Will Your Airbnb Actually Make Money? Calculate Your Profit.
Will your short-term rental actually make money?
Airbnb Profit Calculator
Cap Rate · Cash-on-Cash Return · Break-Even · 5-Year Projection
Results update in real time as you adjust any input.
Results are estimates only and do not constitute financial, tax, or legal advice. Consult a qualified professional before making financial decisions.
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Short-term rental looks profitable on paper until you account for the full cost structure. A property renting at $180/night sounds compelling — until you factor in platform fees (Airbnb takes 3%), cleaning costs ($80–$150 per turnover), vacancy (typically 25–40% of nights), property management, insurance uplift, maintenance, and the opportunity cost of your down payment sitting in the property rather than in index funds. This calculator models Airbnb profitability the way a real investor would: starting from your property price and financing structure, then calculating gross revenue at your nightly rate and occupancy estimate, then systematically deducting every meaningful cost category. What remains is your true cash flow — and from that, your cash-on-cash return, your cap rate, and your effective ROI including projected appreciation. The result is often surprising in both directions. Some markets with modest nightly rates generate extraordinary cash-on-cash returns because property prices are low relative to rental demand. Others look fantastic on nightly rate but produce negative cash flow after costs. The only way to know which situation you're in is to run the numbers with realistic inputs — which is exactly what this calculator does. Use it before buying a property, before listing an existing property, or when comparing a short-term rental strategy to a traditional long-term lease.
- ·Airbnb platform fee of 3% is deducted from gross revenue
- ·Occupancy rate applies to 365 nights; gross revenue = nights occupied × nightly rate
- ·Cleaning cost is multiplied by estimated number of turnovers (nights occupied ÷ average stay length of 3 nights)
- ·Mortgage payment calculated using standard amortization at entered rate and term
- ·Property appreciation compounds annually and is added to equity; it does not affect cash flow
- ·Cap rate = Net Operating Income ÷ Property Value (excludes financing)
- ·Cash-on-cash return = Annual Net Cash Flow ÷ Cash Invested (down payment + closing costs)
Gross Annual Revenue = Nightly Rate × 365 × (Occupancy Rate / 100) Net Operating Income (NOI) = Gross Revenue – Platform Fees – Cleaning – Maintenance – Insurance – Property Tax – HOA – Property Management Annual Net Cash Flow = NOI – Annual Mortgage Payments Cap Rate = NOI / Property Price × 100 Cash-on-Cash Return = Annual Net Cash Flow / Cash Invested × 100 (Cash Invested = Down Payment + Closing Costs) Break-Even Occupancy = Total Annual Costs / (Nightly Rate × 365) × 100
- →You're evaluating whether to buy a property specifically for Airbnb income
- →You own a property and are considering switching from long-term to short-term rental
- →You want to stress-test different occupancy rate assumptions before committing
- →You're comparing Airbnb income against a traditional tenant scenario
- →You want to know your break-even occupancy rate — the minimum to cover all costs
- →You're modeling whether to hire a property manager and how it affects returns
Example 1: Strong short-term rental market
Inputs: Price: $280,000 · Rate: $150/night · Occupancy: 70% · Cleaning: $90 · Mgmt fee: 20%
Result: Gross revenue: $38,325 · NOI: $22,400 · Net cash flow: $8,200 · CoC return: 12.3% · Cap rate: 8%
Excellent returns. Cap rate of 8% and 12%+ cash-on-cash makes this a strong investment in any market. Break-even occupancy is around 48%.
Example 2: High-cost market, marginal returns
Inputs: Price: $750,000 · Rate: $250/night · Occupancy: 65% · Cleaning: $150 · Mgmt fee: 25%
Result: Gross revenue: $59,375 · NOI: $38,000 · Net cash flow: –$4,800 · CoC return: –3.2% · Cap rate: 5.1%
Negative cash flow despite strong gross revenue. High property price means the mortgage overwhelms income. Appreciation-dependent returns are speculative — consider whether long-term rental performs better.
- ✕Using 100% occupancy in projections — even top listings average 70–75% at best
- ✕Forgetting Airbnb's 3% host service fee, which is applied before revenue reaches you
- ✕Underestimating cleaning costs — with high turnover, annual cleaning easily exceeds $8,000–$12,000
- ✕Ignoring the insurance uplift — short-term rental requires a commercial or STR rider that adds 15–30% to standard homeowner premiums
- ✕Not accounting for local STR regulations, permit costs, or HOA restrictions that could end the rental entirely
What occupancy rate should I realistically expect on Airbnb?
Industry-wide Airbnb occupancy averages 48–55% nationally, but top-performing listings in high-demand markets reach 70–80%. Your realistic estimate depends on your market, listing quality, and how aggressively you price. AirDNA and Rabbu offer market-level occupancy data by city and property type. For planning purposes, use a conservative 50–60% and stress-test at 40% to ensure you can still cover costs in a slow year.
How does Airbnb's cleaning fee affect profitability?
Cleaning fees are passed through to guests in full, so they're typically revenue-neutral in isolation. However, high cleaning fees reduce booking rates (guests avoid them), and your actual cleaning costs depend on turnover frequency. A property with 3-night average stays has roughly 2× the cleaning costs of one with 6-night average stays. This calculator uses an estimated turnover count based on occupied nights — the more frequently guests change over, the higher your net cleaning cost after accounting for the fee charged.
What's a good cap rate for a short-term rental?
For short-term rentals, a cap rate of 6–8% is generally considered solid; above 8% is excellent; below 5% is marginal and makes the investment appreciation-dependent. Cap rate is calculated on the property's full value before financing, so it's independent of your down payment and mortgage. It's the best metric for comparing properties across different financing structures. Traditional long-term rentals typically show cap rates of 4–6% in most US markets.
Should I hire a property manager for my Airbnb?
Short-term rental property managers typically charge 20–30% of gross revenue versus 8–10% for long-term rental managers. At 25%, this is roughly $12,000–$15,000/year on a property generating $50,000 gross. The tradeoff: you reclaim significant time (managing an active Airbnb requires 5–20 hours/week), and a good manager can often improve occupancy and ratings. If your property isn't local or you value your time highly, the fee is often worth it. Model both scenarios in the calculator.
What's the difference between cash-on-cash return and cap rate?
Cap rate measures the property's return before financing — it tells you how productive the asset is regardless of how you paid for it. Cash-on-cash return measures your actual annual return on the cash you invested (down payment + closing costs). If you finance with a mortgage, cash-on-cash and cap rate diverge significantly. A property with a 7% cap rate and 80% financing might have a 12–15% cash-on-cash return (positive leverage) or 2–4% (negative leverage) depending on the mortgage rate relative to the cap rate.