ROI- numbers for a str

[Ramada Evans]

Hello all!

I'm curious if anyone can give directions on running numbers to get ROI on a str? I want to get a property and use it as a vacation rental/air bnb.

As an example- if I purchased a property for $289,000, how do I do the numbers on it to see profits ? Putting 20% to 25% down.

Also how soon realistically should I see a return?

Also- what would be the formula if I kept as a long term rental? And all the above questions on a ltr.

Much appreciate any help. Thank you!

[Kenneth Garrett]

@Ramada Evans

Instead of ROI I would use cash on cash return and profit. Cash on cash (down payment and all closing costs) should be no less then 20% and hopefully it's closer to 30%. This means at 20% all of your cash is back in 5 years. At 30% in 3.33 years. Some years will fluctuate on income, but all in all should be very good. It definitely blows away LTR profit.