Why Short-term Rental Data Points Matter
Investing in short-term rentals (STRs), like Airbnb properties, can be incredibly profitable, but it’s essential to understand the key data points that drive success. Whether you’re new to Airbnb investing or looking to grow your short-term rental portfolio, this guide breaks down the most important STR metrics you need to track to maximize your returns.
Let’s dive into the 15 most critical short-term rental data points that every investor should understand.
1. Average Daily Rate (ADR)
What it is: The Average Daily Rate (ADR) represents the average amount guests pay per night to stay at your property.
💡 Example: If your property rents for $250 per night on average, your ADR = $250.
✅ Why it matters: A higher ADR means more revenue per booking, but it’s important to balance this with occupancy. Too high an ADR with low occupancy can indicate overpricing.
2. Occupancy Rate
What it is: The Occupancy Rate is the percentage of nights your property is booked versus available.
💡 Example: If your property is available for 30 nights a month and booked for 20 nights, your occupancy rate = 67%.
✅ Why it matters: A high occupancy rate signals strong demand, but if it’s too high (90%+), it might indicate underpricing. The ideal scenario is to balance ADR and occupancy to maximize profits.
3. RevPAN (Revenue Per Available Night)
What it is: RevPAN is a combination of ADR and occupancy rate, providing a more accurate measure of your actual earnings per available night.
💡 RevPAN Formula: RevPAN = ADR × Occupancy Rate
💡 Example: If ADR = $200 and occupancy = 70%, then RevPAN = $140.
✅ Why it matters: RevPAN is a better indicator of revenue than ADR or occupancy alone, helping you forecast profitability.
4. Annual Booking Revenue
What it is: The total revenue your property generates from guest bookings over the course of a year.
💡 Example: If your STR earns $5,000 per month, your Annual Booking Revenue = $60,000.
✅ Why it matters: This figure is crucial for estimating long-term profitability and comparing your property to others in the market.
5. Cleaning Revenue
What it is: The total revenue from cleaning fees charged to guests for each booking.
💡 Example: If you charge $150 per cleaning and have 100 bookings per year, your Cleaning Revenue = $15,000.
✅ Why it matters: While cleaning fees should cover costs, overcharging can deter guests. Price competitively to keep bookings high.
6. Net Operating Income (NOI)
What it is: Your total income after deducting operating expenses (but before mortgage payments).
💡 Formula: NOI = Annual Booking Revenue - Operating Expenses
💡 Example: If your property generates $60,000 and operating expenses are $20,000, your NOI = $40,000.
✅ Why it matters: NOI is a key profitability metric, showing how well the property performs financially before debt payments.
7. Supply Fee
What it is: The cost of stocking essentials like toiletries, linens, and paper towels.
💡 Example: If you spend $1,500 annually on supplies, that cost should be included in your profitability analysis.
✅ Why it matters: These seemingly small expenses can add up and should be considered in your profit margins.
8. Cleaning Fee
What it is: The cost of cleaning your property after each guest’s stay.
💡 Example: If a cleaning service charges $120 per turnover and you have 100 bookings, your cleaning expenses total $12,000.
✅ Why it matters: Cleaning fees should be set to cover actual costs while remaining competitive. Overpricing can discourage guests.
9. Property Management Fee
What it is: The percentage fee property managers charge for handling bookings, guest communication, and maintenance.
💡 Example: If a manager charges 20% and your property generates $100,000 per year, you’ll pay $20,000 in management fees.
✅ Why it matters: Property managers offer convenience but come with additional costs. Self-management increases profit but requires more work.
10. Channel/Host Fees (Airbnb Fees)
What it is: The commission fees charged by platforms like Airbnb, Vrbo, and Booking.com.
💡 Example: Airbnb charges around 3% for hosts, while guests pay 14% or more in service fees.
✅ Why it matters: Factor in these fees when pricing your property to ensure they don’t eat into your profits.
11. Gross Yield
What it is: The percentage of annual revenue relative to the property’s purchase price.
💡 Formula: Gross Yield = (Annual Booking Revenue ÷ Property Price) × 100
💡 Example: If a property costs $500,000 and generates $75,000 per year in bookings, Gross Yield = 15%.
✅ Why it matters: A Gross Yield of 10% or higher is ideal for strong returns in short-term rental investments.
12. Cash-on-Cash Return (CoC Return)
What it is: The percentage return on the actual cash you’ve invested in the property.
💡 Formula: CoC Return = (Annual Cash Flow ÷ Upfront Cash Investment) × 100
💡 Example: If you invest $100,000 upfront and make $12,000 in annual cash flow, your CoC Return = 12%.
✅ Why it matters: Measures how quickly you recover your initial investment and can reinvest.
13. Cap Rate (Capitalization Rate)
What it is: The rate of return on an all-cash purchase of the property.
💡 Formula: Cap Rate = (NOI ÷ Property Price) × 100
💡 Example: If your property generates $40,000 in NOI and costs $500,000, the Cap Rate = 8%.
✅ Why it matters: A higher Cap Rate indicates a higher return on investment. STRs typically aim for a Cap Rate of 7% or higher.
14. Leveraged vs. Unleveraged Cash Flow
What it is:
Leveraged Cash Flow: Profit after mortgage payments.
Unleveraged Cash Flow: Profit before mortgage payments.
💡 Example: If your property generates $40,000 NOI and your mortgage is $25,000, your Leveraged Cash Flow = $15,000.
✅ Why it matters: Helps you understand your true cash flow after debt obligations.
15. Upfront Equity
What it is: The total cash required to purchase and set up the property.
💡 Includes:
Down Payment
Closing Costs
Furnishing & Setup Costs
💡 Example: If a $500,000 property requires a 20% down payment ($100,000) and $20,000 for furnishing, your upfront equity = $120,000.
✅ Why it matters: Upfront equity impacts your return on investment and overall profitability.
Final Thoughts: Use Data to Buy the Right STR
Understanding these key short-term rental data points will help you analyze properties, compare investments, and make smarter financial decisions.
🔹 Want to analyze STR deals faster?
Use Rabbu’s Market Data Tool (https://rabbu.com/airbnb-data) to see Airbnb revenue, occupancy rates, and returns by market.
🎯 Start making data-driven STR investment decisions today! 🚀