Short-Term Rental Expenses & Management
I wanted to know the differences or extra costs involved in converting a multifamily building into a STR. I was wondering why the STR numbers on the property I am currently looking at are so much better than the LTR numbers. I used AirDna to look at the regional STR market, and I factored in the cost of renovating and furnishing the units. To convert the units and market them, I would have to wait until the tenants moved out. But it would be greatly appreciated if someone could explain the extra costs to STR. Thank you.
P.S. If you're a STR property manager in the Atlanta area, I would love to connect and talk more.
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- Real Estate Broker
- Cody, WY
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If the market supports it, a short-term rental will perform better than a long-term rental because you can charge much higher rates. A $2,000 home is renting for $66.67 a night. Vacationers may pay $200 a night or $6,000 a month for the same home.
However, you have to factor in all the expenses: furnishings, consumables (tp, coffee, soap, etc.), marketing, taxes (8% in Atlanta), utilities including WiFi, landscaping, reservation fees, and more. If you use a property manager, expect to spend around 25%. Even if you do it yourself, your time has value and you should consider that as part of the cost.
A lot of people will tell you how much they gross, but it's rare that people share their expenses.
- Nathan Gesner
