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A

• ADR (Average Daily Rate) – The average revenue earned per booked night, calculated as total revenue ÷ number of booked nights.
• Accrual Accounting – A method where income and expenses are recorded when incurred, not when cash is received or paid.
• Amenity Fees – Additional charges for property features (e.g., pools, hot tubs, pet stays).
• Arbitrage (Rental Arbitrage) – Leasing a property and subleasing it as a short-term rental for profit.
• Asset Depreciation – The gradual decrease in value of a property or its assets, which can be deducted for tax benefits.
• Average Occupancy Rate (AOR) – The percentage of available nights that are booked over a given period.

B

• Base Rate – The default nightly rate before any pricing adjustments.
• Booking Engine – Software that allows guests to book directly from a property’s website.
• Booking Revenue – The total income generated from guest stays before expenses.
• Booking Window – The time between when a reservation is made and the check-in date.
• Breakage – The cost of damaged or missing items, often covered by deposits or insurance.
• Break-Even Point – The point where total revenue covers total expenses, meaning no loss or profit.
• Bridge Loan – A short-term loan used for financing a property before securing long-term funding.
• Buy and Hold Strategy – An investment approach where a vacation rental is purchased for long-term appreciation and rental income.
• Buyout (Property Buyout) – When a guest or company books an entire property for an extended period.

C

• Cancellation Policy – Terms for when a guest can cancel and receive a refund, ranging from flexible to strict.
• Cap Rate (Capitalization Rate) – A profitability metric calculated as Net Operating Income (NOI) ÷ Property Value.
• Cash-on-Cash Return (CoC) – A measure of investment return, calculated as Annual Cash Flow ÷ Initial Cash Investment.
• Channel Manager – A tool that syncs listings across multiple OTAs (Airbnb, Vrbo, Booking.com) to prevent double bookings.
• Chargeback – A disputed credit card transaction that can result in a refund loss for property managers.
• Chargeback Risk – The potential for fraudulent or unjustified disputes leading to revenue loss.
• Cleaning Expense Ratio – The percentage of revenue spent on cleaning services.
• Cleaning Fee – A one-time fee charged to guests to cover turnover costs.
• Co-Hosting – A service where a co-host helps manage a rental for a property owner.
• Commission Fee – The percentage taken by an OTA or property manager from booking revenue.
• Concierge Services – Personalized services for guests, such as tours, transportation, or groceries.
• Cost Segregation – A tax strategy that accelerates depreciation on certain property components.
• Credit Card Processing Fees – Transaction fees for guest payments, typically 2.5%–3.5%.

D

• Damage Waiver – A non-refundable fee covering minor accidental damage instead of a security deposit.
• Debt Service Coverage Ratio (DSCR) – A metric comparing Net Operating Income (NOI) to total debt payments (often required for STR loans).
• Debt-to-Income Ratio (DTI) – A metric showing how much of an investor’s income is used for debt payments.
• Direct Booking – A reservation made directly with the host, avoiding OTA commission fees.
• Dynamic Pricing – A strategy where rates adjust automatically based on demand and market trends.
• Dynamic Pricing Revenue Growth – The percentage increase in revenue due to automated pricing adjustments.

E

• Early Check-In / Late Check-Out – An option for guests to arrive early or leave late, sometimes for a fee.
• Equity Build-Up – The increase in property ownership as mortgage payments reduce principal.
• Exit Strategy – A planned approach for selling or repurposing a vacation rental investment.
• Expense Ratio – A financial metric showing Total Operating Expenses ÷ Gross Revenue.
• Extended Stay – A booking of 30+ days, often governed by different regulations.
• Experience-Based Rentals – Properties marketed based on unique experiences, such as wellness retreats or adventure stays.

F

• Fees Breakdown – A detailed list of charges (rental rate, cleaning, service fees, taxes).
• Fixed Expenses – Costs that remain constant regardless of occupancy (mortgage, insurance, property taxes).
• Free Cash Flow (FCF) – The cash remaining after all expenses, including debt payments.
• Furnishing Costs – The upfront investment in furniture and appliances.

G

• Gap Night – A single vacant night between bookings, often discounted to encourage last-minute bookings.
• Gross Rent Multiplier (GRM) – A valuation method, calculated as Property Price ÷ Gross Annual Rent.
• Gross Revenue – The total income generated before expenses are deducted.
• Guest Communication – The process of interacting with guests before, during, and after their stay.
• Guest Experience – The overall satisfaction of a guest based on property quality, service, and amenities.

H

• Holding Costs – Ongoing expenses incurred while a rental is vacant.
• Hosting Agreement – A contract between a property owner and a manager outlining responsibilities.
• House Manual – A guide for guests with property rules, WiFi details, and local recommendations.
• Housekeeping Schedule – A cleaning rotation for turnovers between guest stays.

I

• Income-to-Rent Ratio – A metric used to evaluate affordability.
• Instant Book – A feature allowing guests to book without host approval.
• Interest-Only Loan – A loan where the borrower pays only interest for a period, reducing short-term costs.
• Internal Rate of Return (IRR) – A comprehensive investment metric factoring in appreciation and cash flow.

L

• Leverage – Using borrowed capital to increase the potential return on investment.
• Loan-to-Value Ratio (LTV) – A lending metric measuring the loan amount relative to the property’s value.
• Local Ordinances – Laws regulating short-term rentals in specific cities or counties.

M

• Management Fee – The percentage of revenue paid to a property manager.
• Mortgage Reserve Requirement – The number of months of mortgage payments lenders require investors to have in savings.

N

• Net Income Margin – A profitability metric calculated as (Net Profit ÷ Total Revenue) × 100.
• Net Operating Income (NOI) – A key investment metric, Total Revenue – Operating Expenses.

P

• Passive Income – Rental income earned with minimal active involvement.
• Property Tax Assessment – The valuation process by local authorities determining tax obligations.
• Profit & Loss (P&L) Statement – A financial report tracking revenue, expenses, and profit.

R

• Return on Investment (ROI) – A profitability metric calculated as (Annual Net Profit ÷ Total Investment) × 100.
• Revenue Per Available Night (RevPAN) – A refined revenue metric factoring in booked and unbooked nights.

S

• Short-Term Rental Loan – A mortgage product designed for vacation rental investors.
• Smart Pricing – Automated tools that adjust rental rates dynamically.
• Syndication – A real estate investment structure where multiple investors pool funds to acquire STR properties.

T

• Tax Deductions – Eligible expenses that reduce taxable income.
• Trust Accounting – A method for managing owner funds separately in STR operations.

U-Z

• Upside Potential – The potential for increased revenue through property improvements.
• Vacation Rental REIT (Real Estate Investment Trust) – A publicly traded company owning vacation rentals.
• Yield Spread – The difference between an STR investment’s return and its cost of financing.