Short answer
To compare Airbnb with a long-term rental, run the same house both ways, then find the occupancy where the Airbnb nets exactly what the lease does. In this worked example, the long-term lease clears $4,090.69 a year, the Airbnb at 60% occupancy nets $7,581.97, and Airbnb only wins above 54.28% occupancy.
- Compare net cash flow after the mortgage, not gross rent vs gross bookings.
- Example house: lease nets $340.89 a month; Airbnb at 60% occupancy nets $631.83 a month.
- The Airbnb must hold 54.28% occupancy just to match the lease, and 47.57% to avoid a loss.
- Adding a 20% co-host fee turned the example Airbnb from +$7,581.97 to -$1,543.03 a year.
- Every rent, rate and cost here is an assumption. Replace it with your market's numbers.
On this page
- Is Airbnb more profitable than long-term renting?
- Run the numbers: Airbnb calculator (free, no signup)
- The long-term rental side
- The Airbnb side: same house, same mortgage
- At what occupancy does Airbnb beat long-term renting?
- The costs that flip the answer
- Rental rules of thumb: 1%, 2%, 50% and 7%
- What the calculator cannot price for you
- Build the comparison in Excel or Google Sheets
- Step-by-step
- FAQ
Is Airbnb more profitable than long-term renting?
Sometimes. An Airbnb earns more gross revenue per month, but it also pays utilities, cleaning, platform fees, furnishing and higher insurance, and it only earns on booked nights. The answer for any house is one number: the occupancy at which the Airbnb's net equals the lease's net.
The address-lookup tools that rank for this search (AirDNA, Rabbu and similar) estimate short-term revenue from comparable listings. That is useful input. What they cannot know is your mortgage, your cleaner and your tolerance for empty weeks, so this guide runs the comparison with every step visible. I build the math, I am not a landlord or a host, and none of this is financial or tax advice.
Run the numbers: Airbnb calculator (free, no signup)
Enter your nightly rate, occupancy and costs below. To compare with a lease, put your fixed costs plus the lease's monthly cash flow into the fixed-cost box: the break-even occupancy it returns is the occupancy where Airbnb matches renting.
The long-term rental side
For the lease, cash flow = rent after vacancy - operating costs - mortgage payment. With the assumed $250,000 house, 25% down at 7% and $2,300 rent, it clears $340.89 a month.
Worked example: Long-term lease, self-managed (mgmt 0%). All inputs are assumptions.
| Item | Value |
|---|---|
| Down payment % (input) | 25% |
| Closing costs % (input) | 3% |
| Repairs / rehab (input) | $0.00 |
| Interest rate % (input) | 7% |
| Loan term (years) (input) | 30 |
| Vacancy % (input) | 5% |
| Management % of rent (input) | 0% |
| Property tax a year (input) | $3,000.00 |
| Insurance a year (input) | $1,400.00 |
| Maintenance % of rent (input) | 5% |
| CapEx reserve % of rent (input) | 5% |
| HOA a month (input) | $0.00 |
| Other costs a month (input) | $0.00 |
| Purchase price (input) | $250,000.00 |
| Monthly rent (input) | $2,300.00 |
| Loan amount | $187,500.00 |
| Mortgage payment (P&I) a month | $1,247.44 |
| Cash invested | $70,000.00 |
| Rent after vacancy | $2,185.00 |
| Operating costs a month | $596.67 |
| Net operating income a year | $19,060.00 |
| Cap rate | 7.62% |
| Cash flow a month | $340.89 |
| Cash flow a year | $4,090.69 |
| Cash-on-cash return | 5.84% |
| Passes the 1% rule? | No |
| Rent as % of price | 0.92% |
| Debt service coverage ratio | 1.27 |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
Operating costs here are tax, insurance, and 5% each of rent for maintenance and capital reserves; the tenant is assumed to pay utilities. Management is set to 0% because the Airbnb side is self-managed too. Compare like with like or the answer is rigged. The rental property analysis spreadsheet guide explains each of these lines, and ProSheet Studio's rental property deal analyzer runs cap rate, cash-on-cash and the 1% rule for the lease side.
