Short-Term Rental Yield Calculator

A 'good' cap rate is subjective and depends on the market, but generally, a rate between 8% and 12% is considered strong for a short-term rental property due to the higher management intensity and turnover compared to long-term rentals.

NOI is the income generated by a property after subtracting all operating expenses. It is a before-tax figure, so it does not include debt service (mortgage payments) or income taxes. It's a key indicator of a property's ability to generate profit.

Cap Rate is a measure of a property's intrinsic profitability, regardless of how it's financed. By excluding debt service, you can compare properties on an apples-to-apples basis. To analyze your return with financing, you would calculate your Cash-on-Cash Return.

You can increase your yield by either increasing your Net Operating Income (NOI) or, less commonly, by acquiring the property at a lower price. To increase NOI, focus on maximizing revenue (e.g., dynamic pricing, upselling services) and minimizing operating expenses (e.g., energy efficiency, preventative maintenance).

For calculating the potential return of a new investment, use the purchase price. To understand the performance of a property you already own, it's often more insightful to use the current market value. This tells you if the property is still a good investment compared to other opportunities.