Rental Arbitrage Calculator: Highest Rent, Payback and Profit Over the Lease

How to calculate rental arbitrage profit: the formula

Monthly profit = net kept per booked night x booked nights a month - lease rent - other fixed bills. Rental arbitrage means you lease a unit and sublet it by the night, so the rent is owed every month whether or not anyone books.

With the assumptions used on this page, each booked night leaves $159.88 after the platform fee and the cleaning shortfall, and 64% occupancy is 233.6 booked nights a year. That is $37,346.80 a year. Fixed costs are $2,380 a month ($2,050 rent plus $330 of utilities, internet and insurance), or $28,560 a year. The difference is $8,786.80: $732.23 a month.

The revenue half is ordinary short-term rental maths; the Airbnb profit calculator spreadsheet guide walks through it line by line. This page adds what a tenant needs: the highest rent the unit can carry, the startup cash and its payback, and the profit left when the lease ends.

I build pricing arithmetic; I do not host or sublet. Every input below is an assumption to replace with your own lease terms and booking estimate. Nothing here is legal or tax advice, and no figure forecasts what a unit will earn.

Rental arbitrage calculator: profit, payback and the highest rent

Enter the lease rent, other monthly bills, nightly rate, an occupancy you can defend, per-stay costs and the cash spent before the first guest. The calculator returns monthly profit, break-even occupancy, the highest rent that breaks even, months to earn back the startup cash and profit over the lease.

The defaults are the worked example below. Test a poor year as well as the year you hope for. A loss shows as a negative amount.

Worked example: a $2,050 lease at $195 a night

At 64% occupancy the unit earns $4,380.00 a month, keeps $732.23 after every cost, and still loses money over a 12-month lease once the furnishing is counted.

Read it in three steps. First, the month: $4,380.00 of revenue is 2.14 times the rent, and rent takes 46.8% of it. Second, the cushion: break-even is 48.94%, or 14.89 booked nights a month, so the example sits 4.6 nights a month above the line. Third, the lease: twelve months of profit is $8,786.80, but $10,950 went on furnishing and upfront costs, a loss of $2,163.20.

Revenue of more than twice the rent did not make this lease pay. That is why the multiple is an output here, not a pass mark.

What is the highest rent that still breaks even?

Highest break-even rent = net kept per booked night x booked nights a month - other fixed bills. In the example that is $2,782.23: the $2,050 rent plus the $732.23 monthly profit. At that rent the unit earns nothing; above it, every month loses money.

That ceiling ignores the furnishing. A stricter ceiling asks the lease to repay it: subtract the furnishing and upfront costs divided by the lease months. $10,950 over 12 months is $912.50 a month, so the highest rent that gets the setup money back inside a 12-month lease is $1,869.73. Over 18 months it is $2,173.90; over 24 months, $2,325.98. The example's $2,050 passes the 18-month test and fails the 12-month one.

Take both numbers into a lease negotiation.

Each extra $100 of rent raises break-even occupancy by 2.06 points and removes $100 of profit in every month of the lease. At $2,250 the same unit needs 53.06% occupancy before it earns anything.

How much startup cash does rental arbitrage need, and when does it pay back?

Startup cash = furnishing and setup + security deposit + other upfront costs. Payback months = startup cash / monthly profit. The example needs $13,000.00 and earns it back in 17.75 months, which is longer than its 12-month lease.

Only part of that cash can come back. The deposit is assumed returned at the end of the lease; the other $10,950, or 84.2% of the total, is spent. The calculator values the furniture at zero when the lease ends; if you would sell or reuse it, add your own figure.

Add an empty first month

Rent starts on day one of the lease. Bookings do not. One unbooked month while the unit is furnished and listed costs $2,380 of rent and bills. Add it to other upfront costs and startup cash becomes $15,380, payback 21 months, and the 12-month lease loses $4,543.20.

Cash-on-cash without a purchase

The example table's 67.59% is one year of profit divided by startup cash. There is no purchase price here, so it is not the figure a property buyer means: a buyer's cash becomes equity, while most of this cash is spent. The cash-on-cash return calculator guide covers the purchase version.

Is rental arbitrage profitable over a 12-month lease?

Only if monthly profit x lease months is more than the furnishing and upfront costs. A unit can show a profit every month and still end its lease behind, because the setup money is spent once and the lease has an end date.

The example needs about 15 months of profit to repay $10,950, and a 12-month lease stops short. On an 18-month lease the same unit clears $2,230.20, and on 24 months $6,623.60, if rent and bookings hold for the whole term. Do not count on a renewal unless the lease gives you one.

The lease is a fixed obligation: $2,380 of rent and bills is due in a month with no bookings at all. Read the early-termination clause before choosing a term. Lease profit also assumes the full deposit comes back; any deduction comes straight off the result.

What occupancy does a leased Airbnb need to break even?

Break-even occupancy = (rent + other fixed bills) x 12 / (net kept per booked night x 365). In the example: $28,560 / ($159.88 x 365) = 48.94%, or 14.89 booked nights a month.

