Impacts short term rentals have on apartment valuations

[Pat Jackson]

We all know how apartments are valued....cap rates and NOI.

Here's a scenerio that's likely to play out. My partners and I own a couple apartments. All have been long term tenants. We are wanting to try some short term rentals in a couple units that are about to be vacant. We would purchase furnishings ourselves, and delegate management (overseeing bookings, handling cleaners, etc). How would this impact the valuation of an apartment? We are wanting to do this to increase cash flow to us, but it's unclear to me what this will do to the value of the apartment. Does anyone have any experience with this? Ever seen an appraisal that included short term rental income as part of the NOI?