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Category: Pricing & Revenue
By: Chris Nakamura
Reply by David Okafor:
Here's a realistic expense breakdown for a $350K STR generating $3,500/month gross: **Monthly expenses:** - Mortgage (30yr @ 7%): ~$2,100 (assuming 20% down / $280K loan) - Property tax: ~$350 - Insurance (STR policy): ~$150 - HOA (if condo): ~$200-400 - Utilities (electric, water, internet): ~$200 - Cleaning ($120/turnover × 6): ~$720 - Platform fees (3% host fee): ~$105 - Supplies & consumables: ~$75 - Software (PriceLabs, Hospitable): ~$45 - Maintenance reserve (5% gross): ~$175 - Vacancy allowance (20% annually): -$700/month effective **Total monthly expenses: ~$4,120-4,320** At $3,500/month gross, you're LOSING $600-800/month. This is a bad deal unless you can push revenue to $4,500+ or reduce expenses. Most new investors forget: mortgage, HOA, maintenance reserve, vacancy allowance, and platform fees. They see $3,500/month and think it's all profit. A good STR should target 8-12% cash-on-cash return. Use DealCheck (https://dealcheck.io) to model the full deal before making an offer. AirDNA (https://airdna.co) provides realistic revenue estimates for comparable properties in any market.
Reply by Tyler Jackson:
The expense breakdown above is solid. I'd add one more: **furnishing amortization**. If you spend $8K furnishing the place, that needs to be replaced roughly every 3-4 years in a high-turnover STR. That's $167-222/month in hidden cost. Also, get real revenue data, not estimates. AirDNA gives you actual average daily rate and occupancy for your exact neighborhood. "Comparable listings" on Airbnb are misleading because you see their asking price, not their actual booking rate.