How to compare a long-term rental and an Airbnb
Start with the purchase price, down payment, interest rate, and loan term. Both strategies use the same principal and interest payment, annual property tax, and base insurance. Enter maintenance as a percentage of collected room rent. For the long-term rental, add monthly rent, vacancy, management, and the utilities you expect to pay as the owner. A monthly lease rate tells you how much you could collect in an occupied month. Vacancy turns that figure into a full-year estimate.
For short stays, enter a realistic nightly rate and the share of calendar nights you expect to book. A three-night average stay means about one turnover for every three booked nights. Enter what guests pay for cleaning and what the cleaner charges you. Include the host platform fee and the percentage you expect to pay for short-term management. The calculator applies both fees to room and cleaning charges. Add utilities, internet, and supplies, then enter any extra short-term insurance cost.
What the results include
The model uses 365 days multiplied by occupancy to estimate booked nights. Annual room revenue is booked nights times the nightly rate. Cleaning revenue and expense use estimated stays, which can be fractional in a projection. The lodging tax estimate applies to room and cleaning charges as a guest pass-through. It appears separately from the operating results. Use the actual fee and tax bases for your listing when making a budget.
Furnishings count as an annual expense spread evenly over the years you enter. For example, a $12,000 setup spread over five years reduces modeled cash flow by $2,400 a year. You may still pay the whole bill at setup. The projection also excludes income tax and one-time purchase costs. The mortgage calculator can help you look at how financing pays down over time.
Worked example on a $350,000 property
Consider a $350,000 purchase with 25% down and a 30-year loan at 6.5%. At $2,400 monthly rent and 5% vacancy, the long-term strategy collects $27,360 a year before expenses. Management at 8% and maintenance at 5% leave $23,803.20 before mortgage payments, taxes, insurance, and owner-paid utilities. The rent collected in any one month may vary from that average.
At $175 per night and 60% occupancy, the short-term strategy projects 219 booked nights, $38,325 in room revenue, and 73 stays at three nights per stay. Charging $95 for cleaning and paying $90 produces $365 before platform and management fees on cleaning. After all modeled costs, long-term cash flow is −$225.58 per month and short-term cash flow is −$373.60 per month. Short stays need about 63.72% occupancy at $175 per night to match the long-term result. The conservative toggle changes 60% occupancy to 51% and $175 per night to $157.50.
Common mistakes when estimating bookings
Use rates that guests are likely to pay throughout the year. A popular weekend can produce a high nightly quote while weekday demand stays weak. In the seasonal table, June through August are peak months and the slider moves occupancy between months without changing total booked nights. If your market peaks in winter, treat the summer profile as an illustration and use local booking data for a monthly budget.
Check the property’s eligibility before counting on short stays. Ask the local permitting office about the address and review association rules, insurance coverage, and applicable lodging tax obligations. A rental may also need extra time for guest messages and turnovers. Use the rental property calculator for a closer look at a long-term deal.
Frequently asked questions
What does break-even occupancy mean here?
It is the occupancy at which the short-term rental matches the modeled long-term cash flow at the effective nightly rate. A property can match the other strategy while both are losing money.
Does a 15% occupancy reduction mean 15 percentage points?
The conservative scenario multiplies occupancy by 0.85 and nightly rate by 0.90. A 60% occupancy assumption becomes 51%.
How are cleaning fees handled?
The calculator estimates stays from booked nights and average stay length. It adds the fee charged to guests, subtracts cleaning cost, and applies host and management fees to room and cleaning revenue.
Does the seasonal slider change annual cash flow?
The slider shifts booked nights between months at the same nightly rate. The yearly booked-night total and annual cash flow stay fixed, apart from rounding in the displayed monthly rows.
Is lodging tax part of my projected profit?
The estimated guest lodging tax is shown separately and excluded from cash flow. Check what your local jurisdiction taxes and whether your platform collects and remits it.