Queen Anne Short Term Rental

[Michael Smythies]

Hi BP, 

Our team at Rise Group COMPASS has an off-market home located in lower Queen Anne that has been operated as short term rental for the past year with STRONG numbers. This is a large 7 bedroom home with high quality finishes, views of the Puget Sound and of the Olympic Mountains. My question to you, is what sort of cap rate is a buyer of such a property looking for? For context, here are some relevant numbers: 

NOI: $150k

Annual Operating Expenses: $36k-$40k 

Current Occupancy: 35%

ADR: $1000/night 

How would you value out this property? What cap rates are buyers for this type of property looking for? 

Any help would be much appreciated, thank you!