Vacation Rental Proformas

[Mike Woods]

HI BP!  Oregon Coast vacation rental investor here with a passion for financial modeling (nerd alert...).

Interested in how folks approach revenue modeling for VR's.   One approach is to model each month individually with assumed occupancies and average nightly rates.  These rates are informed by comps from airbnb, homeaway, or the like.  This results in twelve monthly revenues which are summed up to arrive at yearly Gross Revenue.  

There should of course be some sausage-making that goes into each month's assumptions, since rates vary within each month (think weekends, holidays, etc).  

What do you think?  Enough granularity? Please share your thoughts!

[Michael Guzik]

@Mike Woods Hey Mike great question! I agree with the sausage analogy but it really ultimately depends on your area. Here in San Antonio I know that typically on an "average" night they can get anywhere from 30-70 a night depending on the area and bedrooms. However during fiesta, the Valero Alamo Bowl, Mala Luna (a big music festival), Monster Jam, and WrestleMania people charge north of 100 a night easy! I've talked to some fellow airbnbers and they say they are always very conservative and look at worst case scenario. 60% occupancy a month at 30$ a month or whatever their lowest nightly charge is for the year. That way if something turns south, some new law or regulation goes in place or something else disastrous happens they know they will cashflow and weather the storm.