Sandy Lee | Short-Term Rentals: How to Know If the Numbers Work

EPISODE 599: A short-term rental can look like a home run on a spreadsheet and still fail in real life. In today's market, building your strategy around best-case assumptions is one of the fastest ways to lose money.

So what does it actually take to know if a deal is worth buying?

In this episode of The Real Estate InvestHER Podcast, Liz sits down with Sandy Lee, a former corporate engineer who spent 30 years in engineering and construction and led the private equity arm of her firm. At 52, Sandy bought her first short-term rental, a four-bedroom ski condo in Steamboat, Colorado, for $1.3 million. That first property now cash flows around $5,000 a month. She went on to build a portfolio of short-term rentals across four states and retired two years later.

Sandy's approach to evaluating deals comes directly from her private equity background: instead of analyzing a snapshot in time, she builds a financial model that looks out 10 to 15 years. She factors in cash flow, appreciation, and mortgage paydown to calculate a true annualized return she can compare directly to stock market performance. Her returns range from the low teens to the mid-30s percent, on an annualized basis.

But the numbers are only part of the story. Sandy looks for what she calls the "special sauce," something specific happening in a market over the next few years that will push appreciation and demand in the right direction. With Steamboat, it was Aspen's acquisition of the resort, plans for a new gondola, and tightening regulations that reduced supply. She bought when the deal was only breaking even, knowing what was coming.

She also breaks down the operational side: the tech stack that cost her $125 a month and tripled her revenue, how she approaches regulations in every new market, and why she makes sure every property she buys would still cover its mortgage as a long-term rental, no matter what.

In this episode, you'll learn:

➡️ Why the numbers alone will not tell you if a deal is worth buying

➡️ How to spot the market "special sauce" that drives long-term growth

➡️ The private equity financial model Sandy uses to evaluate every deal

➡️ Why annualized return is the number that actually matters

➡️ How to think in 10 to 15-year windows instead of snapshots