Turnkey Airbnb rental how do you calculate the numbers

New to Real Estate · NYC · Member since 2026 · 15 posts · 3 votes

I have the opportunity to purchase a turnkey air bnb. How should I approach the purchase and run the numbers. The property is a studio apt. located in a condo complex. I'm sure it will sell for more than the listing price. Is there a formula to determine the optimal purchase price?

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John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

8mo

Quote from @Reuben Lewis:

First, its a STR that can be listed on Airbnd or other OTAs.

Second, you need to run the numbers. Deduct possible expenses from possible revenue.

Look at similar properties to get an idea what the nightly rates should be and to get an idea on occupancy levels. This will allow you to approximate income.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
8mo
Quote from @Reuben Lewis:

I have the opportunity to purchase a turnkey air bnb. How should I approach the purchase and run the numbers. The property is a studio apt. located in a condo complex. I'm sure it will sell for more than the listing price. Is there a formula to determine the optimal purchase price?

First, its a STR that can be listed on Airbnd or other OTAs.
Second, you need to run the numbers. Deduct possible expenses from possible revenue.
Look at similar properties to get an idea what the nightly rates should be and to get an idea on occupancy levels. This will allow you to approximate income.
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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
8mo
Others with more experience will chime in but here are some thoughts. If you add location you are considering you may get area specific intel. I don’t think the bank is likely to cover furnishings and possible rental income. Some places require you to honor a set time of previously booked reservations which is a positive in my opinion. It is my understanding that unless you keep same pm you will lose Airbnb and VRBO reviews which removes value. Although I find it odd that STRs generally aren’t valued and financed as a business that being the case I am not willing to pay above actual property value although I might negotiate furnishings if not being left anyway. Best wishes with your new endeavor.
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Account Closed
Investor · FL · Member since 2016 · 332 posts · 388 votes
8mo
VRBO will currently allow you to transfer reviews. We purchased a property a couple months ago and they transferred all reviews (most VRBO reviewed property in the area) once the first owner deactivated his listing. Call your VRBO rep to get it done. Airbnb reviews are lost, so if it is primarily successful on Airbnb then know you will be starting from scratch. If it is a repeat guest area then put in the offer that the current owner must provide a list of former guests and contact information at closing. I never had an issue with sellers doing this.
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Denise SuppleeBusiness Member
Realtor · Willow Grove, PA · Member since 2017 · 1k+ posts · 652 votes
8mo
Start by ignoring the "turnkey" label and underwriting it as if it were vacant. Look at at least 12 months of actual performance, not projections. Focus on true occupancy, average nightly rate, cleaning costs, platform fees, HOA rules, utilities, furnishing replacement, and local short term rental regulations since condos can change policies quickly.

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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
8mo
Hey @Reuben Lewis. A functioning STR isn't worth any more than any other condo like it in the complex. No lender will lend on an inflated value because it is a STR.
You will have to work with the owner for the furnishings etc. I think you can be a hard *** on values as they will have to move it out and either store it or sell it for pennies on the dollar.
Otherwise, you should have all the particulars on the previous years of operation. If you don't and they won't give them to you, walk away.
Remember, past performance is no guarantee of future results.
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Arman AhmedPro Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 961 votes
8mo
@Reuben Lewis
For a turnkey STR like that, it's best to start with cash flow first, estimate realistic occupancy, nightly rate, cleaning and management fees, plus utilities and HOA. Compare that to the purchase price and ongoing expenses to see your net cash flow. In Midwest markets, similar turnkey units often offer stronger cash-on-cash returns and lower upfront costs than high-priced coastal areas, which can make the numbers work even better. It's a solid way to get started with an Airbnb or short-term rental while minimizing risk.

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Reuben Lewis
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New to Real Estate · NYC · Member since 2026 · 15 posts · 3 votes
8mo
Yes, thank you everyone. Great info to consider.
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Bo SmithPro Member
Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
8mo
One thing most people miss: run comps on both rental income AND resale value in that exact building. Studios can be tricky because occupancy rates vary wildly. Also check the HOA's short-term rental policy - some condos are changing rules suddenly. What cap rate are they advertising vs what you're calculating?
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- Jules Aton
  MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
  8mo
  Quote from @Bo Smith:
  
  One thing most people miss: run comps on both rental income AND resale value in that exact building. Studios can be tricky because occupancy rates vary wildly. Also check the HOA's short-term rental policy - some condos are changing rules suddenly. What cap rate are they advertising vs what you're calculating?
  
  Wouldn't condo or HOA have to grandfather in whoever is currently doing whatever is allowed now whether that be STRs or pets?
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- Bo SmithPro Member
  Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
  8mo
  Hmm, I think you might've meant to reply to a different comment - my message was about tracking property expenses for tax deductions, not HOA rules or STRs. But yeah, HOAs usually do grandfather existing uses when they change rules. Are you dealing with HOA restrictions on your rental?
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- Jules Aton
  MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
  8mo
  Quote from @Bo Smith:
  Hmm, I think you might've meant to reply to a different comment - my message was about tracking property expenses for tax deductions, not HOA rules or STRs. But yeah, HOAs usually do grandfather existing uses when they change rules. Are you dealing with HOA restrictions on your rental?
  
  It was your comment: "Also check the HOA's short-term rental policy - some condos are changing rules suddenly."
  And no issues with mine just wondering if changing rules were actually a concern if already established.
  
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Josh Ball
Real Estate Agent · Louisiana · Member since 2017 · 215 posts · 149 votes
8mo
At the end of the day it's still the same as any other unit in there. Do not overpay because it's a STR with rental history. Market value plus whatever you see the furnishing valued at.
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
8mo
I represent a lot of buyers in the FL market and often sell "turnkey" properties. Turnkey properties do not get any more appraised value then vacant units, so any premium would need to be added to the cash to close. I have sold some turnkey units without great financials for the appraised price, and sometimes just above via a bill of sale to cover the contents not appraised. I have also sold properties that had insane financials and come turnkey, and gotten $30-50k over the appraised value for the seller (think $140k in income for a $540k house). There is some room for premium discussions but usually not, and you should underwrite it accordingly.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8mo
An ideal purchase price of a property is a below FMV.
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