Simple Rule to Analyze Short-Term Rentals

[Serena Kim]

What are the metrics you use to analyze your short-term rentals? 

I've been analyzing my 4 short-term rentals from Kissimmee / Orlando (Disney area) and over the past few years they've grossed consistently around 18-22% of their value. 

Total Annual Gross Revenue = 18% of Total Investment (Property Price + Remodel)

Are you seeing that in different markets in the US in your properties?

My two 3br rentals generate $50-55k gross revenue each year ($300k properties). The 4br generated $55k last year and is on track to generate over $65k this year ($350k house). Finally, the newer 6br ($550k house) is well on track to generate over $100k this year.   

Just wondering if that could be used the same way we use the 1-2% rule on long-term rentals. Would be great to be able to quickly analyze a $1 million cabin in the Smoky Mountains vs a $500k house in Disney or Destin FL. 

With the fast property appreciation this rule will probably be closer to 16-18%, but should be a very simple way to start an analysis. I'm assuming a property with good location, management, and reviews.

Cash on cash return is another metrics I look at of course but wondering what you guys come across in your situation/market. 

Serena