Airbnb ROI Calculator
Compare short-term rental (Airbnb) cash flow vs long-term rental. ADR × occupancy − cleaning − fees − opex. STR-specific cost modeling. Free.
Airbnb ROI Calculator
Estimates short-term rental net income from ADR (Average Daily Rate) × occupancy %, deducts cleaning + platform fees + operating expenses + mortgage, and compares side-by-side to the equivalent long-term rental cash flow. Tells you whether the STR premium justifies the extra operating complexity.
Short-term rental (Airbnb)
Long-term rental
How to Use the Airbnb ROI Calculator
Pull realistic ADR + occupancy
Use a market-data service (AirDNA, PriceLabs, Wheelhouse) or comparable live listings for your specific ZIP code and bed count. Treat Airbnb's own "you could earn" estimate as a marketing figure, not an underwriting input. ADR and occupancy are the two inputs the whole comparison hinges on, so source both from the same market and season.
Charge cleaning fee = cost
Many operators charge a cleaning fee close to what they pay the cleaner, making it revenue-neutral. Charging less subsidises guests; charging much more hurts conversion. The tool keeps the two as separate inputs because the fee is revenue (and attracts the platform fee) while the pay-out is a cost.
Set realistic operating expenses
Short-term letting carries costs a long-term landlord never sees: utilities (always host-paid), Wi-Fi and streaming, consumables (toiletries, paper goods, coffee), STR-specific insurance, pricing and messaging software, local permit or registration fees, and a co-host or manager's cut if you outsource — quoted as a percentage of gross revenue, so get the contract figure. Enter the monthly total here; the tool does not assume a ratio for you.
Compare honestly to LTR
The STR-vs-LTR decision: is the extra net cash flow worth the operating complexity? STR is a hospitality business with guests, communications, cleaning logistics, seasonality and regulatory risk. LTR is comparatively passive. The verdict bar only calls STR "meaningfully" ahead when its gross revenue is at least 1.3× the LTR rent and its net cash flow is higher.
Airbnb / Short-Term Rental — A Hospitality Business, Not Passive Income
The Revenue Math
STR revenue = ADR × occupancy × 365 nights + cleaning fee × bookings, where bookings = booked nights ÷ average stay. With the tool's default inputs — USD 220 ADR at 65% occupancy — that is 237 booked nights, USD 143 per available night and USD 52,195 of room revenue a year, plus 79 bookings' worth of cleaning fees. The same property let long-term at the default USD 2,400 a month grosses USD 28,800. The catch is that the STR side then pays the platform fee, the cleaner and a much longer list of operating costs, so net cash flow does not scale with gross.
On the defaults, after platform fee, cleaning pay-outs, USD 900 a month of operating costs and the same USD 1,800 mortgage on both sides, the STR nets about USD 17,200 a year against the LTR's USD 0 — a premium that exists only because of the ADR and occupancy you typed in. Change occupancy to 45% and it shrinks to about USD 1,900. That sensitivity is the point of the tool: the answer is a function of two market inputs you must source honestly, not a property of short-term letting itself.
The Regulatory and Seasonal Risks
STR's biggest risks are regulatory and seasonal. New York City's Local Law 18 requires hosts of stays under 30 days to register with the Mayor's Office of Special Enforcement, and platforms have been barred from processing unregistered bookings since 5 September 2023 — in practice that removed most whole-home listings. Many other cities and resort towns run permit caps or zoning limits of their own. Check the ordinance for your specific address before buying with STR plans. Seasonality varies dramatically: Florida coastal markets see 90% summer occupancy but 30% in fall; ski-town STRs see December-March peaks then near-zero shoulder seasons. Model your specific market's seasonality rather than using flat annual occupancy.
Other operational risks: platform policy changes (Airbnb's "Trust & Safety" suspensions can be sudden), guest damage/parties (most operators carry STR-specific insurance like Proper or Slice), HOA restrictions (many condos ban STR), and lender restrictions (some mortgages prohibit STR use). Verify each of these before committing.
