Revenue & underwriting
Turn assumptions into a transparent model of revenue, costs, and cash.
25 distinct questions. Start with the one closest to your decision.
What is short-term rental underwriting?
Underwriting is the process of testing whether an accommodation plan makes financial sense under explicit assumptions.
Read the answer Revenue & underwritingHow do I estimate accommodation revenue?
Multiply expected booked nights by the average accommodation rate actually earned, using consistent definitions.
Read the answer Revenue & underwritingWhat is average daily rate?
Average daily rate, often called ADR, measures accommodation revenue per booked night over a stated period.
Read the answer Revenue & underwritingHow do I calculate occupancy?
Divide booked nights by the available nights defined for the analysis.
Read the answer Revenue & underwritingWhat is revenue per available night?
Revenue per available night divides accommodation revenue by the chosen available-night denominator.
Read the answer Revenue & underwritingWhat expenses belong in a rental model?
Include the expenses needed to deliver and sustain the accommodation: utilities, suitable insurance, cleaning, supplies, maintenance, management, software, platform charges, taxes or fees you bear, and other property-specific obligations.
Read the answer Revenue & underwritingIs gross booking value the same as profit?
No.
Read the answer Revenue & underwritingHow do I calculate cash flow after debt?
Start with actual or projected cash inflows and subtract the cash outflows required during the same period, including operating costs and debt payments.
Read the answer Revenue & underwritingWhat is a break-even occupancy calculation?
A break-even occupancy calculation estimates the booked nights needed to cover specified costs at an assumed rate and contribution per stay.
Read the answer Revenue & underwritingHow do I account for cleaning fees?
Treat guest cleaning charges and cleaner payments as separate lines so you can see whether turnover economics work.
Read the answer Revenue & underwritingHow should I model property management costs?
Use the actual proposed contract rather than a generic percentage.
Read the answer Revenue & underwritingWhat is a sensitivity analysis?
Sensitivity analysis changes selected assumptions to show how the result responds.
Read the answer Revenue & underwritingHow should I model an opening delay?
Move the first revenue date and keep the cash obligations that continue before launch.
Read the answer Revenue & underwritingWhat is cash-on-cash return?
Cash-on-cash return compares a specified annual cash-flow measure with the cash invested.
Read the answer Revenue & underwritingHow do I model owner stays?
Remove owner-use dates from guest availability and account for any cleaning or other incremental costs.
Read the answer Revenue & underwritingHow should I budget maintenance reserves?
Estimate recurring service work and likely replacement needs based on the property and its condition.
Read the answer Revenue & underwritingHow do discounts affect an underwriting model?
Discounts reduce the rate actually earned and may change booking volume or stay length.
Read the answer Revenue & underwritingHow should I handle cancellation assumptions?
Forecasts should distinguish reserved nights from completed stays and allow for uncertainty around cancellations and refunds.
Read the answer Revenue & underwritingCan I annualize one strong month?
Annualizing one strong month can misrepresent a seasonal business.
Read the answer Revenue & underwritingHow do taxes collected from guests affect revenue reports?
Taxes collected from guests may be amounts owed to an authority rather than money retained by the operator.
Read the answer Revenue & underwritingWhat does a downside scenario include?
A useful downside combines plausible adverse conditions such as lower revenue, longer vacancy, an opening delay, and unexpected repairs.
Read the answer Revenue & underwritingHow do I compare short and longer rental stays financially?
Compare the revenue and costs for the same calendar period.
Read the answer Revenue & underwritingShould appreciation be necessary for the plan to work?
Property appreciation is uncertain and should be separated from operating cash flow.
Read the answer Revenue & underwritingHow do I reconcile a forecast with actual results?
Use the same definitions and periods for forecast and actual figures.
Read the answer Revenue & underwritingWhat makes a rental spreadsheet trustworthy?
A trustworthy spreadsheet has visible assumptions, consistent definitions, traceable sources, clear formulas, and checks that totals reconcile.
Read the answer