cash on cash return for Airbnb’s

[Andy Acosta]

Hey BP!

So we've heard it said depending on location and a few other variables that the typical "rule of thumb" for our cash on cash ROI on a rental property we should try to shoot for is anywhere from 8%-12%. (The "base hit" number and the "home run" number). Those who are familiar with STRs know that an 8% cash on cash return on an Airbnb property would be a pretty bad performing property in that realm, since the revenues are so much higher.

So if I’m analyzing a deal for the purpose of AIRBNB, what is a good rule of thumb cash on cash return I should be shooting for when considering all the start up costs and expenses that go into that? What is that “base hit” number and the “home run” number for STRs? I might be overthinking this so let me know if I am !

Thanks !