Airbnb's fee structure (Help Centre article 1857): under the split fee most hosts pay 3% of the booking subtotal and guests pay 14.1–16.5%; under the host-only fee most hosts pay 15.5%, typically 14–16%. The tool's 3% default is the split-fee host share — change it if your listing is on the host-only model.
The Operating Reality Most New STR Hosts Discover
Running an STR is recurring work, heaviest in peak season: guest communication, pricing adjustments, cleaning coordination, restocking, complaints, damage claims and review management. Full-service co-hosts and managers absorb most of it for a contracted share of gross revenue — put that share into the monthly opex field and re-run, because it is usually the single largest line after the mortgage and it is the one most first-time hosts leave out.
Airbnb's 3% host fee, New York's registration law and the seven-day tax test
ADR is room revenue divided by booked nights, not available nights — so ADR × occupancy, not ADR alone, is revenue per calendar night.
The verdict calls STR "meaningfully" ahead only when its gross revenue is at least 1.3× the long-term rent and its net cash flow is higher; a smaller gap is reported as marginal.
Airbnb host fee: most hosts pay 3% of the booking subtotal under the split fee; under the host-only fee most pay 15.5%, typically 14–16% (Airbnb Help Centre).
Cleaning revenue is typically a wash with cleaning cost — most successful operators charge the guest fee = their cleaner's invoice.
NYC Local Law 18: stays under 30 days require host registration with the Office of Special Enforcement; platform enforcement began 5 September 2023.
The mortgage is entered once and charged to both columns, so the comparison isolates operating economics from financing.
The platform fee is applied to room revenue plus cleaning fees, matching how Airbnb charges its host fee on the booking subtotal.
US depreciation: residential rental property is recovered over 27.5 years and nonresidential over 39 years under MACRS (IRS Publication 946).
Bookings = booked nights ÷ average stay. A shorter average stay means more turnovers, more cleaning pay-outs and more cleaning-fee revenue.
US tax: if the average stay is 7 days or less, the activity is not a "rental activity" under Treas. Reg. §1.469-1T(e)(3)(ii)(A) — the rule behind the STR loss-treatment debate.
Frequently Asked Questions
- Financially: usually yes, especially in tourist markets. Operationally: it's a hospitality business with 5-15 hr/week per property. The tool's verdict compares your specific numbers: it calls STR meaningfully ahead only when STR gross revenue is at least 1.3× the long-term rent and the net cash flow is higher. Below that, the extra operating complexity is buying you very little.
- Paid market-data services (AirDNA, Mashvisor, Rabbu) report ADR and occupancy by market and bed count. The free alternative is to study comparable live listings: note their nightly rates across the year and estimate occupancy from calendar availability and review velocity. Treat Airbnb's own earnings estimate as a headline, not an input, and underwrite the low season, not the peak.
- Substantial and changing. New York City's Local Law 18 requires registration for stays under 30 days and platforms stopped processing unregistered bookings on 5 September 2023, removing most whole-home listings. Many other cities cap permits, restrict STR to owner-occupied homes or exclude residential zones, and many condominium associations ban it outright. Some mortgages also prohibit short-term letting. Check the municipal ordinance, the HOA covenants and your loan terms for the specific address before buying with STR plans.
- Total room revenue divided by booked nights (not total nights). So if you earn USD 5,000 on 25 booked nights = USD 200 ADR. Doesn't include cleaning fees, just the per-night rate. ADR drops in low season and most data services report an annual average, so run the tool at least twice — once with peak-season inputs and once with off-season ones.
- Many hosts self-manage at first to learn the business, then decide whether being on call for guest messages is worth the share of gross revenue a co-host or manager charges. Whatever that share is, enter it in the monthly opex field and re-run: it is usually the largest operating line and the one most often left out of a first pass.
