Last updated: May 2026
Estimate annual revenue, profit margin, and return on investment for your short-term rental.
Property & Revenue
Monthly Expenses
Results
Gross Revenue = Nightly Rate × Occupancy Rate × 365 + (Cleaning Fee × Booked Nights)
Net Revenue = Gross Revenue − Airbnb Host Fee (typically 3%) − Co-host/management fee
Net Profit = Net Revenue − All monthly expenses × 12
Occupancy benchmarks: Under 50% = below average, 60–70% = solid, 75%+ = excellent. Averages vary significantly by market, seasonality, and listing quality.
Cleaning fee: Enter the amount you charge guests per booking. This offsets your cleaning costs and is excluded from Airbnb's host fee calculation.
⚠️ Estimates only. Does not include income tax on STR income, local STR permit costs, or HOA restrictions. Verify local regulations before listing. Airbnb fees and policies may change.
Airbnb return on investment measures how much net income a short-term rental property generates relative to its total acquisition cost. Unlike a long-term lease where rent is fixed, STR income is driven by two interacting variables — nightly rate and occupancy — making small improvements in either metric compound dramatically over a full year. A property earning $150/night at 60% occupancy grosses $32,850 annually; push occupancy to 70% and the rate to $175 and the same property grosses $44,713. That $11,863 difference flows almost entirely to the bottom line because fixed costs like mortgage and insurance don't change.
Experienced hosts evaluate Airbnb ROI on both a gross yield basis (annual revenue ÷ property value) and a net cash-on-cash basis (net operating income ÷ cash invested). Cash-on-cash is the more useful metric for leveraged purchases because it measures return on your actual out-of-pocket capital, not the full property value. A 6% net yield on a $350,000 property funded with 20% down represents a 30% cash-on-cash return — a figure that looks very different depending on which lens you use.
| Market Type | Avg Occupancy | Avg Nightly Rate | Annual Revenue Estimate |
|---|---|---|---|
| Top urban market | 75% | $185/night | $50,700 |
| Mid-tier city | 65% | $130/night | $30,900 |
| Beach/seasonal | 55% | $210/night | $42,200 |
| Mountain/ski | 50% | $195/night | $35,600 |
| Rural/budget | 45% | $90/night | $14,800 |
| Suburban | 50% | $110/night | $20,100 |
What is a good ROI for an Airbnb property?
Most investors target a net cash-on-cash return of 8–12% for short-term rentals, though top-performing markets can hit 15–25%. Below 5% net yield on a leveraged purchase is generally considered marginal given the active management involved. Always compare to local long-term rental yields before committing to the STR strategy.
How does Airbnb ROI compare to long-term rental ROI?
Short-term rentals typically generate 1.5–3× the gross revenue of long-term leases in the same market, but also carry higher expenses (cleaning, supplies, higher turnover) and more active management. In permissive markets, STR net yields often beat long-term rentals by 3–6 percentage points. In restricted or oversaturated markets, the gap narrows or reverses.
What expenses should I factor into Airbnb ROI?
Key expenses include: mortgage P&I, property taxes, homeowner's insurance (STR-specific policy), HOA fees, platform fees (Airbnb host fee typically 3%), cleaning fees and supplies, utilities, maintenance and repairs, furnishing depreciation, and property management (if outsourced). A full expense ratio of 40–55% of gross revenue is typical for self-managed properties.
How does occupancy rate affect returns?
Occupancy is the most powerful lever in STR math. Because most costs are fixed (mortgage, insurance, taxes), each additional booked night adds near-full revenue to the bottom line. Moving from 50% to 60% occupancy on a $150/night listing adds $5,475 in annual revenue with minimal incremental cost — that's almost pure NOI gain.
Is Airbnb income taxable?
Yes. Airbnb income is generally taxable as self-employment or rental income. The IRS "14-day rule" provides an exception: if you rent your primary residence for 14 days or fewer per year, that income is tax-free. Beyond 14 days, all rental income is reportable, but you can deduct qualifying expenses. Consult a tax professional familiar with STR rules in your state.