Airbnb / short-term rental: should I buy?
Enter a property's price, financing, and nightly-rental assumptions to project monthly cash flow, cap rate, and cash-on-cash return, then get a clear buy-or-pass read.
Reviewed by Brian Stroka, NMLS #1682839·Free, no signup·Equal Housing Lender
Likely a pass
-$706/moThis property is projected to lose money each month at these assumptions.
Monthly cash flow
-$706
Cap rate
4.23%
Cash-on-cash return
-8.66%
Gross annual revenue
$43,891
Annual operating expenses
$25,898
Monthly mortgage (P&I)
$2,205
Net operating income
$17,993
Cash needed to close
$97,750
Loan amount
$340,000
Frequently asked questions
- What's a good cash-on-cash return for a short-term rental?
- Many investors target 8% or higher on cash-on-cash return, though it varies by market and risk tolerance. This tool flags a deal as strong above 8%, workable from 4-8%, and thin below that.
- How do I finance an investment or Airbnb property?
- Options include conventional investment-property loans and DSCR loans, which qualify based on the property's rental income rather than your personal income. Terms differ from a primary residence, so it's worth reviewing your specific scenario with a loan officer.
- What should I be conservative about?
- Occupancy and nightly rate. New listings often ramp slowly, and seasonality matters. Run a lower-occupancy scenario to make sure the deal still works in a soft year.
BS
Questions about your numbers?
Brian Stroka, Loan Officer · NMLS #1682839