STR Investing, The Podcast How To Underwrite A Short Term Rental
Dec 5, 2025
Taylor dives into the nitty-gritty of underwriting short-term rentals, emphasizing the importance of discipline in financial spreadsheets. He breaks down crucial factors such as purchase price, closing costs, and total out-of-pocket expenses. Forecasting revenue with data tools like AirDNA and modeling realistic scenarios are key strategies discussed. The podcast also highlights the difference between Net Operating Income and Free Cash Flow, along with essential return metrics for savvy investors. Plus, he stresses the value of a long-term perspective on appreciation.
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Baseball Mindset For Deal Volume
- Taylor compares underwriting STRs to failing often in baseball and still being successful over time.
- He stresses you must evaluate hundreds of deals to find a few winners and learn from failures.
Always Count Total Out-Of-Pocket
- Calculate Total OOP including down payment, closing costs, reno, furniture, and vendor fees before buying.
- Add professional fees or your time if you plan to DIY so cash and labor are both accounted for.
Make An Optimization List That Moves Revenue
- Build an optimization list of physical fixes and amenities that move RevPAR before you buy.
- Prioritize changes that match local comps (e.g., hot tub, pool, game room) to compete effectively.