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.
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Curated by Learn STR by GoStudioM