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Updated over 3 years ago on . Most recent reply

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Bonnie Low
#1 Medium-Term Rentals Contributor
  • Lender
  • Asheville, NC
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Is there a rule of thumb for estimating STR expenses beyond PITI?

Bonnie Low
#1 Medium-Term Rentals Contributor
  • Lender
  • Asheville, NC
Posted

Hello BP! I'm looking for feedback from experienced STR operators. We're experienced with LTRs, but are hoping to buy our first STR in early 2022. While I feel confident running numbers on LTRs I'm not sure what to estimate for expenses beyond PITI for a short term rental. I know cleaning fees are a pass through. That leaves HOA fees (if applicable), restocking basic supplies like paper goods and linens, power and water, landscaping, snow removal (in Bend, OR). So my questions are: 1) what am I overlooking and 2) is there a rule of thumb of % you typically add to estimate these expenses? Obviously it will vary seasonally and some guests will be respectful with utility usage while others will run the AC with the windows open but how do you estimate these costs when you run your numbers? Any help is much appreciated!

  • Bonnie Low
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    Collin Hays
    #4 All Forums Contributor
    • Property Manager
    • Gatlinburg, TN
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    Collin Hays
    #4 All Forums Contributor
    • Property Manager
    • Gatlinburg, TN
    Replied

    I figure 5-7 percent of rents for repairs and maintenance.  Also, users of airbnb or VRBO often forget to budget for the 8-11 percent fees that they deduct from your rents, as well as 3% credit card fees.

    In total, VRBO or Airbnb will be taking 11-14% right off the top.

    As for utilities, you can contact the local utilities company for a subject property and have them give you the last 12 months.

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