How to calculate income on STR with no experience

Question

How do you begin to calculate projected income for a STR having no experience in that realm of REI.

I have a deal that may be worth doing, however its not as strait forward as a MF rental or SFH where you can very easily gauge the income of the property. This would really only work as STR. The math doesn't add for it to be cash flow positive maxing out realistic rents after value add for a long term rental. It's strictly a STR property in a coastal area next to the water (3 homes in the same lot with a pool) and the AIRdna data shows a lot of similar properties anywhere from 30-50% occupancy, anywhere from $150-500 per night.

Basically I have limited info on the data and projections and cant truly nail down income until i list the property, which really feels like a gamble vs an investment. Ive run different scenarios through my own spreadsheets but how does one pull the trigger on something like this?

Any input would be helpful. Thanks guys

Jarrod Covey · Answer

Talk directly to STR property managers in the area. Join groups on FB that have Airbnb or Short Term Rental in title, ask for property management, get their estiamtes

Sarah Kensinger · Answer

Here is a video that might help you, it's step by step on how to analyze a property. Instead of airdna to find info on income, they use pricelabs but you can use whatever you have access to. Using this process helps you find all those key numbers...revenue, cash on cash return, cap rate, etc. that you need to know if it's a good investment as a STR. And of course, help pull the trigger on the property.

Andrew Steffens · Answer

IMO you will need to dig in to your specific area and use all the info contained on these boards, youtube, google, etc. If we knew the area or you had already had the rough numbers figured out and had some specific questions it may be easier for someone seasoned here to help more.

Leslie Anne Morris · Answer

See if anyone else in investing in the area and network with them on their prior performance. Also loop in investor focused agents and property managers who should have knowledge and experience and can speak to the area and it's popularity, historical data, etc. Most property managers have access to Key Data which may be helpful for you as well.

Sarah Kensinger · Answer

You need to take the night and do some major research. This forum, YouTube, and Instagram has loads of helpful information from people that like to teach about STR. There is so much out there if you just take a couple hours and scratch the surface!

John Underwood · Answer

Google STR excel template.

Michael Baum · Answer

Hey @Mark Jacobs, I suggest reading everything on the forum. There is a ton of info.

Where is the property located? It has 3 houses?

Have you taken time to look on AirBNB and VRBO to see what other places are doing in the area?

How to calculate income on STR with no experience

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