The Airbnb side: same house, same mortgage
For the Airbnb, net = booked-night revenue + cleaning fees - platform fee - per-stay costs - fixed costs. Fixed costs carry the same mortgage, tax and reserves as the lease, plus the bills a tenant would normally pay.
| Cost | Long-term lease | Airbnb |
|---|---|---|
| Mortgage payment (P&I) | $1,247.44 | $1,247.44 |
| Property tax | $250 | $250 |
| Insurance | $116.67 | $200 |
| Maintenance + capital reserves | $230 | $230 |
| Utilities | Tenant pays | $260 |
| Internet and streaming | Tenant pays | $90 |
| Software, permit, licence | none | $40 |
| Furniture and linen replacement | none | $100 |
| Vacancy allowance | 5% of rent = $115 | Built into occupancy |
| Fixed total | $1,959.11 incl. vacancy | $2,417.44 |
Worked example: Same house as a self-managed Airbnb. Fixed costs include the same mortgage, tax and reserves.
| Item | Value |
|---|---|
| Average stay (nights) (input) | 3 |
| Cleaning fee charged per stay (input) | $100.00 |
| Platform fee % (input) | 3% |
| Cleaning cost per stay (input) | $90.00 |
| Fixed costs a month (input) | $2,417.44 |
| Supplies per stay (input) | $15.00 |
| Management % (input) | 0% |
| Nightly rate (input) | $175.00 |
| Occupancy % (input) | 60% |
| Booked nights | 219 |
| Stays | 73 |
| Gross revenue | $45,625.00 |
| Platform fees | $1,368.75 |
| Per-stay costs | $7,665.00 |
| Fixed costs a year | $29,009.28 |
| Net profit a year | $7,581.97 |
| Net profit a month | $631.83 |
| Break-even occupancy | 47.57% |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
At 60% occupancy the Airbnb nets $631.83 a month against the lease's $340.89: $7,581.97 vs $4,090.69 a year, a gap of $3,491.28. Its own break-even is 47.57% occupancy. For the full cost-by-cost method on the Airbnb side, see the Airbnb profit calculator spreadsheet guide.
At what occupancy does Airbnb beat long-term renting?
Airbnb beats the lease once its net per booked night covers its fixed costs plus the lease's cash flow. Formula: crossover occupancy = (Airbnb fixed costs a year + lease cash flow a year) / (net per booked night x 365).
- Net per booked night: $175 x 0.97 + ($100 x 0.97 - $90 - $15) / 3 = $169.75 - $2.67 = $167.08.
- Hurdle: $29,009.28 + $4,090.69 = $33,099.97 a year.
- Crossover: $33,099.97 / ($167.08 x 365) = 54.28%.
Worked example: The hurdle: Airbnb fixed costs plus the lease's monthly cash flow. Its break-even occupancy is where Airbnb matches the lease.
| Item | Value |
|---|---|
| Average stay (nights) (input) | 3 |
| Cleaning fee charged per stay (input) | $100.00 |
| Platform fee % (input) | 3% |
| Cleaning cost per stay (input) | $90.00 |
| Fixed costs a month (input) | $2,758.33 |
| Supplies per stay (input) | $15.00 |
| Management % (input) | 0% |
| Nightly rate (input) | $175.00 |
| Occupancy % (input) | 60% |
| Booked nights | 219 |
| Stays | 73 |
| Gross revenue | $45,625.00 |
| Platform fees | $1,368.75 |
| Per-stay costs | $7,665.00 |
| Fixed costs a year | $33,099.96 |
| Net profit a year | $3,491.29 |
| Net profit a month | $290.94 |
| Break-even occupancy | 54.28% |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
| Airbnb occupancy | Airbnb net a year | Minus lease net ($4,090.69) |
|---|---|---|
| 45% | -$1,565.84 | -$5,656.53 |
| 50% | $1,483.43 | -$2,607.26 |
| 54.28% | $4,093.60 | about even |
| 60% | $7,581.97 | $3,491.28 |
| 65% | $10,631.24 | $6,540.55 |
| 70% | $13,680.51 | $9,589.82 |
So the question to ask your market data is not "what will it earn?" but "can it hold above 54% all year, including the slow months?" If comparable listings sit near that line, the lease is the calmer bet.