- Yes. Standard homeowner's policies generally exclude commercial activity, and paid short-term letting is commercial activity — confirm with your insurer rather than assume. Airbnb's AirCover for Hosts has its own terms and exclusions; read them rather than treating it as a substitute for a policy. Specialist STR insurers exist; get a quote and put the annual premium, divided by 12, into the monthly opex field.
- Two separate US rules get conflated here. First, cost segregation — splitting a building's cost into shorter-lived components — is available to any rental, not only STRs; the default recovery period is 27.5 years for residential and 39 years for nonresidential property (IRS Publication 946). Second, and specific to STRs: if the average guest stay is 7 days or less, the activity is not a "rental activity" under Treas. Reg. §1.469-1T(e)(3)(ii)(A), so a host who materially participates may treat losses as non-passive. The USD 25,000 allowance people quote is a different rule for rental real estate with active participation, and it phases out with income. Talk to a CPA experienced with STRs before relying on either.
- There is no fixed list — markets move with regulation and supply. The criteria that matter for this tool's inputs are: year-round demand (so occupancy holds outside peak season), an ordinance that permits non-owner-occupied letting and is not under review, an HOA that allows it, and enough comparable listings to source a defensible ADR. Run the tool with that market's off-season numbers before its peak ones.
- Dynamic-pricing services (PriceLabs, Wheelhouse, Beyond) adjust nightly rates for day of week, holidays, local events and competing availability. Whether they pay for themselves depends on your market; the honest test is to compare your realised ADR and occupancy over a full season with and without one, and to put the subscription into monthly opex either way.
- Yes — STR ownership doesn't require US residency. Practical needs: US-based property manager or co-host, US bank account for Airbnb payouts (or Wise/USD-routing), ITIN for tax filing, and STR-specific insurance underwritten by US carrier. Time zones make self-management impractical from abroad, so budget for a full-service co-host and enter their contracted share of gross revenue as opex. Confirm the local ordinance permits non-resident, non-owner-occupied letting before anything else — that single check decides whether the rest of the model applies.
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Method & sources
How it computes
Compares annual net cash flow of a short-term rental with the same property let long-term. STR gross = ADR × occupancy × 365 + cleaning fee × bookings (bookings = booked nights ÷ average stay); less platform fee × gross, cleaning pay-out × bookings, 12 × monthly operating costs and 12 × mortgage. LTR net = 12 × (rent − operating costs − mortgage). The verdict calls STR meaningfully ahead only when STR gross ≥ 1.3 × LTR gross and STR net > LTR net.
What this tool implements
- Platform fee default 3% = Airbnb's split-fee host service fee, applied to the booking subtotal including cleaning fee (Airbnb Help Centre article 1857); host-only fee listings (typically 14–16%) must override it
- ADR is revenue per booked night; occupancy converts it to revenue per available night — the tool multiplies the two
- Mortgage payment is entered once and charged to both STR and LTR so the comparison isolates operating economics
- No taxes, depreciation, appreciation or capital costs — a pre-tax operating cash-flow comparison only
Sources
- Airbnb Help Centre. Service fees (article 1857). https://www.airbnb.com/help/article/1857
- New York City Mayor's Office of Special Enforcement. Short-Term Rental Registration Law (Local Law 18 of 2022). https://www.nyc.gov/site/specialenforcement/registration-law/regi…
- 26 CFR §1.469-1T(e)(3)(ii)(A) — average period of customer use of seven days or less excludes an activity from the definition of a rental activity. https://www.law.cornell.edu/cfr/text/26/1.469-1T
- Internal Revenue Service. Publication 946, How To Depreciate Property (27.5-year residential rental / 39-year nonresidential recovery periods). https://www.irs.gov/publications/p946
What can make this go out of date
- Airbnb host service-fee percentages — set by Airbnb and revised in its Help Centre without a fixed schedule
- Municipal short-term-rental ordinances quoted in the prose (NYC Local Law 18) — amended by local legislation
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