How to analyze a Short Term Rental

[Will Gebbie]

Looking at airbnb investing in Colorado Springs but I'm not sure how to analyze a deal (such as a sfh). What percents do you typically run for property management vs maintenance/ cap ex, vacancy, and other costs? I know for longterm rentals I usually run 10% pm, 20% maintenance/capex, and 5% vacancy, but not sure how much is similar if any? And are there any guidelines you can use to determine what the average daily rate is (like how there is the 1% rule for long term rentals)? Any info on this subject would help!

[Patricia Taveras]

@Will Gebbie

Look up similar properties in the area and see what they rent for. Look at their calendars, to see how many days in the short term future are booked. In my area, hotel business statistical reports have coincided nicely with how my airbnb business flows as far as which months will be busy and which will be slow.

In addition to the regular real estate expenses, factor in cost of utilities, cable/internet, lawn service if it applies, and decide which amenities you'll provide: coffee, creamer, toilet paper, paper towels, etc. So far my maintenance costs on my STRs haven't been any higher than on my LTRs. Cleaning is another big expense, but you can charge cleaning fees in addition to nightly rate to offset cost.

I took the extra step of analyzing my short term rentals as though they were long term rentals as well, to make sure I would have a fall back if the STR plan should fail. So far, Airbnb has been great!

I hope this helps. Good luck!