Airbnb vs Long-Term Rental Calculator
Short-term rentals can pay 2–3× as much — or barely beat traditional renting once you net out the costs. See your numbers side by side.
The honest comparison
Short-term rentals (Airbnb, VRBO, Booking.com) can produce 2-3× the gross revenue of a long-term rental — but they also have ~4-8× the expenses and require dramatically more active management. The "STR premium" everyone talks about is real, but it shrinks fast once you account for cleaning, utilities, supplies, platform fees, and your time.
STR revenue formula
Where ADR (Average Daily Rate) is what guests pay per night before fees, and Occupancy is the percentage of nights booked. Industry-wide STR occupancy averages 50–60%; top performers hit 70–80%.
STR expenses people forget
- Cleaning — you charge guests a cleaning fee, but you pay the cleaner. Net it carefully.
- Utilities — guests don't conserve. Expect 2-3× a long-term tenant's bill.
- Supplies — toilet paper, paper towels, coffee, dish soap, shampoo, batteries. $100-200/month.
- Wear & tear — guests are harder on furniture than tenants. Budget for furniture replacement every 3-5 years.
- Insurance — STR insurance runs 2-3× a standard landlord policy.
- STR licensing — most cities now require permits; some have outright bans.
A 2-bedroom condo. Long-term: rents for $2,100/month. STR: $185 ADR at 65% occupancy, $120 cleaning fee, 3-night avg stay.
Now the expenses:
The LTR side: $2,100 rent, 6% vacancy ($126), 8% mgmt ($168), shared expenses $750.
STR wins by ~$1,515/month — about 140% more. But the LTR takes zero work, while the STR is a part-time job (or pays a manager 20-25%).
When LTR beats STR (and the gap shrinks)
- Properties not in tourist areas — low ADR + low occupancy = no premium
- Cities with STR bans — Boston, NYC, much of California require permits or 30-night minimums
- Older or non-photogenic properties — Airbnb is a beauty contest. Drab interiors don't book.
- If you outsource fully — STR managers take 20–25% off the top, often pushing net below LTR.
- If you value your time at $30+/hour — managing yourself can easily eat 15-25 hours/month.
Frequently asked questions
How do I estimate occupancy and ADR realistically?
Use AirDNA, PriceLabs, or Mashvisor for market data on your specific zip code. Free tip: look at 10 comparable listings in your area, check their calendars for the last 60 days, count booked vs available nights, and average their nightly rates. That gives you a real-world picture.
Are STR profits taxed differently?
If you provide "substantial services" (cleaning, breakfast, daily housekeeping) the IRS may classify your STR as a Schedule C business — subject to self-employment tax. Pure rental treatment (Schedule E) typically applies if you don't provide such services. The distinction can shift thousands in taxes; consult a CPA.
What's the real time commitment for self-managed STR?
Roughly 10–15 hours/month for an established listing: guest communication, calendar management, coordinating cleaners, handling small issues, restocking supplies, monitoring reviews. Setup and learning curve adds 30-50 hours upfront.
What about regulations?
Check your city, county, AND HOA before buying. Many municipalities now require STR permits, cap the number of permits, or ban non-owner-occupied STRs entirely. A property that didn't allow STRs when you bought it can become subject to new rules — and your business goes overnight.
Does Airbnb count for mortgage qualifying?
Lenders are cautious with STR income. Most won't count it for purchase qualifying — they treat the property as a second home or investment. After 12-24 months of documented STR income, some lenders will count it for refinance qualifying.
STR markets change quickly. Regulations, occupancy rates, and ADRs all shift. Always verify current local STR laws and use recent market data — not last year's numbers.