Step 6 · Run the numbers the way a lender and a buyer's broker do
Airbnb Cash-Flow Calculator for Washington Short-Term Rentals
Page author
Adriano Tori
Designated Broker, Founder & CEO — RexMont Real Estate · WA Lic. #27660
Adriano leads RexMont Real Estate — the most-reviewed real estate brokerage in Seattle and the Eastside. 1,200+ closed transactions, $1B+ in production, and 1,241 five-star Google reviews.
Written and reviewed by Adriano Tori, Designated Broker, WA Lic. #27660 · last reviewed September 19, 2026 · RexMont Real Estate, 1,241 five-star Google reviews, $1B+ closed across 1,200+ transactions. Not tax, legal or lending advice.
The short answer
Gross revenue is nightly rate × 365 × occupancy. Subtract management, platform fees and reserves (a percentage of revenue), then cleaning, utilities, insurance, property tax and HOA (fixed), to get net operating income. Subtract the annual mortgage payment to get cash flow.
Three ratios decide whether the deal is good: cash-on-cash (cash flow ÷ cash invested), DSCR (net operating income ÷ debt service; lenders want 1.0–1.25 or higher), and break-even occupancy (the occupancy at which cash flow is zero; if it is above your expected occupancy the property loses money in a normal year).
Washington lodging taxes are excluded from the model because they are charged to the guest and remitted; they are not your expense. Income-tax effects are on the tax benefits page.
Every short-term rental listing in Leavenworth, Chelan, Ocean Shores or the San Juans arrives with a revenue number attached. Sometimes it is the seller's real trailing twelve months; sometimes it is a projection from a rental-analytics screenshot; sometimes it is the best summer the property ever had, annualized. The calculator below is how RexMont takes any of those numbers apart. Replace the defaults with the property's actual statements and a lender's actual quote, and the result is a first read on whether the deal works before you spend money on an inspection.
The defaults are starting values, not statistics about any market. For real medians, inventory and the share of listings being marketed as short-term rentals in each Washington vacation market, use the RexMont STR Market Pulse, which we refresh monthly from NWMLS and RentCast data.
Annual cash flow after debt service
$5,555
$463 per month on $202,500 invested
Cash-on-cash
2.7%
Cap rate
6.7%
DSCR
1.15
Break-even occupancy
53%
DSCR lenders typically want net operating income of at least 1.0–1.25× the annual debt service. A break-even occupancy above your expected occupancy means the deal loses money in a normal year.
Educational model only, not investment, tax or lending advice. Defaults are starting values, not market statistics. Replace them with the seller's trailing-twelve-month statements and a lender's actual quote.
How to feed the calculator honest numbers
- 1Nightly rate: ask for the seller's platform payout reports for the last 24 months and compute average realized nightly rate (payouts ÷ nights booked), not the listed rate. If the property has never rented, use realized rates from three comparable listings, the same approach Fannie Mae now requires when a lender counts short-term rental income.
- 2Occupancy: nights booked ÷ 365 over a full year. Seasonal Washington markets often run 45–65% annualized; a single peak month proves nothing. Check for owner blocks that suppressed the number, and for discounted long stays that inflated it.
- 3Management: 0% if you will run it yourself (and want the tax treatment on the tax benefits page); full-service managers commonly charge 20–35%. Some community rental programs are mandatory and higher; read the covenants.
- 4Cleaning and turnover: guests usually pay a cleaning fee, but supplies, linens, restocking and mid-stay issues are yours. Budget monthly.
- 5Insurance: quote an STR-specific policy, plus wildfire underwriting on the east slope and flood insurance in a coastal flood zone. Do not use the seller's homeowners premium.
- 6Property tax: use the county assessor's current bill and expect reassessment toward your purchase price.
- 7Setup: furnishings, linens, smart locks, photography, permit and license fees, and buyer closing costs all count as cash invested, which is why a cheap cabin can have a mediocre cash-on-cash return.
