STR start up considerations

[Stephen Girard]

Hello BP friends, I found a deal that would be great for short term rentals, this would be my first time analyzing the deal and I do not want to over think it as well as leave anything out.

I have checked the air dna web page and have a general idea on what to expect from an established rental.

I also have gotten an insurance quote. I have read on the Airbnb page about their insurance but will I need to insure the property in addition to the provided coverage from Airbnb?

Ive seen on other discussions to expect to pay around 5% of the booking on fees, how accurate is this?

How much would you estimate to furnish the apartment/house? What is the middle and high end costs? Themes or neutral?

Thanks in advance

[Stephanie Reinagel]

Here's an example of my analysis of a rental arbitrage property:

Bedrooms	Bathrooms	Guests	Rent	Nightly Average	Percent Occupancy	Profitability	Monthly Net	Yearly Net	Profit/Bedroom
3	3	8	1995	282	71	176.11%	$3,513.32	$42,159.89	$1,171.11

I use AirDNA to get the % Occupancy and Nightly Average, and factor 20% of rent for utilities and insurance, and take out 3% for Airbnb fees. This doesn't factor in cost to furnish. For a nice looking, but minimalist home, you can plan to spend the following: 

• -$2000 per bedroom (furniture, linens, mattress, etc.)
• -$250 per bathroom
• -$1500 per living area (including outdoor spaces)
• -$1200 for a Kitchen + Dining 
• -$500 miscellaneous 

That's buying everything new, so if you have the time and energy to shop around for some gently used furniture, you COULD do it cheaper, but I've found that the financial savings is seldom worth the time and effort it requires. You could also go crazy in any of those areas with high-end furniture, arcade games, hot tubs, etc. These numbers have held true for my 5 units so far (1, 2, and 4 bedrooms)