eGuide: Choosing & Analyzing a Short Term Rental (Airbnb)

In this guide, I'll help you think through your short-term rental (STR) buying criteria - the why, where, what, who, how, and when. We’ll run long-term rental (LTR) numbers first. You’ll learn how to estimate market rents and operating expenses. Then, we’ll calculate net operating income (NOI), capitalization rate (cap rate), cash flow, cash-on-cash return (COCR), and the debt service coverage ratio (DSCR). (Excel file included.) We’ll cover targets for these metrics. Once we're sure our sample property breaks even as an STR, we'll calculate these metrics as an STR and decide together whether to make an offer or not. By the time we're done, the metrics and numbers used by real estate professionals will no longer be a mystery to you.