Reading the outputs
Cash-on-cash return is the number to compare against alternatives: a treasury yield, a long-term rental in Renton, paying down the Bellevue mortgage. A short-term rental takes real work; if the modeled return does not beat a passive alternative by a margin that pays for that work and the seasonality risk, the deal is a lifestyle purchase, which is fine as long as you call it that.
DSCR is the lender's number and a safety margin. A non-agency short-term rental lender typically wants net operating income of at least 1.0 to 1.25 times the annual debt service; below 1.0, the property cannot pay its own mortgage in the modeled year. Cap rate (net operating income ÷ price) lets you compare markets regardless of financing. Break-even occupancy is the one to watch most closely: it tells you how far bookings can fall before you write a check every month, and Washington markets have soft shoulder seasons, wildfire smoke summers and ferry disruptions.
| Ratio | Formula | Read it as |
|---|---|---|
| Cash-on-cash | Annual cash flow ÷ (down payment + setup costs) | Your yield on the money actually deployed |
| Cap rate | Net operating income ÷ purchase price | Unlevered yield; compare markets and property types |
| DSCR | Net operating income ÷ annual debt service | Lender coverage; 1.25+ is comfortable, below 1.0 needs your paycheck |
| Break-even occupancy | (fixed costs + debt service) ÷ (nightly rate × 365 × (1 − variable %)) | The occupancy where cash flow hits zero; must sit well below your expectation |
What the calculator deliberately leaves out
- Lodging taxes. In Washington, retail sales tax and local lodging taxes on stays under 30 nights are collected from the guest and remitted, usually by the platform. They are not your cost, though direct bookings make you the collector.
- Income taxes and depreciation. Whether the property's paper loss offsets your W-2 depends on the seven-day and material-participation tests explained on the tax benefits page.
- Appreciation and principal paydown. Both are real returns; both are excluded so the model answers one question: does the property carry itself this year?
- Permit risk. A cabin that pencils at 55% occupancy pencils at 0% if the county permit does not survive your purchase. Check the Washington STR laws page and the due-diligence checklist before you trust any revenue figure.
FAQ
Questions Washington STR buyers ask first.
What is a good cash-on-cash return for a short-term rental in Washington?
There is no universal number, but the return should beat a passive alternative by enough to pay for the work and the seasonality risk. Many investors want high single digits or better on a self-managed property and accept less on a managed lifestyle purchase they also use. Model the deal at the seller's revenue and again at 20% below it before deciding.
What DSCR do lenders require for a vacation rental loan?
Non-agency DSCR lenders commonly require net operating income of at least 1.0 times annual debt service for standard pricing and 1.25 or higher for the best terms. Some programs lend below 1.0 with more equity and a higher rate. Agency loans qualify on your income instead, though Fannie Mae now allows documented short-term rental income on one-unit investment purchases.
Why are lodging taxes not in the calculator?
In Washington the retail sales tax and local lodging taxes on stays under 30 nights are charged to the guest on top of the nightly rate and remitted to the Department of Revenue, normally by the platform. They pass through you rather than reducing your revenue, so including them would understate cash flow. You remain responsible for taxes on direct bookings.
How do I estimate occupancy for a property that has never been rented?
Use realized data from three comparable short-term rentals in the same market and property type: nights booked and average rate over the prior year. Property managers and MLS remarks often supply this, and it is the same method Fannie Mae specifies for counting short-term rental income on an investment purchase. Then haircut it, because a new listing has no reviews.
Can RexMont check my numbers against the actual property?
Yes. Email yourself the model from the calculator and a RexMont broker will pressure-test the nightly rate, occupancy, permit status and lender terms against the specific address, then tell you what price the numbers actually support.
Pressure test
Have a property in mind? Send it with your numbers.
We will check the nightly rate and occupancy against the market's actual data, confirm the permit path for a new owner, and tell you the price at which the deal works.
- · Licensed Washington brokerage, Seattle and Bellevue offices, statewide NWMLS access
- · 1,241 five-star Google reviews, $1B+ closed
- · We coordinate with your CPA, lender and 1031 intermediary; we do not replace them