Short Term Rental Calculator

I created a short term rental calculator to help me expedite my analyses for rental properties. Prior to me creating this spreadsheet, which you can purchase here, I calculated expected revenue, operating expenses, etc. using my iPhone’s notepad app or on a piece of paper. It worked okay if I wanted to analyze a property while I was outside, but the majority of my analysis was done at home on my computer. I’d get a general sense of how a property would perform but I wanted to be more precise in my calculations so I created a spreadsheet specifically for analyzing short term rentals. In this guide, I’ll go over how to use this spreadsheet so you can determine whether a property may be a worthwhile investment.

This spreadsheet is designed to be a plug-and-play spreadsheet. The rules to follow are to only input data in the cells highlighted in BLUE. Everything else will work based on that input data such as the sales price, nightly rate, etc. The GREEN cells are important numbers or metrics like totals, gross revenue, annualized return-on-investment, etc. Now, we’ll go over the calculator step by step..

Step 1

In the first cell listed where it says “Step 1”, you’ll see a BLUE cell for the sales price. This is the amount that you and the seller agreed in your purchase agreement. Simple, right?

Step 2

Starting from this step, you’ll need to do some research in order to input the most accurate data you can for your analysis.
Monthly Occupancy Rate: Occupancy changes all the time depending on the location and season. So how can you determine how occupancy fluctuates in your location? Go to AirDNA’s website and refer to the chart that shows occupancy rate fluctuations monthly and use that as a baseline. To get a more accurate forecast, check AirBnb listings that are similar to yours in your immediate area and view how booked they are in the next 30 to 60 days. The next 30 days is the most accurate since most travel plans are booked a month out in my experience. See the difference between AirDNA’s occupancy rate for the zip code with another listing’s occupancy for that following month. I like to be conservative and go with the middle of that difference. If you want to be really conservative, I’d recommend just going with AirDNA’s occupancy rates throughout the year.

Average Nights Per Stay: Depending on if you require a minimum number of night stays or you block off the days a guest check out as a safety buffer for your cleaners to clean, you can adjust this number but if you’re like most hosts who require at least 2 nights per stay with same-day check-ins, you can put an average of 3-4 nights per stay. If you require a minimum of 6 night stays, you can put in 6.
Nightly Rate: AirBnb is the best source for this information, however, you can use AirDNA again as a baseline. Just like with occupancy rates, review current listings in your immediate area that are similar to yours in terms of size, style, etc. and see how much they’re charging within the next 30 days. Prices differ based on how close or far the date is from when you’re viewing so keep that in mind. If yours has extra amenities that another one near you doesn’t provide, evaluate the premium that you think guests will pay for to price your listing accordingly.

Step 3

Get some quotes or estimate what cleaning costs will be. These costs usually net to zero since it’s passed to the guest. I like to add $10-25 on top as long as it’s a reasonable total because a high cleaning cost can deter guests from booking. The reason I upcharge a bit more is for the cost to restock items such as shampoo, toilet paper, etc.

Step 4

A lot of these expenses listed in the table are self-explanatory so I’ll highlight certain ones to keep in mind:
Property Management: If you plan to outsource property management, the fee rate can range from 10% to 35% of gross revenue. Or you can be like me and remotely manage your properties. I have 3 units (soon to be 5 units) across 4 different locations.
Maintenance: Having AirBnbs will likely increase your maintenance costs compared to a long-term rental. However, you’ll make more revenue with Airbnb so the percentage you use for maintenance will go off the gross revenue, giving you more cash allocated for maintenance so that’s something to keep in mind. The same applies for what rate you decide to use for capital expenditures.
Expendables: This is for resupply your AirBnb. Sheets get stained, guests drop plates, etc. so this is expense category is meant for those costs. It’s just part of the business.

Step 5

Input your financing costs / terms.

Step 6

The following categories are start-up costs to get your AirBnb ready. This will affect your ROI and it won’t be used in forecasting future operating expenses since that was in step 4. Each of these categories could be lumped into one sum but for exact estimates, I broke it down into these three categories:
Furnishing: Estimate how much it’ll cost to furnish your property. This will vary on the style you want. Do you want the bare necessities or do you want to make it extravagant? Will you purchase these items from West Elm or Walmart?

Repairs: Not all properties will be turnkey. If you know you have some repairs or renovations to do, estimate the cost of those repairs and/or renovations.
Maintenance: Not all properties are well maintained by sellers. If you know you have to service the HVAC or replace the water heater, estimate the cost of that here.