Q3 2025 in short-term rentals. 2025 was the year the acquisition date on your closing statement started to matter enormously, and july through september has its own shape on top of that. Here is what moved, what it meant for an owner, and what the quarter was actually for.
What was happening across the market
2025 was the year the tax calculation split in two. Property acquired on or before 19 January stayed on the old phase-down at 40%. Property acquired after that date, once OBBBA passed in July, qualified for 100% bonus depreciation again. The same property, the same buyer, a different acquisition date, and a materially different first-year deduction.
Supply growth had slowed enough that well-selected markets were producing consistent results again, and the gap between markets widened as regulation diverged.
Financing costs had settled into a range buyers had learned to underwrite around rather than wait out.
The seasonal shape of Q3
Q3 is peak for the mountain, lake and beach markets and the trough for the desert. It is also hurricane season on the Gulf and the Atlantic, which is the single largest source of disrupted peak weeks in the whole calendar.
Reading a quarter in isolation is how owners talk themselves into bad decisions. A thin quarter in a seasonal market is not underperformance, it is the shape of the asset, and it should have been in the model at purchase.
What Q3 is actually for
Q3 is an operating quarter rather than a strategic one. The decisions that determine how it goes were made in Q2, and what is left is execution: turnovers, guest response, pricing against real-time demand, and handling whatever breaks.
For anyone buying after 19 January 2025, the restoration of 100% bonus depreciation returned the strategy to full strength for the first time since 2022.
This is an explanation rather than tax advice. My BnB Accelerator, LLC is a real estate acquisition firm, not a CPA firm. Our independent partner firm is AE Tax Advisors.
The Q3 checklist
- Watch net revenue per available night rather than occupancy, because occupancy at peak flatters everything.
- Respond to guest problems within minutes even when resolution takes hours, because response speed is the largest factor in whether a problem becomes a bad review.
- Ask every departing guest for a review, once, without pressure.
- For coastal properties, confirm the storm plan and the insurance position before the peak of the season rather than during it.
- Log participation hours weekly. Q3 is when the hours actually happen and when they are least likely to be recorded.
The risk carried into Q3 2025
The risk in 2025 was assuming the restored bonus depreciation applied to a property already owned or already under contract before the cut-off. Acquisition date, not placed-in-service date alone, governs which schedule applies.
2025 rewarded buyers who confirmed with their CPA which schedule their specific acquisition fell under before modelling a deduction.
The consistent thread across every quarter on this site is that the environment changes and the discipline does not. Twelve individual monthly revenue figures, a complete expense stack including reserves, and a stress test at 75% of projection that still covers debt service.
What to carry into the next quarter
July through September is one quarter of a business that is measured annually. The number that matters is not what this quarter produced but whether the year is tracking to the model, and whether the reserve is intact.
If the year is behind the model, the useful question is which input was wrong: revenue, cost, or the assumption about the market. Each has a different fix, and discounting is the right answer to only one of them.
If the year is ahead, the useful question is whether that is the property or the market. A property outperforming a flat market is a property to buy more of. A property matching a rising market has told you nothing yet.
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Frequently asked questions
What happened in the STR market in Q3 2025?
2025 was the year the tax calculation split in two. Property acquired on or before 19 January stayed on the old phase-down at 40%. Property acquired after that date, once OBBBA passed in July, qualified for 100% bonus depreciation again. The same property, the same buyer, a different acquisition date, and a materially different first-year deduction.
Which markets peak in july through september?
Q3 is peak for the mountain, lake and beach markets and the trough for the desert. It is also hurricane season on the Gulf and the Atlantic, which is the single largest source of disrupted peak weeks in the whole calendar.
What was bonus depreciation in 2025?
2025 was the split year. Property acquired on or before 19 January 2025 stayed on the phase-down at 40%. The One Big Beautiful Bill Act, signed in July, permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after 19 January 2025.