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Do you have a zombie property?
A zombie property is a short-term rental that stays booked while returning almost nothing on the cash you put into it. It looks alive from the outside and drains cash on the inside.
You know your occupancy rate. You know what's booked next weekend. Now answer this: What did the property return this year on the money you put into it?
The Number That Answers It
Cash-on-cash return (CoC) divides your annual pre-tax cash flow, after the mortgage payment, by the cash you put into the property: Down payment, closing costs, renovations, furnishing, all of it. It answers 1 question: For every dollar you put in, how much came back this year?
A property that clears $12,000 a year after the mortgage, on $100,000 of cash invested, returns 12%. Cap rate ignores the mortgage, and return on investment (ROI) can include appreciation you can't spend.
Investors commonly use 8 to 12% as the benchmark. Below 0%, the property costs you cash to own instead of paying you.
What Changed Since You Last Checked
AirDNA's midyear outlook has 3 numbers worth knowing:
- Occupancy: Forecast to average 57.4% in 2026, above the pre-pandemic average of 57%.
- Revenue per available rental (what a listing earns per night it's open for booking): Forecast to grow 2.9%, with higher nightly rates accounting for almost all of that.
- Nightly rate growth: Climbed from 0.7% in January to about 3% by spring.
If your nightly rate hasn't changed since last year, you're missing the part that drives revenue growth.
Fees changed too:
- Airbnb: By September 15, it had put every host on a single 15.5% fee.
- Vrbo: Its commission switches to a flat 12% on October 29.
What This Means For You
On a listing that grosses $60,000 a year, each point of platform fee costs $600. With $100,000 put into the property, that's 0.6 points of cash-on-cash return for every point of fee. Last year's number used last year's fees.
A weak number calls for a decision, and selling is only 1 of them:
- Refinance
- Switch to mid-term rental (30-plus-day stays)
- Change management
- Sell
You can't pick the right one without knowing where you stand.
Does It Pencil is our complimentary calculator for this. Enter what you paid, your current nightly rate, occupancy, and expenses, and it returns cash flow, ROI, cap rate, and break-even analysis.
GET YOUR REAL RETURN FROM NUMBERS YOU ALREADY HAVE →
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Taxes, benefits, employer contributions, and compliance costs can add up quickly, and vary by country.
Use Oyster's free calculator to estimate what a global hire could really cost, so you can build a more accurate hiring budget and avoid surprises.
