Short-term rental revenue and profit — occupancy, fees, and the costs hosts forget
| Line | Monthly | Yearly |
|---|
| Occupancy | Monthly revenue | Monthly profit | Annual profit |
|---|
Airbnb math fails in a specific, predictable way: hosts multiply their best nightly rate by 30 and call it revenue. Real short-term rental economics run on occupancy-adjusted revenue minus a fee stack that eats 25–40% before the mortgage — platform fees, cleaning turnovers, supplies, and the maintenance that heavy guest use accelerates. This estimator models the full stack and reports the two numbers professionals use: true profit and RevPAN (revenue per available night, not per booked night).
| Input | US market reality |
|---|---|
| Occupancy | National average ~55–60%; strong urban/vacation markets 65–75%; oversupplied markets 40s. Your listing's first year runs below market while reviews build |
| Nightly rate | Seasonal spread of 2–3× between peak and trough is normal — use your weighted average, not July's rate |
| Platform fees | Airbnb host fee ~3% (or 14–16% host-only model); VRBO ~5% + payment processing |
| Cleaning | $80–150 per turnover for a typical home — shorter average stays multiply this line brutally |
At a 3-night average stay, a 58%-occupied listing turns over ~6 times a month — call it $570 of cleaning. Push the average stay to 5 nights (minimum-stay settings, weekly discounts) and the same occupancy costs $340 to clean, with fewer check-in risks. Long-stay strategies (28+ nights) go further: lower rates, but no cleaning churn, less regulation exposure, and utilities sometimes shifted to guests. The estimator responds to the stay-length input — try it.
The STR premium is real — typically 1.5–2.5× long-term rent gross — but it buys you a part-time hospitality job, higher wear, regulatory exposure and revenue volatility. Run the same property through the Cap Rate Calculator with long-term rent, and treat the STR excess as compensation for the work and risk. If the excess is thin, take the tenant.
Below the market average for year one (reviews drive ranking), so 45–55% is an honest start in most US markets. Mature, well-reviewed listings in strong markets sustain 65–75%. Anyone modeling 85%+ year-round is selling you something.
Roughly, at best — high cleaning fees suppress bookings and rank, so many hosts fold cleaning into the nightly rate. Net-net, treating cleaning as your cost (as this model does) is the conservative truth.
As rental income (Schedule E) or business income (Schedule C, if substantial services) — with depreciation, supplies, fees and the STR-share of utilities deductible. The '14-day rule' exempts income entirely if you rent your home under 15 days a year. Occupancy taxes are separate and local.
It's the existential one: cities from New York to Barcelona have capped, licensed or banned STRs, sometimes overnight. Before buying for STR: read the city ordinance, the HOA covenants, and assume the rules tighten. A property that also works as a long-term rental is your hedge.
ADR is revenue per booked night; RevPAN spreads revenue across ALL nights, occupied or not — rate × occupancy. RevPAN is the honest yardstick because it can't be gamed by pricing high and sitting empty.
At 20–30% of revenue, management converts a side business into passive-ish income at roughly half the profit. Self-manage the first year to learn the machine, then price your hours honestly against the fee.
Yes — every figure computes locally in your browser.
Run the model with conservative occupancy, real cleaning math and the full fixed stack — and compare against a boring long-term tenant before you buy anything. The listings that survive are the ones whose owners did this arithmetic first.