At 45% the unit loses $191.71 a month, $2,300.53 a year, on top of the setup money. Breaking even on the month is not the target either: for a 12-month lease to repay its furnishing, the example needs 67.71% occupancy averaged over the whole year, slow months included.

The platform fee is an input, not a constant

The example assumes 15.5% of every booking. As of 9 October 2026, Airbnb's service fee page says home hosts are being moved to a single fee taken from the host payout, where "Most hosts pay 15.5%", and that the older split fee, where "Most hosts pay a 3% service fee", is being phased out. Check your own account before using either figure. At 3% the example's break-even occupancy would be 41.62%; the profit guide linked above compares the two fees.

Before you sign: lease permission and short-term rental rules

Check two things before any of the arithmetic matters: that your lease lets you sublet by the night, in writing, and that your city allows the kind of short-term rental you plan.

• The lease and the building. Airbnb's responsible hosting page for the United States tells hosts to "read your lease agreement and check with your landlord if applicable", and to check HOA or co-op rules for any "prohibition against subletting". It also suggests a rider to the contract.
• The city. Airbnb's page on legal and regulatory issues says some cities limit or prohibit short stays, and that "in many cities, you must register, get a permit, or obtain a license before you can list". I make no claim about any particular city; read your own city's short-term rental page.
• Taxes, permits and insurance. The same hosting page tells hosts to look up local taxes and business licence requirements, and says Airbnb's own host cover does not "take the place of homeowner's insurance, renter's insurance, or adequate liability coverage".

Put one-off permit and licence fees in other upfront costs and recurring ones, with any extra insurance, in other fixed costs. Unsure what your lease allows? Ask a licensed attorney before you sign.

Rental arbitrage spreadsheet formulas for Excel and Google Sheets

Five formulas rebuild the calculator. Layout: B2 = lease rent, B3 = other fixed bills a month, B4 = nightly rate, B5 = occupancy (64%), B6 = average stay in nights, B7 = cleaning fee charged, B8 = cleaning cost, B9 = supplies per stay, B10 = platform fee (15.5%), B11 = furnishing, B12 = deposit, B13 = other upfront costs, B14 = lease months, B16 = net kept per booked night, B17 = monthly profit.

The two rent ceilings are one line each: =B16*365*B5/12-B3 for the highest rent that breaks even on the month, and =B16*365*B5/12-B3-(B11+B13)/B14 for the highest rent that also repays the setup money within the lease. The payback formula uses IF so it prints "never" when profit is zero or negative; Microsoft's IF function page gives the syntax. Google Sheets accepts the same formulas.

Calculator, spreadsheet or revenue-data tool: which to use

Use a revenue-data tool or your own research to estimate nightly rate and occupancy, the calculator above to test a lease against them, and a spreadsheet when you want a saved file for each unit you view.

What to put in a rental arbitrage sheet: the thirteen inputs in the formula layout above, and as outputs monthly profit, break-even occupancy, both rent ceilings, startup cash, payback months and lease profit.

The paid option is the short-term rental profit calculator spreadsheet, $14.99 once, for Excel and Google Sheets. Its page names rental arbitrage as a use, "where the cost is rent rather than a mortgage". You enter nightly rate, occupancy, days per month, average stay, rent, utilities, internet, supplies, cleaning cost per turnover, platform fee, management fee and one-time furnishing cost. It returns net monthly and annual profit, margin, furnishing payback in months, break-even occupancy and break-even booked nights. It does not pull market data, and it has no lease-term profit, no deposit line and no highest-rent cell; those stay with the calculator on this page.

The two also count days differently. The sheet's shipped example runs a 30-day month; this page uses 365 days / 12. On a 30-day month the worked example books 19.2 nights instead of 19.5 and shows $689.60 a month, $42.63 less, with break-even at 49.62%. Use one basis per comparison.

If you own the property, the Airbnb vs long-term rental calculator guide compares nightly letting with a lease on the same house. For tracking the bills, see the Airbnb expense spreadsheet guide; for the monthly side as a file, the Airbnb profit spreadsheet.

Step-by-step: Rental Arbitrage Calculator: Highest Rent, Payback and Profit Over the Lease

1. Work out what one booked night leaves. Nightly rate after the platform fee, plus the cleaning fee after the platform fee minus cleaning and supplies, spread over the stay. Example: $159.88.
2. Turn occupancy into booked nights a month. 365 x occupancy / 12. At 64% that is 19.5 nights a month.
3. Subtract rent and other fixed bills. A year of nights, $37,346.80, less $28,560 of rent and bills is $8,786.80, or $732.23 a month.
4. Find break-even occupancy and the highest rent. Fixed costs for a year / (net per night x 365) = 48.94%. Rent plus monthly profit = $2,782.23, the rent at which profit is zero.
5. Add up startup cash and divide by monthly profit. Furnishing + deposit + other upfront costs = $13,000.00. Divided by $732.23, payback is 17.75 months.
6. Work out profit over the lease. Monthly profit x lease months, minus furnishing and upfront costs. Twelve months gives a loss of $2,163.20; the deposit is assumed returned.
7. Check the lease and the local rules. Confirm written permission to sublet and your city's short-term rental requirements before you sign or spend.

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