Initially, I'm thinking you are correct that increasing the occupancy won't affect the nightly rate that much.

@Pranita Maldikar From your report, it appears you're looking to put $119k down on this property, is that correct?

Hey @Juan MendozaThe posters who are saying that the building code does not require a closet for a room to be considered a bedroom are correct.

You will have to verify those yourselves to ensure you end up with correct operating expenses.Quote from @Andrew Newcomb: Just following up on this in case anyone is still following:I learned about "cap rate" and "cash on cash" metrics in the BP learning articles and watched a couple vids on the BP rental calculator showing how it calcs those metrics for a prop (you have to add the details like loan info, expenses, etc). very cool tool.

If it is let me know and ill repost correctly. 

@Roi Azoulay I think you are absolutely correct in this.

I had to look up what "variance analysis" meant.If I understand the question correctly, you're asking "What went wrong to not hit our 20% target?"

Hey @Raghavendra Pillappa, late to the party here but everyone said it best.I wouldn't move forward on this until you find out all the details on if the septic can be expanded and if things were done correctly to add the bedrooms.

@Tim Bergstrom you correctly pointed out some of the hotter areas of town.

Other locals with similar experience had mentioned that this scenario might not be the best fit and it turned out to be correct.