STR Deal Calculator Tool

14 Replies

I am brand new to investing and my passion is in hospitality so I am looking to start with a STR. I know there is a tool here to determine if a long term rental is a "deal" but I want to know where to begin in finding a deal on a STR. Any help is appreciated...thanks!

Would you be able to use the same calculator? A rental should be the same formula, income vs. expense. You'll need a little more information with an STR such as average daily rental and occupancy rates. As long as you have that info you should be able to determine the viability of the property.

Gross rent for the first 26 occupied weeks should pay for the purchase price of the house.  That's how I do it.  6 months of full rent should pay for the house.  But being realistic, it's going to take 8-12 months to get 6 full months of rent.  I've only done it twice (getting the purchase price back in the first 6 months).  YMMV.

@Gary Huber

I don't think the BP calculator does it, but there are other calculators for buy & hold properties that allow you to specify rent on a per week or per day basis, which is more suitable for what you're looking for. Other than that, the basic analysis would be same - just make sure you're using realistic vacancy and other expense estimates.

I use the calculator on my phone. If it won’t gross 2.5% + pick a different market. I’m in the smokys.

Originally posted by @Lucas Carl:

I use the calculator on my phone. If it won’t gross 2.5% + pick a different market. I’m in the smokys.

 Awesome!  I am in the Smokies as well.  Good place to get started?

When I don't use the abacus on my desk, I use the slide rule I keep in my shirt pocket.  If it won't pay for itself in 6 months of gross rent, the house is too expensive.  I'm in the worst place to live in Kansas.

There is so much more that goes into a short term rentals success than can be put into a calculator. To do a full depth analysis of a property for Airbnb you have to take into consideration: quality of furniture/eventual replacement of furniture, bedsheets/towels, consumables, laundry, cleaning, location of property, high and low seasons, competition in your area, cost of management, what amenities you should offer and eventual upgrades of those amenities...

That being said, I do run the BP calculator on my deals to make sure they will work as a long term rental in case I have to resort to plan B. So I would suggest doing an in depth analysis in addition to some various calculator scenarios.

My very general rule of thumb is I want my Airbnb properties to gross at a minimum of 3% of my acquisition price (acquisition price including initial furnishings and amenities). But that is in my market, I am sure people in other markets have different standards.

@Garry Huber @Jenessa NeSmith I have yet to find a good tool or platform to show real  Airbnb expenses vs real Aribnb income considering  vacancy and price adjustments . There are platforms that manage your listing and pricing but not that I found analyzing a deal as an investor . If there is some you saw please post here please in this forum.

I started creating a Google Sheet that incorporates investment , expenses vs credits and shows a percentage return o ROI . I'm still Touching it up and should be done soon .

The rental calculator can work for this, but you need to factor furnishings and upgrades into "rehab costs", realistically estimate annual revenue and divide by 12 for monthly income. Leave vacancy blank as it is already factored into your income estimate. Cleaning costs are almost a wash as they are passed on to the renter -- unless you don't pass them all along. In that case, estimate average number of rentals/year and divide by 12 then multiply by cleaning FEE and add to Other Income (along with any other fees you will charge), then also do the same thing but use your cleaning COST and add into Other Expenses. Don't forget any permit fees and taxes you are not allowed to pass on to renters. 

It's a little more work but once you get the hang of it you can do it just as quickly.