BP Buy & Hold Calculator for Short-Term/Vacation Rental

[Dave Gaines]

Hey All,

I’m new to BP and short-term/vacation rental (specifically Orlando, FL area) is what peaked my interest into real estate and I have been immersed in gathering information. I have been trying to run numbers and analyze properties through the BO Buy and Hold calculator but I have run into a few workarounds and wanted to reach out to see if anyone else experienced this. The biggest work around is the occupancy rate is different than vacancy rate (even got a pop-up starting to put a percentage in haha); therefore, I don’t really want to include it in my expense section.

1. Multiply occupancy assumption by 365 days
2. Multiply the days by the average rate
3. Divide that by 12 to get the average monthly income

Has anyone else done this work around? The other anomaly is that the property type doesn’t allow you to pick townhome, anyone else see this too? Not that big of a deal, but definitely something I noticed. 

Thanks guys!

[Jon Crosby]

Hey @Dave Gaines, you can certainly use a buy and hold calculator to get started with STR analysis. But they are very different business models that goes far beyond just the calculations. ADR (Avg Daily Rate) and Occupancy Total (based on occupancy rate and available days) will give you are gross operating income, but as you have probably already noticed, that is the tricky part. Even the automated systems cannot account for things like customer service, what kind of experience you are bringing guests, review status, etc. So, be sure to put very conservative numbers in for these metrics when analyzing. Conversely, on the Operating Expense side, you need to realize that STRs run VERY high Op Ex Ratios so the more you can itemize and get accurate numbers there the better.

Below is a spreadsheet I share often on BP that is a good place to start (especially with operating expenses).  You can use Everbooked and AirDNA to get high level estimates for your ADR and Occupancy rates but in the end, I usually like to supplement (especially if I'm getting serious about a property) with good old fashion legwork with calls to local property management companies and review of nearby listings on Airbnb/VRBO.  

Oh, here are a few articles I wrote on VRs here on BP if you want to check those out as well:   BLOG

spreadsheet:

https://www.dropbox.com/s/xwnw30cmjx32is1/Vacation...

Best of luck on your VR hunting!