Basically, the percentage of the income that is derived from the borrowed - non-IRA - money is taxed.  

How would the bank derive new valuation?

Maybe there are other markets like this (in fact, we have another one in FL and one in the Smokey mountains like this but with higher occupancy by choice) but unless the investor goal includes deriving personal value from one’s STR property, raw data looks and feels  different.

Here is why I have valued working with him so much.Skilled and Experienced Real Estate InvestorCollin owns and has rehabbed several properties so his input was highly valued throughout the process.He advised on asset selection and offered me the idea of doing my own underlayment project to level the floor which was the primary improvement needed in my flip project.He was familiar and experienced with flip formulas to derive a good purchase price.He advised on municipal codes for each house we looked at.Advised on all construction considered for each property.Advised me on removing a massive amount of dust from my condo.

The regulations around STRs derive from the State, and typically differ by type of residential property (multi-family condo, single family home, etc.).

When it comes to cap rate and its derivatives (i.e.

Theme was that people would tend to respond more to this wanting to know how the number was derived at minimum.

SFR (single family) will be predominantly by far owner-occupants, even in pretty vacation-based areas, therefore the value is going to be based on comps and what the market will pay for.Anything multi-unit - especially once you get past 5 or so, the market will be strictly investors, who are focused on the income/value potential above all else (do not care about living there or personal taste), so value will be primarily derived from income/cap rates.Almost all STRs fall into #1 - SFR - so they will be valued on comps to other SFRs (OO, LTR or STR), while anything multi-unit will more be based on commercial valuation practices

It derived from this equation:Cash flow = (rent / 2) - PMT(rate, term, purchase price)The first part, "rent/2" is applying the 50% rule to get to "net operating income" (NOI) from the rent.

Most income will be derived from the Fannie forms but there are portfolio loans that can veer from the typical methods.