Analyze local STR regulations Check city/county rules on permits, zoning, and licensing requirements
Research average daily rates (ADR) Use AirDNA, Mashvisor, or Rabbu to find comparable rates in your target area
Check occupancy rates Look for markets with 55%+ average occupancy for vacation rentals
Identify seasonality patterns Understand peak vs. off-season to forecast cash flow accurately
Study the competition Count active listings, review their amenities, pricing, and reviews
Evaluate demand drivers Tourism attractions, events, business travel, universities nearby
Check HOA restrictions Many HOAs prohibit or restrict short-term rentals
Research property taxes Some areas have higher taxes for non-homestead or investment properties
Understand local tax requirements Lodging tax, tourism tax, sales tax obligations for STR hosts
Verify future development plans Check for planned construction or zoning changes that could affect value
Pro Tip: Work with a realtor who specializes in STR investments - they'll have access to data and insights you can't find online.
Calculate projected gross revenue ADR x Occupancy Rate x 365 days = Annual Gross Revenue
Estimate all operating expenses Cleaning, utilities, supplies, maintenance, insurance, property management
Calculate cash-on-cash return Annual cash flow / Total cash invested - aim for 8%+ CoC return
Run conservative projections Use 10-15% below market averages to stress-test the deal
Factor in platform fees Airbnb takes 3%, VRBO 5-8% - include in expense calculations
Budget for furnishing costs Typically $10K-30K depending on property size and quality level
Include vacancy buffer Account for gaps between bookings and seasonal slowdowns
Plan for capital reserves Set aside 5-10% of revenue for repairs and replacements
Compare to long-term rental fallback Ensure the property works as LTR if STR regulations change
Get pre-approved for financing Investment property loans typically require 20-25% down
Assess location appeal Proximity to attractions, walkability, views, neighborhood safety
Evaluate bedroom/bathroom count More bedrooms = higher revenue potential, 2+ bathrooms preferred
Check for unique features Hot tub, pool, game room, views - these command premium rates
Get professional inspection Identify major issues before purchase - HVAC, roof, foundation, plumbing
Verify parking availability Dedicated parking is essential for most STR markets
Assess outdoor space Decks, patios, yards add significant booking appeal
Check internet availability High-speed internet is non-negotiable - verify speeds available
Review layout for guests Open floor plans, privacy between bedrooms, functional kitchen
Consider accessibility Single-level or elevator access expands your guest pool
Evaluate renovation needs Factor cosmetic updates into your budget and timeline
Obtain STR permit/license Apply early - some cities have waiting lists or caps
Get STR-specific insurance Standard homeowners doesn't cover commercial STR activity
Form business entity (LLC) Consult attorney about liability protection structure
Set up business bank account Keep personal and rental finances completely separate
Register for tax accounts State sales tax, local lodging tax, tourism tax as required
Review title and deed Ensure no restrictions on rental use in property records
Check neighbor relations Introduce yourself, understand any concerns proactively
Research property management options Get quotes even if self-managing - good to have backup plan
Understand cancellation policies Platform policies and your own policy for direct bookings
Create house rules Draft clear rules on noise, parties, pets, smoking, max guests
Pro Tip: Don't skip the LLC step - one lawsuit from a guest injury could wipe out your personal assets without proper protection.
Furnish and stage the property Invest in quality furniture, linens, and cohesive design
Install smart locks Keyless entry is essential for seamless self-check-in
Set up noise monitoring Devices like Minut help prevent parties and neighbor complaints
Hire professional photographer Quality photos are the #1 factor in booking conversion
Write compelling listing copy Highlight unique features, location benefits, guest experience
Set up pricing strategy Use dynamic pricing tools like PriceLabs or Wheelhouse
Build your cleaning team Reliable turnover cleaning is critical - have backups ready
Create welcome guide House manual with WiFi, appliances, local recommendations
Stock essential supplies Toiletries, kitchen basics, cleaning supplies, extra linens
Set up automated messaging Pre-arrival instructions, check-in details, review requests