The pro forma adds $1,300 a month gross. I end up with $480.

Your arithmetic is fine. The pro forma underneath it has three soft spots.

First, occupancy. 72 percent from her own units tells you what her operation achieved on her inventory, not what your unit achieves in year one with no review history. A new listing typically prices below market to buy its first reviews, so month one to three revenue tends to run under the stabilized figure. Ask her for the calendar year of gross booked revenue on the two units in her book closest to yours in size and location, month by month, not an average. If she won't show monthly detail, the 72 percent is a marketing number.

Second, seasonality. A monthly average hides a distribution. Hospital-adjacent demand is steadier than leisure, and that may work in your favor, but you need the shape of the year to know whether two slow months erase the $480 spread.

Third, the fee base. "18 percent of gross" needs a definition in writing. Gross of cleaning fees collected? Gross of occupancy taxes collected and remitted? Those pass through your ledger without being income to you, and if they sit inside the fee base your effective rate on real revenue is higher than 18 percent.

The furnishing spend is capex with a replacement cycle, not a one-time cost. Soft goods on a nightly-turnover unit get replaced far faster than in a long-term rental, so carry a monthly reserve against the $14,000 rather than treating month 33 as pure profit.

And the whole comparison depends on whether the use is permitted. Short-term rental rules are set locally and vary market to market, and your HOA can restrict it independently of the city. Read both unread amendments before you price anything.

I rebuilt it the way I'd underwrite it. Take the 72 percent to 60 for year one and hold the $135 rate, that's $2,430 gross. Fee at 18 percent of $2,430 is $437. Your fixed and variable costs mostly don't shrink with occupancy, utilities and HOA and insurance stay put, so call the deduction $1,170. Net $1,260. That's $55 a month over the lease.

Then add a furniture reserve. $14,000 replaced on a five year cycle is $233 a month. Now you're $178 behind long term until occupancy proves out.

I'm not saying 60 percent is the right number. I'm saying your decision is entirely a bet on the occupancy input, and you're taking that input from the person collecting the fee.

If the whole prize is $480 a month before the furniture wears out, I'd re-sign the tenant and keep my weekends.

Beginner question that's actually mine, not a rhetorical one. What is the co-host physically doing for the 18 percent? Everything I read says guest messages and pricing, and both of those sound like software now. @marlow did she give you a list of what she handles versus what still lands on you? I'd want that written out before I compared any numbers, because "hands off" seems to mean different things to different people.

Ask what she does when the city changes the rules mid-year. That answer tells you more than the occupancy figure.

I read your post twice and the part that stuck was the $1,200 setup fee on top of the $14,000. If she's sourcing the furniture and marking up the setup, ask whether she takes anything from the suppliers as well. Also, what happens to the furniture if she quits in month four. You've bought a fully furnished condo at that point and either you find another co-host, run it yourself, or sell a house full of stuff at a loss to go back to long term. That third path is the one nobody prices.

The cleaning pass-through isn't neutral and I'd push back on that line hard. A $95 cleaning fee on a two night stay is a 35 percent add to the guest's total, which suppresses short bookings and pushes your mix toward longer stays. That's fine, it's just a different business than 22 nights at $135. Also, guest-paid cleaning becomes yours whenever there's a gap turn, an owner stay, or a cancellation you still have to clean after.

And if her 18 percent is calculated on the total the guest paid, she's earning $17 a month off the cleaning fee you never see. Small, but it tells you how the contract was drafted.

$14,000 to furnish a two bedroom is the number before anyone has been inside the unit. I've never seen a furnishing budget land where it started. You'll find the second bedroom needs blackout coverings, the sofa she picked doesn't fit the stairwell, the kitchen has four of one thing and none of another, and the smoke and CO detector placement for a rental permit inspection is not where a long-term tenant left them. Budget 20 to 25 percent over her quote and if it comes in at $14,000, congratulations. My scope creep on a similar setup was $3,800 of things that each sounded like $200.

Two years ago I'd have told you to do it. I run three nightly units and my average rate is down from where it started because six more listings opened within a mile of mine. Occupancy held, rate didn't. That's the pattern I'd watch for, because a rate decline of $15 a night on your pro forma is $330 a month and your entire spread disappears.

So the question for her isn't what her units did last year. It's how many active listings your submarket had 12 months ago versus now. She should know that cold. If she doesn't track supply she isn't doing the pricing work you're paying a premium for.

