Formula version 2026.1

Gross yield

Gross yield = annual rent before costs and vacancy ÷ purchase price.

Effective income

Effective income = potential rent − vacancy loss (long-term) or unbooked nights (daily).

Operating income (NOI)

Operating income (NOI) = effective income − operating costs. Loan payments are not part of it.

Net yield

Net yield = NOI ÷ total acquisition cost (price + purchase fees + renovation, furniture and appliances). Operating costs: management, platform fee, cleaning, maintenance, insurance, utilities, taxes, reserve.

Operating costs

Management, rental income tax and the reserve are operating costs before NOI, calculated on the rent collected (effective income).

Cash-on-cash return

Cash-on-cash = (NOI − annual loan payments) ÷ your money in (down payment + purchase and preparation costs).

Payback

Payback — how many years until the cumulative cash flow, without the sale, returns your money in (allowing for the income delay, rent growth and the end of the loan).

Internal rate of return (IRR)

IRR — the annual rate at which all cash flows (purchase, yearly flows, sale) discounted to today add up to zero.

NPV at your rate

NPV = future cash flows discounted to today at your rate, minus your money in.

Sale result

Sale result = sale price − selling costs − remaining loan + cash flow over the holding period − your money in.

Value in n years

Value in n years = current value × (1 + g)ⁿ, where g is the annual price growth. Rent grows separately, at its own rate.

Daily income

Daily income = nightly price × nights in the month × that month's occupancy, month by month. Platform fees and cleaning are separate lines.

Mixed strategy

Mixed strategy: income and direct costs are calculated separately for daily and long-term months, then added up.

Every cost counts once

Every cost counts once: platform fees and cleaning only in the daily part, property tax and insurance only in shared costs.

Real return

Real return = (1 + IRR) ÷ (1 + inflation) − 1.

Growth scenarios

Growth scenarios: base — the average annual growth over an unbroken run of at least 3 years; conservative and optimistic — the 25th and 75th percentiles of the year-on-year changes.