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Short-Term Rental

Will this Airbnb cash flow?

Enter the price, your loan, the nightly rate, and how often it’s booked. We’ll estimate a year of bookings, subtract every running cost and the mortgage, and show whether a vacation rental would make or lose money each month.

  1. Revenue is rate times nights booked

    A short-term rental earns its nightly rate on the nights guests book, called . At $200 a night and 65% occupancy, that’s about 237 booked nights a year. Cleaning fees guests pay are added on top.

  2. Running costs are much higher

    Unlike a regular rental, you pay platform fees, cleaners, utilities, supplies, and extra wear and tear. Revenue minus those costs (and property tax, insurance, and HOA) is .

  3. Then the mortgage gets paid

    NOI minus your loan payments is your . Divided by the cash you put in (down payment, closing costs, and furniture), it’s your .
Take the nightly rate and occupancy from similar listings nearby, on Airbnb or a data service like AirDNA, and average them over a full year rather than peak season. Those two inputs move the result more than the rest. Short-term rental investing covers regulation, financing, and a worked example.
The property and your loan

The price, your down payment, the mortgage, and the yearly costs of owning the place.

$
% of price
%
yr
$/ yr
$/ yr
$/ mo
Bookings

What guests pay and how often they book. Use a full-year average from similar listings nearby.

$
%
$/ stay
nights
Running costs

What it takes to operate a rental that guests check in and out of every few days. Percentages are of revenue.

%
%
$/ mo
%
%

Yearly cash flow, before income tax

-$5,954

That’s -$496/month after all running costs and the mortgage. With $118,500 of cash put in (down payment, about 3% closing costs, and $15,000 of furniture), your is -5.0%.

Yearly revenue

$62,871

237 nights × $225, plus cleaning fees

Yearly running costs

$38,619

fees, cleaning, utilities, supplies, repairs, tax, insurance, HOA

NOI (before mortgage)

$24,252

revenue minus running costs

Yearly mortgage payments

$30,206

$2,517/mo principal and interest ($3,167/mo with tax, insurance, HOA)

Yearly cash flow

-$5,954

-$496/mo, before income tax

Cash-on-cash return

-5.0%

on $118,500 you put in

Cap rate

5.39%

NOI ÷ price (return if bought in cash)

Revenue per night (RevPAR)

$146

nightly rate × occupancy

Gross yield

14.0%

revenue ÷ price, before any costs

What this means

Booked 237 nights a year at $225, this place would bring in about $62,871. Running costs take $38,619 (61% of revenue), leaving $24,252 of , and the mortgage takes $30,206. You’d pay about $496 a month out of your own pocket to keep it. NOI covers the loan payment 0.80 times (the ); DSCR lenders often look for about 1.25 or more.

After platform fees, cleaning, utilities, and supplies, this rental brings in about $3,090/mo, about $390/mo more than a rough estimate of long-term rent here (12 times the nightly rate). That extra is what you get for running a hospitality business, and it can vanish in a slow year.

Occupancy is the biggest unknown. Try 10 points lower to see what a slow year or new listing looks like, and check local rules before buying: a short-term rental ban can end the income while the mortgage continues.

Short-term rental risks this doesn’t price in

Cities and HOAs keep banning or restricting short-term rentals (NYC, LA, Barcelona, Lisbon, and dozens of US suburbs). Check local rules before buying. A ban can end your income overnight while you still owe the mortgage.

A ready-to-book rental needs $15,000 to $40,000 in furniture, kitchenware, linens, decor, and electronics. This calculator includes $15,000, the low end. In crowded markets, listings often need premium finishes to earn higher nightly rates.

Running it yourself means guest messages, calendar management, cleaner coordination, restocking, and maintenance. One unit takes about 5 to 10 hours a week, and more with each unit you add.

Bookings swing with the seasons. A beach property might book 90% of nights in June to August and 30% in November to February, so enter an occupancy that averages the whole year.

Not included: occupancy taxes on guest stays (varies widely by city, often 10% to 15% of the room rate), permit and license fees, security deposits and damage claims, the 14-day rule for how a vacation home is taxed, , or depreciation recapture when you sell.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

Something look off? Report it

Terms used on this page

Vacation rentals borrow terms from both real estate and hotels.

Short-term rental (STR)
A furnished property rented by the night or week to travelers, usually through Airbnb or VRBO, rather than leased to one tenant for a year.
Average nightly rate (ADR)
What guests pay per booked night, averaged across the year, not counting cleaning fees. Peak-season rates run higher and off-season lower.
Occupancy
The share of nights in a year that guests book. 65% means about 237 of 365 nights. New listings often run 40% to 50% in their first year.
RevPAR (revenue per available night)
The nightly rate times occupancy: what an average night earns once you count the empty ones. Investors use it to compare listings.
NOI (net operating income)
A year of revenue minus all running costs (fees, cleaning, utilities, supplies, repairs, property tax, insurance, HOA) but before mortgage payments. More
Cash flow
What’s left after revenue pays every running cost and the mortgage. Negative cash flow means you pay in each month to keep the property.
Cash-on-cash return
A year of cash flow divided by the cash you put in. For a short-term rental that means furnishing as well as the down payment and closing costs. More
Cap rate
NOI divided by the purchase price: the yearly return if you paid all cash. It lets you compare properties regardless of financing. More
Gross yield
A year of revenue divided by the price, before any costs. It looks high for short-term rentals because their costs are so much higher than a regular rental’s.
Capex (capital expenditures)
Large, infrequent replacements such as heating and air conditioning, a roof, appliances, or worn furniture. Short-term rentals wear faster because of constant turnover.

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