Profit First for STR Hosts: Simplify Your Finances in 2025

Running a short-term rental (STR) is a unique business that blends hospitality, real estate, and operational tasks such as cleaning and property management. Unlike traditional businesses, STRs face fluctuating revenue (think summer spikes vs. winter lulls), high turnover costs ($50-$150 per cleaning), and tax complexities. That’s why Profit First, the cash flow system by Mike Michalowicz, and its real estate adaptation by David Richter, Profit First for Real Estate Investing, is a game-changer for STR hosts. At the National Short-Term Rental Association (NSTRA), we’ve seen Profit First transform businesses, including our own portfolio of STRs, cleaning companies, and real estate ventures. Inspired by wisdom like Proverbs 21:5 (“The plans of the diligent lead surely to abundance”), this blog shows you how to implement Profit First for your STR in 2025, with a free tracker to simplify your finances. Plus, learn how your success can support Mickey’s House Foundation’s $50 million Foster Village for foster youth: mickeyshousefoundation.org.

Why Profit First for STRs?

Traditional accounting (Revenue - Expenses = Profit) often leaves STR hosts scrambling for taxes or growth funds. Profit First flips this, prioritizing profit first: Revenue - Profit = Expenses. By allocating income to designated accounts (Profit, Owner’s Pay, Taxes, Operating Expenses) before spending, you ensure financial clarity and avoid cash flow traps. David Richter’s Profit First for Real Estate Investors tailors this for property businesses, emphasizing STRs’ unique needs:

• Seasonal Revenue: STRs earn 60-80% of their income in peak seasons (e.g., summer, per AirDNA). Profit First saves profits year-round.

• High Turnover Costs: Cleaning ($50-$150/turnover) and maintenance ($500-$2,000/year) eat cash. Profit First budgets proactively.

• Tax Complexity: STRs face federal, state, and local taxes (15-30% of income). Profit First preps funds to avoid IRS surprises.

NSTRA’s founder, a Profit First practitioner and alum of Michalowicz’s Run Like Clockwork group, uses Relay Bank’s free business accounts to streamline allocations for STRs, cleaning companies, and real estate flips. Each entity can have up to 20 free accounts attached to it, each allocated towards a specific Profit First account. “It’s like Proverbs 16:3—commit your work to the Lord, and your plans will be established,” they say. “Profit First brings that clarity.”

How to Implement Profit First for Your STR

Follow these steps, inspired by Michalowicz and Richter, to set up Profit First for your STR, ensuring profitability and supporting causes like Mickey’s House Foundation.

1. Open Dedicated Bank Accounts 

   • Use Relay Bank (relayfi.com, $0, up to 20 free accounts per entity) to create accounts for each STR or entity (cleaning, real estate, whatever):

     • Profit: 5-10% for future growth (e.g., new properties, Village donations).

     • Owner’s Pay: 20-50% for your salary.

     • Taxes: 15-30% for federal, state, local taxes.

     • Operating Expenses: 30-50% for cleaning ($50-$150), utilities ($50-$200), software (e.g., Turno, $10-$20/listing).

     • Tithing: 10% to God by way of your favorite charity.

   • Example: A $1,000 booking allocates $50 Profit, $250 Owner’s Pay, $200 Taxes, $400 Expenses, and $100 to Charity.

   • NSTRA Tip: Start Relay via nationalshorttermrentalassociation.com for setup guides.

2. Set Allocation Percentages

   • Assess your STR’s financials (use AirDNA, $30-$100/month, for revenue data). Start with Richter’s real estate benchmarks, adjusting for STRs:

     • Small STRs (1-3 properties): 5% Profit, 50% Owner’s Pay, 15% Taxes, 30% Expenses.

     • Large STRs (4+ properties): 10% Profit, 30% Owner’s Pay, 20% Taxes, 40% Expenses.

   • Review quarterly, like The Road Less Stupid’s Thinking Time, to tweak percentages.

3. Automate Transfers Weekly 

   • Set Relay Bank to auto-transfer income (e.g., Airbnb payouts) weekly to accounts. For a $5,000 week:

     • Tithing: $500 (10%)

     • Profit: $250 (5%)

     • Owner’s Pay: $1,250 (25%)

     • Taxes: $1,000 (20%)

     • Expenses: $2,000 (40%)

   • This ensures taxes are saved and profits grow, avoiding cash flow crunches.

4. Track Monthly with NSTRA’s Free Tool 

   • Download our free Profit First STR Bookkeeping Tracker (below) to log allocations and monitor financial health, just like your favorite STR trackers for cleaning or pricing.

   • Example: “Saved $1,000 in Taxes via Relay, donated $200 to Mickey’s House.”

5. Cut Expenses Ruthlessly 

   • Profit First forces lean operations. Use NSTRA’s tools to save:

     • Turno ($10-$20/listing) for cleaning schedules, cutting labor costs 10-20%.

     • DPGO ($7/month) for pricing, boosting revenue 15-40%.

   • Reinvest savings into growth or nonprofits like Mickey’s House Foundation.

Free Profit First STR Bookkeeping Tracker

To make Profit First easy, NSTRA offers a free 2-page PDF, Profit First STR Bookkeeping Tracker, designed for STR hosts, property managers, and real estate investors. Features:

• Account Allocation Table: Track Profit (5-10%), Taxes (15-30%), etc., per booking.

• Relay Setup Checklist: Steps to open accounts for STRs, cleaning, or flips.

• Monthly Financial Tracker: Log revenue, savings, and donations (e.g., to Mickey’s House).

• Faith Note: Inspired by Proverbs 21:5, “Diligent planning leads to abundance.”

Get It Now: Enter your name and email at nationalshorttermrentalassociation.com to download for free.

Join NSTRA’s Community for More

Want to dive deeper? Join our First Friday Interview on [Date, e.g., May 2, 2025] with [Guest, e.g., a Profit First CPA] to learn financial strategies for STRs. Register at nationalshorttermrentalassociation.com. Refer friends to our newsletter for a chance to win a $50 Amazon gift card or Turno subscription: [Referral Link].

At NSTRA, we’re committed to empowering hosts, like Colossians 3:23’s call to “work heartily for the Lord.” Our business donates 10% to nonprofits like Mickey’s House Foundation, building homes for foster youth, and Phoenix Rescue Mission. Learn how your STR success can make a difference: mickeyshouse.org.

Take Action: Download the Profit First STR Bookkeeping Tracker, set up Relay Bank, and join NSTRA’s community to simplify your STR finances in 2025. With Profit First, you’ll not only grow your business but also live out Proverbs 16:3—committing your work to the Lord for lasting success.