1. What Is Short-Term Rental Cash Flow?

Cash flow in short-term rentals represents the net income generated from renting out a property after accounting for all associated costs. It's a key metric for evaluating rental property profitability.

2. How Does The Calculator Work?

The calculator uses the cash flow formula:

Where:

• Nightly Rate — The price charged per night (USD)
• Occupancy — The percentage of time the property is rented (%)
• Costs — All expenses associated with the rental (USD)

Explanation: This formula calculates the net profit by multiplying the nightly rate by occupancy percentage to get gross revenue, then subtracting all costs.

3. Importance Of Cash Flow Calculation

Details: Accurate cash flow calculation is essential for assessing rental property viability, making investment decisions, and managing operational expenses effectively.

4. Using The Calculator

Tips: Enter nightly rate in USD, occupancy as a percentage (0-100), and total costs in USD. All values must be valid non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What costs should be included in the calculation?
A: Include mortgage payments, property taxes, insurance, maintenance, utilities, cleaning fees, management fees, and any other operational expenses.

Q2: How is occupancy percentage calculated?
A: Occupancy percentage = (Number of booked nights / Total available nights) × 100 over a specific period (usually monthly or annually).

Q3: What is considered good cash flow for a short-term rental?
A: This varies by market, but generally positive cash flow that covers expenses and provides a reasonable return on investment is desirable.

Q4: Should seasonal variations be considered?
A: Yes, it's best to calculate cash flow using average nightly rates and occupancy rates that account for seasonal fluctuations.

Q5: How often should cash flow be recalculated?
A: Regular monitoring (monthly or quarterly) is recommended to track performance and make necessary adjustments to pricing or operations.