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Airbnb income calculator
A short-term rental's gross revenue looks huge next to long-term rent, until you count the expenses, which are much higher. Estimate the real net operating income from nightly rate, occupancy, and STR-specific costs.
On $41,866 of gross revenue (62% occupancy at $185/night), STR expenses take $23,493 a 56% ratio, far above a long-term rental. Net is $18,373 before the mortgage.
How short-term rental income works
net operating income = gross revenue − STR expenses
The number that seduces new short-term rental investors is the gross: a place that rents for $2,600 a month long-term might gross $45,000 a year on Airbnb. The number that surprises them is the expense ratio. Every guest triggers cleaning and restocking, the host pays all utilities, platforms take a cut, and specialized STR management runs 20 to 30 percent: far above the 8 to 10 percent of a long-term rental. Between them, short-term expenses commonly eat 35 to 50 percent of revenue before the mortgage even appears.
The assumptions that decide it
Occupancy and nightly rate are everything, and both are easy to overstate. New listings ramp slowly, seasonal markets swing hard, and regulation can change the rules overnight. Use conservative, annualized occupancy, not the peak-season week, and a realistic rate for your specific property, then treat this net figure as the income that has to cover the same mortgage a long-term tenant would.
Short-term rental questions
How do you calculate Airbnb income?
Multiply the average nightly rate by occupancy and 365 nights for gross revenue, then subtract short-term rental expenses: cleaning, supplies, platform fees, utilities, and management, which run much higher than a long-term rental. What's left is net operating income, the number that actually has to cover your mortgage.
Why are short-term rental expenses so much higher?
Turnover. Every guest means cleaning, restocking, and coordination, plus you pay all the utilities and often 20 to 30 percent for specialized management. STR expense ratios of 35 to 50 percent of revenue are common, versus 30 to 40 percent for a long-term rental, which is why gross revenue alone is misleading.
What occupancy should I assume?
It varies enormously by market and season: 50 to 70 percent is a common annual range for an established listing, but new listings ramp slowly and seasonal markets swing hard. Use conservative occupancy and a realistic nightly rate, not peak-season figures, and check local regulations, which can cap or ban short-term rentals entirely.
Every calculator
Faro underwrites the long-term case.
Paste a listing for a full buy-and-hold analysis: cash flow, comps, and a target price. Short-term is your upside to model on top.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.