While many real estate investors focus on mortgage rates and purchase prices, a less visible cost increase is steadily eroding short-term rental (STR) margins. Basic consumables that hosts must provide to guests – coffee, toilet paper, paper towels – have seen double-digit annual price hikes. These increases rarely appear in initial financial projections but accumulate over time, eroding profits.
“What scares me right now is coffee is up in one year, 20%,” says Libby Ross, who manages 47 short-term rental properties across Oklahoma through her company, Co-Host Oklahoma. “I provide coffee in my homes as a starter package. And eating 20% on coffee on an increase is a tough one.”
Ross explains that these aren’t optional extras. Consumables such as coffee and paper products are baseline guest expectations, and not providing them risks negative reviews or lost bookings. “When you start seeing these increases and the tariffs on coffee, on toilet paper, paper towels – to me, that’s actually a little bit more scary as far as a short-term rental investor versus just acquiring the property,” she says.
Consumable Inflation Hits Maintenance, Too
The inflation problem extends to maintenance supplies for property amenities. Chlorine, essential for pool upkeep, is a stark example. Ross notes that chlorine prices have surged by about 47% year over year, exacerbated by a chlorine factory explosion that tightened supply.
For operators who added pools to boost bookings, these chlorine cost increases have become a permanent drag on margins. Unlike acquisition costs, which are one-time and nonrecurring, maintenance expenses recur monthly and increase with inflation.
Ross states that this ongoing cost pressure is forcing a re-evaluation of which amenities are truly appropriate in secondary markets such as Oklahoma. “I don’t think if you put in an $85,000 pool on a short-term rental, you’re going to get your money back. Not in Oklahoma, maybe Florida,” she says.
Many first-time STR investors base amenity decisions solely on the potential for higher occupancy or nightly rates, assuming features such as pools will pay for themselves through increased revenue. But Ross argues these calculations often ignore the growing operational costs, which do not scale with booking volume.
Reconsidering the Amenity Strategy
With consumable and maintenance inflation outpacing revenue growth, operators are rethinking which amenities genuinely add value. Ross has shifted toward simpler, lower-maintenance features that still help her listings stand out.
“I like a hot tub in my home, if I can. I think that those are a great asset,” Ross explains. “The return on investment may not be there, except that people may book my home versus booking your house that’s next door because you don’t have a hot tub, and especially in these colder months.”
Hot tubs, she says, offer booking appeal without the high, volatile chemical costs of pools. They require regular care, but input costs are more predictable, and they attract guests during more months of the year in Oklahoma’s climate.
Ross believes that in Oklahoma, trying to outdo competitors with elaborate amenities rarely pays off. “You don’t need a pickleball court. You don’t even need a basketball court. I think just straightforward and keeping it simple, keeping it clean and crisp, that’s kind of the answer that you’re looking for,” she says.
The Underwriting Blind Spot
The larger issue, Ross argues, is that most STR investors use flawed underwriting models—many project current consumable and maintenance costs forward without accounting for realistic inflation. Over a five- to ten-year hold, this gap between expected and actual costs can turn a seemingly profitable investment into a breakeven or even loss-making venture.
Ross now meets investors who are “nickel and dimming two to $500” on operational expenses because their original budgets didn’t anticipate cost escalation. “When you get that heavy weight on their shoulders because of their investment, and maybe they’re taking actual food off of their table to be able to do this, because they don’t have big pockets, they’re just normal people trying to make their first investment,” she explains.
She says these operators often resist essential expenditures – like investing in quality washers and dryers – because they are already over budget. “Being able to get an investor who will buy you an excellent washer and dryer versus buying you the cheapest washer and dryer is huge for me, because that makes my operations smoother,” Ross says.
A Shift Toward Savvier Investors
To manage rising costs, Co-Host Oklahoma now targets more experienced investors who understand that operational cost inflation is not a temporary problem. Ross focuses on clients with 3 to 4 properties, as they tend to have more realistic expectations for ongoing expenses.
These investors, according to Ross, are “very savvy, especially with tax strategy” and “don’t have as much weight on their shoulders with their investments.” They can absorb price hikes without making choices that lower guest satisfaction or property condition.
Looking Ahead: Will the Industry Adapt?
Whether the broader STR industry will update its underwriting practices to account for inflation in consumable costs remains uncertain. For now, Ross believes the operators who survive will be those who recognize that operational expenses are not fixed. Instead, they change constantly and require regular adjustment.
As inflation continues to drive up the price of essentials, operators who ignore these trends risk seeing their margins disappear. The winners, Ross says, will be those who build flexible models, budget for rising costs, and focus on amenities that deliver real value without locking in high, unpredictable expenses. In today’s STR market, adaptability and realistic cost planning have become the keys to long-term profitability.
