, short-term rental fact sheet; Town of Woodstock, short-term rental FAQ; Town of Rhinebeck, short-term rental application
• Freddie Mac, Primary Mortgage Market Survey

Checked against these sources on September 24, 2026. Local rules change often; the example uses stated assumptions.