The costs that flip the answer
Three inputs move the crossover more than anything else: who manages it, which platform fee you pay, and the cash you spend furnishing.
- Co-host or manager. Add an assumed 20% management fee to the Airbnb and, at 60% occupancy, it nets -$1,543.03 a year; break-even rises to 63.37%. If you plan to pay a manager, add the same line to the lease too.
- Platform fee. Airbnb's help centre says most split-fee hosts pay 3%, while most single-fee hosts pay 15.5% and that single fee is mandatory for most hosts (Airbnb service fees). Rerun with your actual fee.
- Furnishing. Assume $20,000 to furnish. The Airbnb's extra $3,491.28 a year earns that back in about 5.73 years, a 17.46% yearly return on the extra cash. Total cash in rises from $70,000.00 to $90,000.
For how to judge that return on the cash you put in, see the cash-on-cash return calculator guide.
Rental rules of thumb: 1%, 2%, 50% and 7%
These rules are screening shortcuts, not answers. Use them to discard obvious losers, then run the full calculation.
| Rule | What it says | Example house |
|---|---|---|
| 1% rule | Monthly rent at least 1% of price | Fails: rent is 0.92% of price |
| 2% rule | Monthly rent at least 2% of price | Fails by a wide margin |
| 50% rule | Operating costs run about half of rent, before the mortgage | Costs + vacancy are $711.67, 30.94% of rent, because management is 0% |
| 7% rule | Used inconsistently; often a minimum yield target | Cap rate is 7.62% |
The example fails the 1% rule yet still cash-flows $340.89 a month on the lease, because the assumed costs are low and there is no manager. That is exactly why rules of thumb should start the analysis, not end it.
What the calculator cannot price for you
The spreadsheet compares money. Three things it does not capture decide many of these choices, so write them next to the numbers.
- Your time. At 219 booked nights and a 3-night average, the example Airbnb has 73 turnovers a year, about 1.4 a week, each with messages, a clean to schedule and a restock. The lease has one tenant. If you would pay someone for that work, put the fee in the sheet.
- Local rules. Many cities and HOAs restrict or license short-term rentals. Check your city's rules and your HOA documents before you model a single night; a permit fee belongs in fixed costs.
- Variance. The lease's $340.89 arrives most months. The Airbnb's $631.83 is an average of busy and empty months. Build a 12-month tab with your market's seasonality and check the worst three months against your cash reserve.
Build the comparison in Excel or Google Sheets
Two columns, one per strategy, with shared inputs (price, loan, tax, reserves) at the top. The crossover cell is the one to watch.
Lease cash flow a month
=B3*(1-B4)-(B3*B5+B6/12+B7/12)-PMT(B8/12,B9*12,-B2*(1-B10))B2 = price, B3 = rent, B4 = vacancy decimal, B5 = reserves as a decimal of rent, B6 = tax a year, B7 = insurance a year, B8 = rate decimal, B9 = years, B10 = down payment decimal.
Airbnb net per booked night
=C2*(1-C3)+(C4*(1-C3)-C5)/C6C2 = nightly rate, C3 = platform fee decimal, C4 = cleaning fee, C5 = cleaning + supplies per stay, C6 = average stay.
Crossover occupancy (Airbnb = lease)
=(C7*12+D2*12)/(C8*365)C7 = Airbnb fixed costs a month, D2 = lease cash flow a month, C8 = net per booked night. Format as %.
Furnishing payback (years)
=C9/(C10-D2*12)C9 = furnishing cost, C10 = Airbnb net a year. Returns an error or negative if Airbnb earns less than the lease.
Airbnb & Short-Term Rental Profit Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $14.99, no subscription, instant download.
See the Airbnb & Short-Term Rental Profit Calculator →Buy now — $14.99All 7 templates — $49Instant access by email after checkout via Payhip.