What broke first for me at small scale was cleaning labor, not guests. One reliable person, then she got a full-time job, then three weeks of scrambling with same-day turns and a guest walked into a unit that wasn't done. @marlow ask her how many cleaners she has under contract and what her backup is on a Sunday in July. A co-host with one cleaner is a co-host with one point of failure, and you'll feel it through your reviews, which is the asset that sets your rate.

Line items I don't see in your list. Linens and towels at three sets per bed, which is real money and not furniture. A lockbox or smart lock. Starter consumables. A restocking run every month. Bank fees or a separate account so you can actually reconcile her statements. And the gap between your tenant leaving and your first booking, where you pay the mortgage, HOA and utilities with no revenue while the furniture arrives. Two to six weeks is normal, so add that as a real cost of switching.

There's also lodging or occupancy tax collection, which is set locally and varies by city and state. Some platforms collect and remit some of it and not all of it. Ask a tax professional in your state rather than the co-host.

Get the agreement and read it before you look at the pro forma again. The clauses that matter:

Fee base defined in dollars, with an example month written out. Termination on both sides, with notice period and whether existing bookings transfer to you or get canceled. Who holds the platform account and who owns the reviews. Exclusivity, meaning whether you can list on a second channel or take direct bookings yourself. Who authorizes repairs and up to what dollar amount without asking you. Who eats damage below the platform's coverage threshold. Indemnity language, because some of these put the owner on the hook for everything the co-host does on your behalf.

On the HOA, the two amendments you haven't read are the whole decision. A rental restriction adopted by amendment can reach existing owners or can grandfather them depending on the declaration and on state law, and that varies by state, so a real estate attorney in your state reading your actual documents is the only way to know which you are. Also check your loan documents for occupancy and use language and confirm in writing with your lender and your insurer before you list, because a landlord policy usually isn't written for nightly guests.

The vacancy month bothers me more than the fee. You're giving up $1,650 of certain rent to start a business whose first three months are the worst three months it will ever have. If I were doing it I'd want the furniture in and the listing live before the tenant's last day, which you can't do while they're living there...

Is there a version where you re-sign the tenant for one more year and spend that year checking her numbers against actual listings in your zip code? The decision doesn't expire.

I'm new enough that I had to look up what co-hosting even meant six weeks ago, so take the question as a question. When she says 18 percent of gross, is that gross before or after the platform takes its own cut? Because the platform fee comes out somewhere too, and if her 18 percent is on the full guest payment and the platform takes its slice as well, @marlow's $2,950 isn't what hits his account. That's the line I'd want spelled out in the example month @fathom described.

Don't spend $15,200 to make $480 a month on a unit where an HOA vote could end the whole business next spring!

I do thin margin work and I've learned the difference between a thin margin I control and a thin margin that sits behind someone else's permission. You control neither the occupancy input nor the HOA nor the city permit. Three switches, none of them yours.

A boring lease at $1,650 that renews for ten years beats an exciting one that needs a new sofa every three.

Call your insurer before you do anything else, and get the answer in writing rather than over the phone. A landlord policy priced for a 12 month tenant is a different product from what a carrier will write over nightly guests, and the $60 a month she guessed is a guess. I've seen the change come back as a rewrite rather than an endorsement, which resets your deductible and your coverage terms.

Same with the lender. Use and occupancy language in the note varies and you want to know what yours says before a permit application makes your plans public record with the city.

Ask her to put money in. If the 72 percent is real and she's confident, offer to split the furnishing spend, she carries $7,000 and takes 22 percent until she's repaid out of her share, then drops back to 18. Two things happen. You cut your exposure in half, and you find out fast whether she believes her own pro forma. Someone who will manage your risk for a fee but won't touch any of it has told you what she thinks the numbers are.

So, when everyone here says "gross," gross of what? Reading this thread I count at least four possible bases, the guest's total payment, the payment less platform fees, the payout after cleaning is stripped out, and the payout after taxes are remitted. Same 18 percent number, meaningfully different dollars.

@marlow if you do one thing before March 1, make her write out a real month. Guest paid X, platform took Y, cleaning was Z, tax was T, my fee is 18 percent of this specific line, you receive this. If the reply is vague, the answer to your whole post is the tenant.