Tim and John walk you through calculating simple ROI (Return on Investment) for a vacation rental or Airbnb investment. This is simple ROI, note there are other ways to calculate ROI for an airbnb property.
Calculating simple Airbnb ROI (Return on Investment):
Monthly expenses - tally up your monthly expenses (electric, water, pool, maintenance, streaming, cable, etc.)
Divide annual fees by 12 to get the monthly number
Calculate per rental day expense by dividing monthly expense by number of days in the month
If you are charging $500 per night subtract commissions paid to OTA and to property manager
Subtract daily cost of rental (For example $238) to get net income
Annualize this number and divide by the cost of your airbnb investment.
With historical data, take your annual gross rents and subtract all commissions, OTA fees, operating fees and divide by the cost of the airbnb investment
Please be very careful to not exclude any operating costs or it will inflate your ROI
Do your own ROI and do not rely on advice from a salesperson
Want to know more, need more help or have an idea for a podcast episode? Reach out to us at firstname.lastname@example.org. Join our owner community on facebook (we love to connect with other hosts!)
Listen to our latest podcast and subscribe on iTunes, Spotify, Amazon Music, Google Podcasts, and RSS. Please rate, review, and subscribe - all support helps us grow our community.
Are you in Florida and need a new airbnb cleaning service? Try vacationhomehelp.com so we can refer you to your new rockstar cleaning team and earn more 5-star reviews for cleanliness.