Using a short-term rental spreadsheet to monitor rental revenue and costs is a great way to keep on top of your finances and see where your company is.
There are many expenditures to keep track of, from electricity and supplies to property management fees and marketing charges. If you forget to pay for anything, it might negatively influence your budget, leaving you with less cash flow than you expected.
It’s a good idea to utilize a short-term rental spreadsheet to assist you in making sense of the statistics and avoid any complications down the road. Continue reading to see how a short-term rental spreadsheet may assist you in making smarter financial choices, as well as which variables to monitor.
What Are the Advantages of Using a Rental Spreadsheet for a Short-Term Lease?
One of the most cost-effective methods to get all of the information you need in one place is to construct a template in Google or Excel. A short-term rental spreadsheet may assist you in simplifying the financial part of operating a short-term rental company in the following ways:
1. Make Sure you Don’t Overlook Any Company Costs
You must pay and manage several expenditures, ranging from basic cleanings to monthly mortgage payments and maintenance activities. As a result, it’s pretty simple to overlook an item, particularly when it comes to one-time expenditures. A spreadsheet for short-term rentals can assist you in allocating your running expenses and streamlining your accounting.
2. Make a Clear Picture of your Income and Spending
One of the key benefits of utilizing a short-term rental spreadsheet is that it allows you to get a complete picture of your expenses. This makes it a lot simpler to understand what you spend the most money on and where you may cut costs.
You may also use it to receive a monthly or property-by-property breakdown. As a result, you will have a better understanding of seasonality and will be able to change your strategies and pricing approach appropriately.
3. Monitor the Progress of Your Company
You’ll need data to monitor your company’s health to determine how it’s doing. Investment is paying off if you don’t have correct statistics.
4. File Your Tax Return
Tax season will be much less stressful if you have a spreadsheet for short-term rentals that you filled out throughout the year. You won’t have to recalculate all of your figures manually if you have your worksheet. Overall, it will save you a significant amount of time that you would otherwise spend on administrative tasks.
5. Plan Your Investing Plan and Make Projections
Is it practical for you to apply for a loan to purchase another home at this time? You can assess whether you’re ready to expand your portfolio by analyzing your rental revenue regularly. It will also assist you in determining the amount of money you can invest in a new vacation rental home.
What Should Information Be Included in a Spreadsheet for Short-Term Rentals?
Hosts and property managers should monitor several vital parameters. Here’s what you need to add to your short-term rental spreadsheet to remain on top of things to assist you in obtaining a balanced outlook.
1. Property’s Gross Revenue
Sum up all of the money a given property has earned to get your gross income per property. If you want to generate more money, you could mention any additional services you offer, such as guided tours or extra cleanings.
2. Gross Rental Income
The money that a property brought in after you deducted property-related charges like insurance, cleaning fees, and so on is referred to as net income per property. As explained, you utilize the gross revenue and remove the operational expenditures associated with running the property to get your net income per property.
It provides you with a far more detailed picture of your spending. If the discrepancy between net income and total revenue is considerable, you should examine your expenditures more closely.
3. RevPAR (Revenue Per Available Room)
Revenue per available room is referred to as RevPar. It’s a simple measure that provides more information than individually looking at your occupancy and average daily fee. It may not only help you compare your company’s performance to that of rivals, but it can also be handy if you manage many properties and want to see how they compare.
Divide your gross rental income by the total number of available properties for a given time to arrive at your RevPar. You might also multiply the occupancy rate by the daily average rate.
4. Occupancy Rate Average
Your average occupancy rate might assist you in determining whether or not you are appropriately pricing your rentals. It may also help you better understand your rentals’ overall performance. It is critical to compare your occupancy rate to the area’s average while evaluating it. If it’s much lower than the local benchmark, it might mean you’re underpricing your property or vice versa.
Divide the number of booked nights by the number of available nights and multiply by 100 to get the average occupancy rate.
5. Daily Rates Average
The average daily rate excludes your running expenditures while calculating it to understand better the property’s earning potential.
Divide the entire money earned by a single property’s bookings by the total number of nights booked to arrive at your average daily rate.
6. Scheduled Nights
The nights booked measure indicates how many nights your property has been rented over a year number of booked nights per calendar year is restricted; this measure is significant.
You may utilize the vacation rental program you’re using to figure out this amount. You may also employ vacation rental software, which will combine the number of confirmed bookings for the current month as well as other essential indicators (total income, A.D.R., and so on) on its Dashboard.
7. Unoccupied Nights
Subtract the nights booked from the total available nights to determine your nights vacantly. This will give you a decent picture of how well your company is doing overall, and it will come in handy if you have a limit on how many nights you may rent out your home each year.
8. Revenue Expectations
It’s a good idea to have a rough idea of how much money you’ll be making. This figure will assist you in determining how well your company is doing financially.
How to Make Tracking Your Profits More Efficient
While using a short-term rental spreadsheet to manage your money is a tried-and-true method, it still requires a significant amount of human labor. Furthermore, physical work is considered to be prone to human mistakes.
Automating your revenue and spending tracking eliminates manual duties and ensures no errors slip through the cracks. For example, vacation rental software such as Lodgable allows hosts and property managers to measure data related to their business’s success and guest interactions from a single dashboard.
Lodgable not only helps you measure your KPIs, but it also has several other vital functions, such as calendar synchronization, cleaning management, message automation, and direct booking management.
