Memphis STR Case Study: $3,072/Month from a Single Short-Term Rental

Every investor wants to see the numbers before they commit. Not projections. Not pro formas. Not "potential returns" dressed up in a spreadsheet someone built to close a deal.

So here they are. Fourteen months of actual owner earnings from a five-property short-term rental portfolio in Memphis, managed by Longstep Property Solutions from February 2025 through March 2026.

No hypotheticals. Just what happened.

The Ramp: One Memphis Property's First 9 Months

Every new short-term rental starts at zero. No reviews. No search ranking. No pricing history. Here is what the first nine months actually looked like for a 2-bedroom, 1-bathroom Memphis home with an all-in cost of roughly $202,500 including acquisition, renovation, and furnishing.

Month one: negative $501. That is normal. LPS was furnishing the home, shooting professional photos, building the listing, and calibrating the pricing algorithm. The owner did nothing.

By month two, the property was profitable at $1,281 in owner earnings. By month four, it hit 100% occupancy with $2,268 in owner earnings. And by month nine, the nightly rate had climbed from $60 to $114 as five-star reviews stacked up, pushing owner earnings past $3,000 per month.

Through March 2026, this property's lifetime owner earnings totaled $29,377. The total cash invested to acquire, renovate, and furnish it was roughly $54,000. That is a 54% return on invested capital in 14 months.

And this was not a one-time result. The same pattern played out across every property in the portfolio.

Then It Happened Again

A second property, a 3-bedroom with an all-in cost of roughly $190,000 including acquisition, renovation, and furnishing, came online ten months later. Same playbook. Same result.

It lost $659 during setup, broke even in its second month, and hit $1,792 in owner earnings by month three. By March 2026, its nightly rate had jumped to $133 as the listing matured. Total owner earnings in five producing months: $7,205.

The pattern across all five properties: month one is setup, month two is profitable, and by month three or four the unit is running at or near full capacity with climbing nightly rates. LPS manages the entire ramp. The owner's job is to wait.

Five Properties, One Investor, $84,000 in Owner Earnings

One Memphis investor. Five homes. Same playbook applied to each.

The portfolio's 2025 numbers tell the story. Across all five properties, from February through December 2025, gross revenue reached $161,000. Owner earnings after management fees, cleaning, maintenance, supplies, and every other operating expense totaled $84,000.

The average owner earnings per property per month: $1,835.

That is the number after every operating cost. It is what the owner actually deposits.

The Full Picture: Where the Return Actually Comes From

Most people only think about rental income. That is one of three ways this portfolio pays its owner every year.

Cash flow after every mortgage payment: $47,764 per year. Owner earnings minus all five mortgage payments. This is the money that hits the owner's bank account after management fees, cleaning, maintenance, debt service, and every other expense. Real cash.

Equity buildup from principal paydown: $15,737 per year. Every mortgage payment has two parts: interest and principal. The principal portion turns the bank's money into the owner's money. Across three loans, $15,737 per year in equity is building automatically on top of the cash flow. This number grows every year as the loans amortize.

Tax savings from depreciation: $16,000 to $23,000 per year. On paper, this portfolio shows a $67,000 loss despite being profitable. Cost segregation reclassifies components of each home into accelerated depreciation categories (appliances, flooring, cabinetry, landscaping, fencing). Combined with mortgage interest deductions, the IRS sees a loss. For qualifying investors, that paper loss offsets other income and puts $16,000 to $23,000 back at tax time depending on the bracket. The cash-flowing portfolio pays you and reduces your tax bill.

Add it up: approximately $85,000 per year in total economic benefit on $249,000 invested. That is a 34% total return.

For context, $249,000 in an S&P 500 index fund produces roughly $25,000 per year, fully taxable, with no equity buildup and no depreciation shield. This portfolio delivers more than 3x that total return on real assets, in the owner's name, with zero owner involvement.

What the Skeptic Wants to Know

What about the slow months? Q1 2026, the worst quarter, still delivered $28,000 in owner earnings across the portfolio. Nightly rates dipped to $91 average during the slow season, but summer months typically add 20 to 40 percent to both booking volume and nightly rates.

What are the real costs? The owner keeps 53 cents of every dollar booked after all operating expenses. That margin holds because LPS controls costs through in-house maintenance, in-house cleaning, and vertical integration that eliminates vendor markups.

How long until I make money? Every property was cash-flow positive within 60 to 90 days. Month one is always a setup period. But across all five properties, the second or third month was profitable and the initial loss was recovered within the first quarter.

What do I actually have to do? Nothing. That is the point. LPS manages everything: listing creation, dynamic pricing, guest screening, 24/7 guest communication, cleaning, maintenance, supply restocking, and monthly reporting. The owner of this portfolio has never visited three of the five properties since they went live. Monthly statement. Quarterly distribution. That is it.

Why Memphis

Memphis is one of the strongest cash-flow markets in the country for short-term rental investors. Target-neighborhood homes run $120,000 to $200,000 all-in, making the entry point accessible in ways that Nashville, Austin, or any coastal market simply cannot match. Demand is year-round with no harsh seasonal cliff. And gross yields on all-in cost in this portfolio ran 18.9% in 2025 and are pacing above 23% in 2026.

The numbers shown in this case study were produced during Q1, historically the weakest quarter for Memphis short-term rentals. Summer adds 20 to 40 percent to both nightly rates and booking volume. The stabilized run rate has room to grow. That is what makes Memphis compelling for out-of-state investors in particular.

See the Full Data

We published the complete case study with month-by-month earnings, individual property breakdowns, and the full three-part return analysis. No gating. No email capture. Just the numbers.

View the full Memphis STR case study

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