STR Pro Forma and Revenue Assumptions

Read it in four parts:

• Total upfront investment: Your down payment, closing costs, improvements, furnishings, design and other launch costs included in the model.
• Projected revenue: Estimated rental income based on comparable STRs and the planned guest experience.
• Ongoing expenses and financing: Operating costs, management fees, debt payments and any reserves included in the model.
• Projected returns: Cash flow remaining after those costs and cash-on-cash return relative to your upfront investment.

Confirm what each line includes with us. Monthly cash flow may be an annual average; actual results will vary with seasonality, launch timing and operations.

We use sources such as AirDNA, Airbtics and PriceLabs, with substantial research drawn from AirDNA. Our primary focus is the performance of relevant comparable properties, rather than relying solely on an automated estimate or the subject property’s current revenue.

These tools provide market data and estimates, so comparable revenue is not necessarily verified owner-reported income.

We model the property with the design, amenities and operating plan we recommend, not simply its current setup. Our strategy aims to create a standout property for large-group travel that can compete with leading local listings.

A higher projection depends on executing that plan and attracting sufficient demand. Adding amenities or improving design does not guarantee higher revenue.

We build a property-specific comp set instead of relying solely on the tool’s default estimate. We review relevant nearby listings, their average daily rate (ADR), occupancy and estimated annual revenue, then assess how the proposed design and amenities position this property against them.

Different comp selections and assumptions can produce different projections. AirDNA itself supports customized comp sets and forecasts based on the selected properties. AirDNA comp-set guidance

We start with nearby properties, adjusting the search radius to the market. We compare square footage, bedroom and bathroom count, guest capacity, location, amenities and design quality.

Proximity alone is not enough. A property serving a different guest segment or offering a substantially different experience may be a useful benchmark without being a direct comp.

The model includes recurring costs, such as utilities and management, and one-time costs, such as improvements, furnishings and design. Some figures come from quotes or known charges; others remain estimates until confirmed.

Please bring proposed changes to us rather than editing assumptions independently. We will review and update the model so the revenue, costs and returns remain consistent with the agreed plan.

Every pro forma is customized. Some homes already have the furnishings, condition or amenities needed to compete; others require additional investment.

We budget for what the specific property needs relative to its comps. If an item is absent or unclear, ask us whether it is unnecessary, included elsewhere or still awaiting an estimate.

Our general targets are at least 10% projected cash-on-cash return and $2,000 per month in projected cash flow after the expenses and debt payments included in the model.

Compare both alongside the total upfront investment. The monthly figure is typically an annual average, not a guaranteed monthly payout, and projected cash flow is before income taxes unless stated otherwise.

For cost segregation, our planning range is approximately $2,000–$3,000 through our preferred vendors. Other vendors may quote $4,000–$7,000 or more, depending on the property and scope. Confirm pricing and deliverables before ordering.

For CPA tax preparation, use $1,000–$2,000 as an initial planning allowance for an individual return with one STR and organized records, then obtain a personalized quote. As one published example, WCG lists an $800 base individual-return fee plus rental charges and separate setup fees. This is one firm’s pricing, not an industry-wide rate. CPA pricing example

Separate entity returns, additional states, bookkeeping cleanup, tax planning and cost segregation implementation can increase the total. Ask whether the quote includes entering the study, establishing depreciation schedules and any required additional filings.