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How To Perform Vacation Rental Investment Analysis for Solterra Resort Owners with Free Excel Templa

John Candelario
Nov 3, 2017
2 min read

Everyone loves money, profit, vacation...put all of that together and we have a good situation.

Finding out if your vacation rental home will be cash flow positive is daunting...

That is why I am going to breakdown vacation rental investment analysis for you quick and simple.

Your broker may or may not have done a tremendous job...or you may still be in the investment process. This is where numbers are CRITICAL.

Table 1: What you can earn...

You do not want to jump into deep waters without a life vest. Knowing your numbers is the #1 reason rental entrepreneurs succeed in thrive in an increasingly competitive environment. Plan. Execute. Succeed.

1.) Enter your loan information

2.) Projected Income - this requires some science and a little art. I call this comparables analysis, but its very simple. Find the five closest listings on HomeAway for example and check the calendar / rates section. Take the Low, Mid, High, and Peak season rates and find a good average. If you feel your rental has top of the line furniture and you can get several reviews quickly, price at the top of the range...if your furniture package and decor are not top of the line or you want to price a little lower to gain a bit more traffic, that is fine too.

Table 2: Below is a quick example...

Vacation Rental Rates Analysis Solterra Resort

Now that you have projected income...

3.) Project your expenses - this involves contacting other owners in the area to see what they are paying across the board and it varies for your home. If you are in Solterra Resort and want to know what these expenses are, I am happy to share just drop me a comment or send me a private message.

4.) Enter your tax info to find tax savings and count in depreciation expense

5.) Enter the cost of the loan and closing cost, P & I, etc.

6.) My financial model will populate the results for you showing you, net operating income (NOI), Cash Flow (before taxes), and Taxable Income / Tax Info

This is a GREAT starting point and if you know how to manipulate a spreadsheet, you can add in expenses as you see fit and income streams such as bbq rentals, etc (although you can lump this into projected income)

Now that you have the math - what are the numbers looking like? If they look great take the leap and make your dream come true.

But what if they don't ?

It may be a great purchase or it may not be. If you are in Solterra Resort and want to see if the numbers work just drop me a comment and I am happy to walk you through the analysis. All other vacation rental investors and owners...I am happy to walk you through the analysis. I am a former Wall Street Investment Banker who loves numbers!

Hope this helps, view of the model below.