If you would rather start from a working file, the Airbnb vs rental profit calculator spreadsheet is $14.99 one-time for Excel and Google Sheets. It takes nightly rate, occupancy, nights and all recurring costs, and returns net profit, margin and break-even occupancy; feed it the lease cash flow as an extra fixed cost to get the crossover. Both it and the rental analyzer are in the $49 Complete Toolkit. The short-term rental calculator page has a short demo.
Step-by-step: Airbnb vs Long-Term Rental Calculator: Same House, Both Ways
- Enter shared inputs. Price, down payment, rate, term, property tax and reserves. Both strategies use the same mortgage and the same reserves.
- Compute lease cash flow. Rent after vacancy, minus tax, insurance, reserves and any management, minus the mortgage payment.
- Compute Airbnb net. Booked nights x rate plus cleaning fees, minus platform fee, per-stay costs and fixed costs including utilities and furnishing reserve.
- Find the crossover occupancy. Divide Airbnb fixed costs plus lease cash flow (annual) by net per booked night x 365.
- Stress-test the answer. Rerun with a manager fee, the single platform fee and 10 points less occupancy. If Airbnb loses in any, weigh that risk.
- Add furnishing payback. Divide furnishing cost by the yearly gap between Airbnb net and lease net to get payback years.
Skip the setup: Airbnb & Short-Term Rental Profit Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $14.99, no subscription, instant download.
See the Airbnb & Short-Term Rental Profit Calculator →Buy now — $14.99All 7 templates — $49Instant access by email after checkout via Payhip.
Frequently asked questions
What is more profitable, Airbnb or long-term rental?
It depends on occupancy. In this guide's example, the lease nets $4,090.69 a year and the Airbnb nets $7,581.97 at 60% occupancy, but the Airbnb only beats the lease above 54.28% occupancy. Below that, the lease wins. Calculate the crossover for your own house before deciding. Not financial advice.
Do Airbnbs make more money than renting?
They usually bring in more gross revenue, but not always more net money. Utilities, cleaning, platform fees, furnishing and empty nights come out of Airbnb revenue. Compare net cash flow after the mortgage for both strategies on the same house; gross comparisons flatter the Airbnb.
What is the 2% rule for rental property?
The 2% rule says a rental's monthly rent should be at least 2% of its purchase price, so a $250,000 house would need $5,000 a month. It is a quick screen, much stricter than the 1% rule, and ignores taxes, insurance and financing. Use it to filter, then run full cash flow.
What is the 50% rule in rental property?
The 50% rule estimates that operating costs, excluding the mortgage, will be about half of rent. It is a rough screen. In the example house, operating costs plus vacancy come to $711.67, or 30.94% of rent, because management is set to zero. Your own line items beat the rule.
How much should a $400,000 house rent for?
Market rent is set by comparable rentals nearby, not by a formula. The 1% rule would ask for $4,000 a month and the 2% rule $8,000, but many houses rent below both and still cash-flow when costs are low. Check local listings, then run the cash flow.
What is the 7% rule for rental property?
It has no single agreed meaning. It is usually quoted as a minimum yield, for example wanting net operating income of at least 7% of price, which is a cap rate target. The example house's cap rate is 7.62%. Treat any such rule as a screen, not a decision.
What is the 75-55 rule in Airbnb?
It is informal investor shorthand with no official definition. A common version checks whether comparable listings are around 75% booked for the next 30 days and 55% for days 30 to 60. It tests demand. For an Airbnb-vs-lease decision, compare that demand with your crossover occupancy instead.
Are Airbnbs still profitable in 2026?
Profitability is decided house by house by nightly rate, occupancy, fees, costs and financing, not by the calendar year. Run the same property as a lease and as an Airbnb, find the crossover occupancy, and see whether your market can hold it through slow months. This is not financial advice.
Sources
- Airbnb Help Centre: Airbnb service fees — Split fee 3% for most hosts; single fee 15.5% for most; single fee mandatory for most hosts
I'm not a contractor, landlord or accountant. I build the pricing maths, and every number on this page shows its working so you can check it instead of trusting it. Watch the breakdowns on YouTube →