Underwrite STR Properties with STR Insights (Ep 618)
Summary
This podcast episode with Kenny Bedwell, founder of SDR Insights, discusses analyzing short-term rental properties for profitability. The focus is on using a "gross ROI" metric (gross annual revenue / purchase price) to quickly assess a property's potential. Hosts should consider this method to streamline their property analysis and focus on properties that meet their financial goals.
Key Insights
- •The episode highlights the importance of analyzing gross revenue first when evaluating a property. A host's goal is to determine the gross annual revenue needed based on a target gross ROI (Gross ROI = Gross Yearly Revenue / Purchase Price), which ensures the deal meets their financial goals.
- •For properties valued at $500,000, the guest suggested to aim for $100,000 in gross revenue to meet a 20% Gross ROI, with an estimated profit of about $30,000 after accounting for debt service.
Action Items
- ✓Determine your financial goals (cash flow, cash on cash return) and budget to establish your target gross ROI percentage.Effort: lowImpact: medium
Tools & Resources
- →SDR Insights: The episode mentions SDR Insights (tool/service).
Common Mistakes
- ⚠Don't skip the step of verifying market revenue drivers to prevent making assumptions on deals, for example, assuming views automatically drive revenue.
More from Pricing & Profitability
This article discusses Kansas City's high occupancy rates compared to other World Cup host cities, raising questions about the effectiveness of efforts to increase short-term rental availability. It implicitly touches on market trends and the impact of major events on the STR market. The article likely explores whether increased rental supply can meet demand while analyzing the city's approach to STRs.
Realtor.com's report on best mountain towns for Airbnb returns reveals key locations for STR investment. The analysis likely includes data on occupancy rates, ADR, and RevPAR to identify profitable markets. Understanding these trends helps hosts optimize pricing strategies and choose lucrative destinations.
Airbnb is offering a $750 incentive for some hosts in Georgia during the FIFA World Cup, potentially boosting occupancy and profitability. This program seeks to capitalize on increased demand from the international event, offering financial benefits to participating hosts. Learn how to qualify and leverage this incentive for your STR.
Curated by Learn STR by GoStudioM