Full financial model for Puerto Rico short-term rental deals
Act 60 Decree
75% property tax exemption
NOI
$16,332
Annual
DSCR
0.65x
Below Threshold
Cap Rate
3.84%
On total cost
Cash-on-Cash
-6.77%
Annual return
DSCR of 0.65x is below the minimum 1.10x threshold. Deal may not qualify for conventional financing. Adjust assumptions.
| # | Line Item | Annual |
|---|---|---|
| A | Gross STR Revenue (Potential)($158/night × 365) | $57,670 |
| B | Less: Vacancy & Seasonality Loss(29% vacancy) | ($16,724) |
| C | Effective Gross Revenue (EGR)(A × Occupancy) | $40,946 |
| D | Plus: Other Income (Cleaning Fees)(104 bookings × $45) | +$4,680 |
| E | Total Operating Income(C + D) | $45,626 |
| Operating Expenses: | ||
| F1 | Platform Fees (Airbnb/VRBO)(3% of EGR) | $1,228 |
| F2 | Property Management(22% of EGR) | $9,008 |
| F3 | Utilities (Electric, Water, Internet) | $2,400 |
| F4 | Insurance (Hazard + Flood + STR) | $6,900 |
| F5 | CRIM Property Taxes | $3,613 |
| F6 | STR License & Municipal Fees | $850 |
| F7 | Repairs & Maintenance(6% of EGR) | $2,457 |
| F8 | Furnishing Replacement Reserve(4% of EGR) | $1,638 |
| F9 | G&A / Accounting / Misc | $1,200 |
| G | Total Operating Expenses(Sum F1–F9) | $29,293 |
| H | Net Operating Income (NOI)(E − G) | $16,332 |
| I | Annual Debt Service($2,080/mo) | $24,962 |
| J | Debt Service Coverage Ratio (DSCR)(H ÷ I) | 0.65x |
| K | Annual Cash Flow(H − I) | $-8,630 |
| L | Cash-on-Cash Return(K ÷ $127,500 equity) | -6.77% |
| M | Cap Rate(H ÷ $425,000 total cost) | 3.84% |