@Clint Harris Good info, and thanks for sharing the numbers that always helps when trying to visualize how someone processes their numbers workflow.
I've been an Airbnb host for 6+ years, founded a short term rental insurance company due to the damage that happens in STR listings, and invested in properties all over the world (Vietnam, Cape Town, Hawaii, Austin, Tulsa)
A few things that you left out of your post:
1. Regulation - it will catch up in any city you buy in, always check your zoning before putting offers in. It will sway in either way = pass or ban, but keep that in mind when looking for STR property.
2. Don’t forget to add in: permit fees, req’d addt’l insurance costs and necessary hotel or increased taxes you will pay when calculating your net profit.
3. Inventory - if there isn't a lot of inventory now there will be in 3-4 years, so STR's aren't for the long term hold. Once inventory catches up you're just in a price war with your neighbors a few blocks over and monthly profits don't look as svelte as Y1 and Y2.
4. Liability - if you don't have independent GL and E&O policy (if your co-hosting or property managing) you're asking for trouble to find you—and it will. There are countless guest lawsuits that will wipe out your whole livelihood, property portfolios and financial soundness.
Final thought:
The 50% more profit from STR vs Long term rentals seems pretty glamorous...it's like gambling at a casino and hitting 7's....and then the dealer changes (regulation/inventory)
There are over 2M STR listings in the US alone. I still believe long term rentals are the key to "long term wealth" which is why we intentionally keep a blend of STR and LTR in our portfolio.
