Deal analysis articles for short-term rental operators — underwriting fundamentals, DSCR financing, cash flow modeling, and how to know if a property actually pencils before you buy it.
DSCR measures how much income cushion a property has above its full carrying cost. The denominator is PITIA — not just the mortgage payment — and the income figure is where STR lenders diverge significantly.
ADR tells you what you charged. Occupancy tells you how often. RevPAN tells you whether the combination is actually working. It’s the single metric that collapses both pricing dimensions into one number.
Break-even occupancy is the minimum number of booked nights per month required to cover all costs. The correct formula uses contribution margin — not raw ADR — and must exclude cleaning fees from the calculation.
A new STR listing doesn’t perform at market-average occupancy in months 1–4. Airbnb eliminated its New Listing Boost in late 2025. The correct underwriting model uses a two-phase ramp-up structure with a 10–15% conservatism discount applied.
The seasonal cash reserve is specifically sized to cover predictable monthly gaps between slow-season revenue and monthly PITIA. It’s funded during peak season and drawn during slow months — an annual cycle, not a one-time buffer.