Number Crunching/Underwriting with Cleaning Fees

[Lauren Heinen]

Hi! We have moved our market to New Mexico mountain ranges for STR purchasing. These houses are a lot cheaper, and therefore bring in less income.

I am looking at some seller financed deals at <5% interest rate, but the numbers still aren't in the green because the cleaning fees are such a massive part of the expenses. Am I doing something wrong, or are these cheaper properties just a lot more difficult to cash flow? (Essentially the opposite of LTRs). Any help would be great, and below is an example! Thanks

$230k Purchase Price

$30k gross income/year (AirDNA/Rabbu)

Yearly:

$12000 Monthly payments

$8000 utilities/capex/mx

$7000 cleaning (70 stays/$100 per clean)

Add in all the other costs and the cash flow is negative, even though it's such good loan terms. I feel like I'm doing something wrong with these cheaper properties. Thanks!

-Joe and Lauren