I've worked with over 400 STR investors at this point, and the mistake I still see the most has nothing to do with the property itself. It's often cash reserves. People will underwrite a deal down to the exact dollar on ADR and occupancy, build this beautiful spreadsheet, and then go put every last dollar into the down payment and furniture package. Then month two hits, the water heater dies, or the county decides to reassess your property taxes, and suddenly they're stressed out and second guessing the whole investment.

Here's what I tell the investors I mentor now: budget for a full slow season before you ever list the property. Not a slow month, a slow season. STRs are seasonal businesses even in markets that feel hot year round, and if you can't survive January or a rainy summer without touching your reserves, you either bought the wrong deal or you bought it with the wrong amount down.

The other piece nobody talks about enough is that furnishing a property well is not the same as furnishing it expensively. I've seen a less expensive furniture package outperform properties that spent way more but were not intentional with their choices. Because the owner may have spent less but actually thought about what a guest touches, sits on, and photographs. It's not one thing, it's everything. Spending a bunch of money on buildout does not guarantee success.

When we're underwriting deals right now, we run it with three months of zero income baked in and see if it still pencils. Most people miss this because it's annoying and it makes the numbers look worse. That's exactly why you should do it. If you have to convince yourself it's a good deal then maybe it's friggin not.

What's the reserve number you actually keep for your STRs, and did you land on that number before or after you got burned?