Short Term Rental Regulatory Risk Calculator

STR rules change. This calculator sizes risk.

STR annual NOI

LTR alternative NOI

Exit cap rate %

Restriction probability %

Time horizon years

Risk-adjusted value

$2,264,417

STR-only value

$2,571,429

LTR fallback value

$1,214,286

How the math works

Annual prob = restriction over horizon. Risk-adj value = (1 − prob) × STR value + prob × LTR value.

STR value $2.57M, LTR $1.21M. 25% horizon risk → risk-adj $2.23M. $340k value discount for regulatory risk. Buyers price in.

How to Use

Enter STR annual NOI.
Enter LTR alternative NOI.
Enter exit cap rate.
Enter probability of restriction %.
Enter time horizon years.
Read risk-adjusted value.

Frequently Asked Questions

What restricts?

Ban on STR (NYC 2023: no under-30-day rentals absent hosts on-site). Permit limitations. Occupancy taxes. HOA restrictions. State-level restrictions. Each reduces STR economics. Monitor municipal and state regulatory environment.

LTR alternative?

If STR forbidden: convert to long-term rental. Typically 40-60% lower revenue in touristic markets. Some properties convert easily (apartments); others purpose-built for STR (vacation homes with amenities) suffer more conversion value loss.

Pricing?

Buyers increasingly discount STR assets for regulatory risk. 50-100 bps cap rate premium on STR-dependent properties. LTR-ready properties trade tighter. In jurisdictions with pending regulation: 200-300 bps premium possible.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.