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Do you have a zombie property
Do You Have a Zombie Property?
You know your occupancy rate. You know what's booked next weekend. But if someone asked you right now what your actual return is on the money you put into this property, could you answer?
The Number That Actually Answers This
Cash-on-cash return (CoC) divides your annual pre-tax cash flow by the actual cash you put into the property, down payment, closing costs, renovations, furnishing, all of it. It answers one specific question: For every dollar you put in, how much came back this year, unlike cap rate, which ignores financing, or ROI, which counts appreciation you can't spend.
8 to 12% or higher is healthy. Below that, you're underperforming. Below 0%, you're paying every month to own a property that's supposed to be paying you.
If you can't answer this right now, that's something to really sit with. It's been letting the property bleed money for years while you keep believing the calendar.
Why This Is Showing Up More Right Now
US short-term rental listings are projected to hit 1.77 million in 2026, up from 1.69 million last year, while demand growth is expected to slow to 4.1%, a sharp drop from the 20%-plus supply growth pace seen at the 2021-2022 peak. More supply, slower demand, that combination is exactly what turns a good property into a bad one.
In oversaturated markets, the gap between top and bottom performers is widening fast. Some bottom-quartile listings are pulling in a fraction of what top performers earn on the exact same nights and in the exact same market.
A weak number doesn't automatically mean sell. It means something needs to change, think refinance, a switch to mid-term rental, new management, or an exit. You can't pick the right one without knowing where you truly stand.
Does It Pencil is a free calculator built to run your CoC return for you. Plug in the purchase price, your actual nightly rate, occupancy, and expenses, and it hands you cash flow, cap rate, cash-on-cash return, and breakeven occupancy, all pulled from your real numbers instead of a spreadsheet you have to build yourself.
