A short-term rental spreadsheet can be a useful tool for monitoring your profits and losses, as well as getting an idea of the trajectory of your business.
There are numerous expenses to monitor, starting from utilities and supplies to paying for property management administration charges or marketing expenses. Skipping an expenditure could have a negative effect on your finances, resulting in fewer cash flow than you had expected.
In order to make sense of the numbers and avoid any problems in the future, having a short-term rental spreadsheet is a wise idea. Read further to discover how such a spreadsheet can help you come up with sound financial decisions and which details are worth paying attention to.
What Advantages Does a Short-term Rental Spreadsheet Offer?
Creating a custom template in Google Sheets or Excel is an economical way to bring together all the data you require. Here’s how a short-term rental spreadsheet can simplify the finance side of operating a short-term rental business:
1. Keep track of all your expenses carefully.
From regular cleanings to monthly mortgage payments and upkeep, there are numerous expenses that must be paid and monitored. It is easy to omit an expense, particularly when it comes to one-time expenses. A rental spreadsheet will assist you in arranging your operational expenditure aiding you in organizing your accounting.
2. Gain an accurate comprehension of your income vs. expenses.
A major benefit of a short-term rental spreadsheet is that it gives an extensive overview of your expenses. This makes it much simpler to determine which items you are allocating the most money for and pinpoint areas where you can cut back.
You can also utilize it to analyze your income for each month or asset. In this way, you are able to discern the flux of the seasons and adjust your plans and prices plan suitably.
3. Monitor your company’s progress
In order to evaluate the success of your business, you need to have access to reliable statistics and key metrics. Without precise figures, it is impossible to assess the value of your investment and whether or not it is successful.
4. Cut down the time needed to submit your tax return.
Having filled out a short-term rental spreadsheet over the course of the year, tax season will be significantly less overwhelming. This document will provide you with a head start, sparing you from having to laboriously calculate all your figures from scratch. In conclusion, it can save you countless hours on paperwork.
5. Figure out and anticipate your reinvestment plan
Are you presently in a position where it would be reasonable for you to take out a loan to purchase another property? Examining your rental income systematically can help you decide if you are prepared to increase your investments. It will also assist you with figuring out the amount of money that could be used to invest in a different holiday rental home.
You may wonder, how can key performance metrics help you to manage your property better?
What Information Should be Included in a Short-term rental Spreadsheet?
It is essential that hosts and property managers take note of several key metrics. To help you obtain a thorough outlook, here are some things to add to your short-term rental spreadsheet so you can remain organized.
1. Total revenue per property
To calculate the gross income per property, you just need to total up all the revenue generated by a specific property. If you offer any additional services, like guided tours or extra cleanings, that generate extra cash, these totals should be added as well.
2. Net income per property
This is calculated by taking the total income generated and subtracting all costs for running the property, such as insurance and cleaning fees. Put briefly, to figure out your net income per property, you take the gross income and subtract the expenses related to its upkeep.
Gaining a deeper understanding of your outgoings is immensely beneficial. In the event that there is a notable disparity between net income and total revenue, inspecting your expenditure in more detail should be of paramount importance.
Revenue per available room, or RevPar for short, is a straightforward way to measure the success of your business. It allows you to compare performance with competitors and gauge how different properties are doing in relation to one another. By simply looking at occupancy and average daily rate independently, you can get a more detailed understanding of your business.
To figure out your RevPar, you need to divide your total revenue from rentals by the total number of accessible properties for a particular time frame. You can also multiply the occupancy rate by average daily cost.
4. Average occupancy rate
Your average occupancy rate can aid you in determining if your rentals are priced correctly. It can also provide you with an overall understanding of the performance of your rentals. To assess your occupancy rate, it is critical that you compare it to the average for the area. If it is much lower than the standard for your area, it could be a sign that you are too expensive and vice versa.
To calculate the average occupancy rate, you need to divide the number of booked nights by the number of available nights and multiply it by 100.
5. Average daily rate
When obtaining your average daily rate, it is essential to bear in mind that it does not include your overhead expenses. Consequently, it should exclusively be utilized to give you a clearer picture of the income capability of the property.
To determine your everyday rate, you divide the total income that a certain property’s bookings made by the total number of nights booked.
6. Nights booked
This metric keeps track of the amount of times during the year that your rental has been booked. It is especially important if you are located in an area with a restriction on how many nights it can be rented out annually.
To figure out this amount, you can look to the vacation rental web site that you use. As an option, you can use vacation rental software which will total up the number of confirmed bookings for the current month plus other critical measurements (overall earnings, ADR, etc.) through its control panel.
7. Nights vacant
To determine nights vacant, subtract the booked nights from the total nights available. This will provide a clear picture of your business’s performance and can be helpful if you need to abide by a maximum amount of nights for renting out your property yearly.
8. Projected revenue
It is beneficial to have an idea of the revenue you expect to generate. This figure will assist you in gauging how your business is doing financially.
Simplify the Method of Monitoring Your Financial Performance
Utilizing a short-term rental spreadsheet to monitor your finances is a well-known method, however it also necessitates a significant amount of manual effort. It is common knowledge that manual labor can be liable to mistakes.
Automating the task of keeping track of your income and expenditure can remove manual labour and ensure there are no mistakes. For example, STR Trackwer, a vacation rental tracking software, allows hosts and property managers to see their business performance in one centralized Dashboard.
The STR Trackwer Dashboard and reports provides a clear-cut overview of the following metrics:
- Total expenses per category (monthly and yearly)
- Total income per platform (monthly and yearly)
- Occupancy rate
- Total return
- Nights booked
- Average price per night and per booking
In addition to tracking your analytics, STR Tracker also provides a range of other benefits that include recording expenses and bookings, automation, import your existing spreadsheet management and other features.
How do I track short term rental expenses with a spreadsheet?
1. Keep a record of all your rental income and expenses. Make sure you keep copies of all receipts, bills, and invoices for your records.
2. Record all short-term rental related costs, including repairs, advertising expenses, insurance costs, cleaning fees, etc.
3. Set up a separate bank account for your short-term rental business and use it to pay any related expenses. This will make it much easier to track what is coming in and going out each month.
4. At the end of each year, make sure you review your records and calculate the total amount of deductions for which you are eligible so that you can lower your taxable income on your tax return accordingly!
What is a good ROI on short-term rental?
The exact rate of return on a short-term rental will vary depending on the location, amenities, and other factors. Generally speaking, a good ROI on short-term rentals could range anywhere from 5-15%.