Short-Term Rental Investing: Underwrite the Range, Not the Dream

Short-term rental income is a range, not a number — and every STR mistake starts with underwriting the top of the range as if it were the middle.

The two levers: ADR and occupancy

Revenue ≈ average daily rate × occupancy × 30.4. A $185/night unit at 60% occupancy grosses ~$3,375/month. The trap: seasonal markets swing occupancy 30 points, and the listing screenshots you saw were taken in peak month. Underwrite the annual average, stress-test at the slow-season floor, and treat the peak as upside.

The expense load that eats hosts alive

• Cleaning between stays (guest-paid fees rarely cover your true cost)
• Platform fees (~3%), utilities you now pay, streaming, supplies, linens
• Furnishing: $15-30K upfront on a typical unit, refreshed every few years
• Management: 20-30% of revenue if you don't want a second job
• Regulation risk — the one that zeroes accounts: cities change STR rules with a vote. Check permits and pending ordinances before buying, and never buy a deal that only works as an STR

The boring test every STR must pass

The honest question isn't "does it cash flow?" — it's "does it beat renting the same property long-term?" The long-term version has one tenant, one clean, no reviews, and rock-stable occupancy. If the STR only beats it at peak-season assumptions, you're not being paid for the extra work and risk.

The STR calculator runs your ADR and occupancy through a realistic load and shows the long-term comparison side by side. The analyzer does it from an address — with the verdict framed as a range, because pretending STR income is precise is how people get hurt.