Short-Term Rental Yield Analysis
Boulan South Beach · Residence 401
220 21st St # 401, Miami Beach FL 33139 · 1 Bed / 2 Bath · 829 sq ft · Built 2010
$649,000Other ViewShort-term allowed
STR revenue here is measured, not projected: our top-performing 1BR in this building, October 2025 to September 2026 (QuickBooks, net of tourist tax and platform fees). The scenarios below bracket it.
| STR revenue basis (our top-performing 1BR in this building, October 2025 to September 2026 (QuickBooks, net of tourist tax and platform fees)) | |
| Gross annual revenue — base case | $103,900 |
Self-managed short-term rental: you run pricing, guest messages, the listing and the cleaning crew yourself, so no management fee. Base revenue $103,900.
| Gross STR revenue | $103,900 |
| HOA ($1,950 × 12) | −$23,400 |
| Property tax (est., see below) | −$12,980 |
| Insurance (condo, STR) | −$2,000 |
| Cleaning (guest-paid, pass-through) | −$8,400 |
| Utilities + internet | −$2,640 |
| Supplies, turnover, reserves (~4%) | −$4,156 |
| Net operating income (NOI) | $50,324 |
Unlevered cap rate = $50,324 ÷ $649,000 = 7.8%.
No mortgage: the whole NOI is yours.
Held as a short-term rental with stays of 7 days or less on average, and with you materially participating, the first-year depreciation offsets your other income. Estimate, to be confirmed by a cost segregation study and your CPA.
| Depreciable basis (price less ~12% land share) | $571,120 |
| Reclassified to 5, 7 and 15-year property by cost segregation (~20%): furniture, appliances, finishes, dedicated systems, share of the amenities | $114,224 |
| Building shell, 39 years straight-line (full year) | $11,715/yr |
| Year-1 bonus depreciation (100%, IRC §168(k)) | $114,224 |
| Federal tax saved at 37% | ≈ $42,263 |
| Year 1 | Following years | |
| Cash flow, no mortgage (NOI) | +$50,324 | +$50,324 |
| Federal tax effect at 37% (depreciation − NOI; a negative figure is tax due on the rental profit) | +$23,643 | −$14,285 |
| Total return, before any appreciation | +$73,967 | +$36,039 |
| On the $668,470 cash in | +11.1% | +5.4% |
Without the tax effect the same unit returns +7.5% a year on the cash in. Year 1 assumes the unit is placed in service late in the year, so the shell starts depreciating the following year. That is about 6% of the $668,470 paid in cash, back in year one. Conditions: closed and bookable before 31 December for this tax year; average stay of 7 days or less; more hours than anyone else on the unit, logged (you on pricing, guests, the listing and your cleaning crew); no more than 14 days of personal use. The deduction is recaptured on sale unless you hold, exchange under §1031 or pass it on. How the Miami STR tax strategy works.
Bought in cash, no mortgage. Rents, charges and value grow 3% / 3% a year (assumptions, not a forecast). Sold at the end of year 5 with 7% selling costs; the depreciation taken is recaptured on sale.
| Cash in at closing (price + ~3% closing) | −$668,470 |
| Year 1: cash flow +$50,324, tax saved +$23,643 | +$73,967 |
| Year 2: cash flow +$51,834, tax paid −$14,844 | +$36,990 |
| Year 3: cash flow +$53,389, tax paid −$15,419 | +$37,970 |
| Year 4: cash flow +$54,990, tax paid −$16,012 | +$38,979 |
| Year 5: cash flow +$56,640, tax paid −$16,622 | +$40,018 |
| Sale year 5 at $752,369, less 7% costs ($52,666) | $699,703 |
| Tax on sale: furniture and equipment at their year-5 value (30% of cost) $12,679 at 37%, building depreciation $11,715 at 25%, capital gain $26,463 at 23.8% | −$50,857 |
| Net profit after tax over 5 years | $208,299 |
| Return after tax (IRR) · cash multiple | 6.4% · 1.31× |
| Same deal before tax, for comparison (IRR) | 8.7% |
| Same deal if value grows 5% a year instead of 3% (after-tax IRR · profit) | 7.8% · $262,113 |
| Exit through a §1031 exchange instead of a taxable sale: $38,178 of tax deferred into the next property (after-tax IRR · profit, +3% / +5%) | 7.4% · $246,477 9.2% · $317,099 |
This unit is profitable: from year 2 its rental income is taxed, so the after-tax IRR sits a little under the pre-tax one. The year-1 deduction still shelters that income and moves the tax to the sale, five years later and partly at the capital rates. The sale-price allocation to furniture and equipment is set with your CPA; a lower value moves more of the gain to the capital rates. In a §1031 exchange the whole real-estate tax (building recapture and capital gain) rolls into the replacement property, bought within 180 days through a qualified intermediary; the furniture and equipment share stays taxable, since personal property no longer qualifies (2018 law). Holding until death steps the basis up and erases the deferred tax. Not tax advice; your CPA confirms the numbers for your return.
Same $649,000. Only the STR revenue assumption changes (cap = NOI ÷ price).
I'll walk you through STR set-up, financing options, and run the live numbers for this unit.