Short-Term Rental Financial Model (Airbnb, VRBO, & Others) (Excel XLSM)

BENEFITS OF DOCUMENT

1. This best practice applies best to individuals or businesses that are interested in evaluating the profitability of short term rental properties.
2. To provide users with a comprehensive tool to evaluate the profitability of short term rental properties.

DESCRIPTION

This product (Short-Term Rental Financial Model [Airbnb, VRBO, & Others]) is an Excel template (XLSM), which you can download immediately upon purchase.

Short-term Financial Model

The financial model for short-term rental that you have described is a comprehensive tool that can be used to evaluate the profitability of short-term rental properties. It allows users to choose between leased and purchased properties and input various property-related details such as value, loan-to-value ratio, and renovation costs.

The model also includes a section where users can input information about expenses related to furniture, appliances, and other costs necessary to prepare the property for rental. Users can customize the label to accurately reflect the type of expenses, making the model more flexible and adaptable to individual needs.

In the revenue assumptions section, users can set up various assumptions such as daily rates, occupancy rates, and charges for commonly provided items. The daily rates can be customized for each property, and the average stay duration can be adjusted per property requirements.

Additionally, the model includes an ArBnB or other platform fee as a percentage of effective gross rent, which is charged to the rentee per stay and can be customized for each property. The occupancy rates can be adjusted based on seasonality and property, making the model more realistic and reflective of actual market conditions.
The operating expenses section allows users to set monthly expenses dependent on stays. Users can adjust the label for expense types, making the model more customizable. If the property was acquired, there is no need to input any value for the monthly lease, and the cells will be formatted differently.
The model includes a section for other expenses and various assumptions, allowing users to input additional costs that may not have been covered elsewhere in the model. This section ensures that the model is comprehensive and that all relevant expenses are accounted for.

Additionally, the user can set up scenarios for further analysis, which is an excellent addition to the financial model for short-term rental. This feature allows users to test different assumptions and compare them side-by-side, enabling them to make a more informed decision and adjust their strategies accordingly.

The scenarios are based on the two most important drivers: daily rates, capital appreciation, and occupancy rates. By adjusting these drivers, users can test different assumptions and analyze how they affect the overall profitability of short-term rental property. This feature is handy when market conditions change or users want to try different pricing strategies.

The "Scenarios Overview" sheet provides a clear and concise summary of the different scenarios, allowing users to quickly compare and contrast the results. This sheet also includes key performance indicators such as net operating income, cash flow, and return on investment, making it easier for users to evaluate the impact of each scenario on the financial performance of the property.

Overall, the ability to set up scenarios for further analysis on the "Scenarios Overview" sheet is a powerful feature that adds significant value to the financial model for short-term rental. It provides users with the flexibility and insight needed to make informed decisions and optimize the profitability of their short-term rental properties.

Overall, the financial model for the short-term rental you described is a powerful tool to help individuals and businesses accurately evaluate short-term rental properties' profitability. It is flexible, customizable, and adaptable to individual needs, making it an essential tool for investing in short-term rental properties.

Adittional Info

Before using our downloadable best practice for evaluating short term rental properties, please note that macros must be enabled in Excel in order to use the model properly. This will allow you to access all of the features and functions that make our financial model a valuable tool for evaluating the profitability of short term rental investments.

In addition, we have included detailed information about the inputs required for the model on the input sheet, along with helpful tips and suggestions to guide you through the process. We recommend reviewing this information carefully before beginning your analysis, as it will help you to accurately and effectively use the model to evaluate your short term rental investments.

Please also note that while our downloadable best practice is designed to be user-friendly and intuitive, we understand that some users may require additional support or guidance in using the model effectively. Our team is available to answer any questions you may have about the model, and we encourage you to reach out if you require any assistance.

Thank you for choosing our downloadable best practice for evaluating short term rental properties. We are confident that you will find our model to be a valuable tool for optimizing your investments and achieving your financial goals.

Source: Best Practices in Integrated Financial Model, Airbnb Excel: Short-Term Rental Financial Model (Airbnb, VRBO, & Others) Excel (XLSM) Spreadsheet, Jair Almeida