I would start by building out a basic P&L for what the property generates today vs. what it will generate in the future, and factor in any capital expenses required to get there.

@Maryam Mostafa chasing a 12% Cap will require:1) High risk properties Class C or D2) Getting lucky and getting the property under market value3) Doing a LOT of hard work to find an owner willing to sell under market value4) Doing the above to find and reposition a poorly managed propertyRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.When investing in areas they don’t really know, investors should research the different property Class submarkets.

I added value by installing four laundry rooms and kitchens in the existing spaces and separated them to create individual rentals.

$ for PITI (Principal, Interest, Taxes, Insurance); • 10% for Management; (even if self-managing, pay yourself for your time)• 5-8% for Vacancies; (Turnover happens & when it does it requires cleanup, repairs, listing, showing & leasing which can take up to a month easily.)• 5% for Repairs & Maint; (Repairs happen even on new builds)• 5% for CapEx; (Larger Expenditures will happen over time, so you have to figure for them.)• ?

I have a 30 day notice that requires I be paid my rate for any of the bookings within that window and I would continue my services during that time.

Hi Michael,As Jonathan said, I think you are thinking much more into this than what is required.

Its not just buy a place and toss it on Airbnb; its a business and it requires knowledge, resources, and recognizing that there are many different ways to have an STR business if you want the ROI. 

Analysis:Sect (f) - Right now only a 30 day notice is required by policy (not statute) in Alaska to raise rent on a month to month rental or end of lease agreement.

But in Florida and Alabama, if anything done requires a permit then only licensed contractors can do it.  

Compensate them for the work after it's completed to your satisfaction, just like any other professional.He may require a property management license, depending on what tasks he performs.