Using a short-term rental spreadsheet to track rental income and expenses is a handy way to stay on top of your bottom line and understand where your business is heading.
From utilities and supplies restocking to property management fees or marketing costs, there are plenty of expenses to track. If you miss an expense, it could impact your budget, leaving you with less cash flow than you anticipated.
So, to help you make sense of the numbers and prevent any issues down the line, it is a good idea to use some type of short-term rental spreadsheet. Read on to find out how a short-term rental spreadsheet can help you make better financial decisions and which metrics are worth keeping an eye on.
A template that you create in Google or Excel is one of the most cost-effective ways to access all the information that you need in one place. Here is how a short-term rental spreadsheet can help you to simplify the financial side of running a short-term rental business:
From routine cleanings to monthly mortgage payments to maintenance tasks, there are many different expenses that you need to pay and track. So, it is quite easy to miss an expense, especially when it comes to one-off expenses. A short-term rental spreadsheet will help you to allocate your operating costs helping to streamline your bookkeeping.
One of the main advantages of using a short-term rental spreadsheet is that you can get a comprehensive picture of your expenditure. This makes it much easier to see which items you spend the most on and identify areas where you can save.
You can also use it to get a breakdown of your earnings per month or property. This way, you can better understand seasonality and adapt your plans and pricing strategy accordingly.
To know the health of your business, you need to have data available that you can measure. Without accurate numbers, it becomes a guessing game, and you won’t be able to tell if your investment is indeed paying off.
If you have a short-term rental spreadsheet that you filled in throughout the year, tax season will be a lot less stressful. Armed with your worksheet, you do not have to work out all your numbers from scratch manually. All in all, it will help you to save loads of hours you would otherwise have to spend on admin work.
As things stand, does it make sense for you to apply for a loan to acquire another property? Regular analysis of your rental income will help you to determine if you are ready to grow your portfolio. It will also help you decide on how much money you can potentially invest in a new vacation rental property.
There are several critical metrics that hosts and property managers should keep an eye on. To help you get a balanced overview, here’s what you need to include in your short-term rental spreadsheet to stay on top of things.
To work out your gross income per property, you simply add up all the income that a specific property has generated. If you sell other extra services, such as guided tours or extra cleanings, to make more money, these amounts should also be included.
Your net income per property refers to the money that a property has brought in after you have subtracted property-related expenses like insurance, cleaning fees, etc. Simply put, to work out your net income per property, you use the gross income and subtract the operating expenses related to running the property.
It gives you much better insight into your expenditure. If there is a significant difference between the net income and total revenue, it is important that you take a closer look at your expenditure.
RevPar is short for revenue per available room. It is a straightforward metric that gives a more detailed picture than you would get by simply looking at your occupancy and average daily rate separately. Not only can it help you to compare the performance of your business to that of your competitors, but it is also useful if you manage multiple properties and want to see how your different properties stack up against one another.
To calculate your RevPar, you need to divide your gross rental revenue by the total number of available properties for a specific period. Alternatively, you can also multiply the occupancy rate by the average daily rate.
Your average occupancy rate can help to identify if you are pricing your rentals correctly. It can also give you more insight into the overall performance of your rentals. To evaluate your occupancy rate, it is key that you compare it to the average for the area. If it is significantly lower than the benchmark for your area, it could be an indication that you are priced too high 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.
When measuring your average daily rate, it is crucial to remember that it does not take into account your operating costs. So, it should only be used to give you better insight into the earnings potential of the property.
To calculate your average daily rate, you divide the total revenue that a specific property’s reservations generated by the total number of nights booked.
The nights booked metric refers to the number of nights that your property has been booked throughout the year. This metric is critical if you are located in an area that limits a rental’s number of booked nights per calendar year.
To work out this number, you can refer to the vacation rental platform that you use. Alternatively, you can use vacation rental software which will consolidate the number of confirmed reservations for the current month in addition to other essential metrics (total revenue, ADR, etc.) via its dashboard.
To work out your nights vacant, you subtract the nights booked from the number of available nights. This will give you a good idea of the overall health of your business and can be useful if you need to adhere to a maximum number of nights that you are allowed to rent out your property per calendar year.
It is good to have an estimation of the revenue you are planning to generate. This number will help you to get an understanding of how your business is progressing in terms of revenue.
While employing a short-term rental spreadsheet is a tried-and-tested way to track your finances, it still requires a great amount of manual work. And it’s a known fact that manual work is prone to human error.
Automating the process of monitoring your income and expenses can eliminate manual tasks and ensure that no pesky error will sneak in. For example, vacation rental software like iGMS enables hosts and property managers to track metrics relating to the performance of their business as well as guest communication within a unified Dashboard.
It also offers PROtrack – a unique guest communication productivity tracking toolkit to make sure your guest support agents never drop a ball.
The iGMS Dashboard provides a clear-cut overview of the following metrics:
On top of helping you to track your metrics, iGMS also offers a host of other features that include calendar synchronization, cleaning management, message automation, direct booking management, and other useful features.
About the Author
Olga Vasylieva is the Content and Social Media Team Lead at iGMS. Olga is on a mission to help hosts and property managers grow their businesses and deliver an excellent guest experience. She is a travel enthusiast and is inspired by life in all its aspects.
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