A short-term rental can produce attractive gross revenue while delivering weak net cash flow. The difference is usually seasonality, operating intensity, fees, or regulation.
Model revenue by period
One nightly rate multiplied by one occupancy rate hides seasonality. At minimum, test a base month, a peak period, and a low period. Use local comparable listings with similar bedrooms, amenities, and location.
Separate booked nights from blocked owner nights so the model reflects the intended operating plan.
Capture the operating load
Platform fees, cleaning gaps, supplies, utilities, internet, dynamic-pricing tools, management, maintenance, and furnishing replacement all reduce gross revenue.
Cleaning charged to guests may still create timing, damage, or turnover costs that should be visible.
Treat rules as a financial input
Licensing, zoning, occupancy limits, taxes, and HOA rules can change the viable revenue model. Confirm them before relying on an STR premium.
Always compare the property with a long-term-rental fallback. A strong fallback can turn regulatory uncertainty from a fatal risk into a manageable one.
- Run lower occupancy and lower nightly-rate cases.
- Include initial furnishing and replacement reserves.
- Verify local lodging-tax handling.
PropLurk keeps assumptions and outputs together so you can test the downside before moving a deal into your pipeline.
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