Most people underwrite an STR deal by staring at the Airbnb comps and vibes. That's how you end up upside down in year one.

Here are the 3 numbers I check before anything else, in order:

1. Break-even occupancy. Take your total monthly expenses (mortgage, utilities, cleaning, management, supplies) and divide by your average nightly rate. That tells you how many nights a month you need booked just to not lose money. If break-even occupancy is above 55-60%, the deal has almost no margin for a slow season, walk away or renegotiate.

2. Cash-on-cash return. Annual cash flow ÷ total cash invested (down payment + closing costs + furnishing/reno). This is the real return on the money you actually put in, not the purchase price. Anything under 8% on a market with STR regulatory risk isn't worth the operational headache.

3. DSCR (debt service coverage ratio). Net operating income ÷ annual debt service. Most lenders want 1.0-1.25 minimum. If your own numbers come in under 1.2, you have zero cushion for a bad month, a slow winter, or a surprise repair.

Run every listing through these three before you fall in love with the photos. Underwriting discipline is the difference between an asset and a liability that happens to look nice on Instagram.