Short-Term Rental Calculator
Gross revenue against annual rent is the wrong comparison. This one is net against net.
The property
Revenue
Costs a lease never has
Fixed costs & the lease
Short-term insurance costs more than a landlord policy, and a long-term tenant pays their own utilities and internet.
Assumptions
Short-term cash flow
$2,762
$80,590 gross · 66.90% expense ratio
The lease would do
-$9,503
Short-term grosses 2.28× the rent
$12,265 more than the lease. Gross revenue is 2.28 times the rent; the cash flow difference is not. That gap is what you are being paid to run a small hospitality business.
Needs 65.72% occupancy to break even. Against the 70.00% assumed, that is 4.3 points of slack across a whole year — one soft season closes it.
| Nights booked | 256 across 85 stays |
|---|---|
| Gross revenue | $80,590$221 per available night |
| Platform & management | − $20,148 |
| Cleaning, supplies & maintenance | − $16,647 |
| Fixed costs | − $17,120 |
| Net operating income | $26,675 |
| Debt service | − $23,913 |
| Cash invested | $131,000Furnishings included — a lease does not need them |
| Cash-on-cash | 2.11% |
| Break-even occupancy | 65.72% |
Estimates only. Nightly rate and occupancy are forecasts, seasonality is not modelled, and short-term rental regulation changes fast — some markets have banned or capped it since you last looked. Check the local rules before you buy, not after. Not investment advice.
The gross multiple and the cash flow multiple are different numbers
A short-term rental grosses two or three times what the same house would rent for on a lease. That figure is true, it is the one that gets quoted, and on its own it is close to meaningless — because a short-term rental carries an expense load a lease simply does not have.
On the default scenario the property grosses $80,590 against a lease that would gross $35,400. A multiple of 2.28. Then:
- Platform fee on every booking.
- Management at 22%, not the 8 to 10 a lease pays — about $17,730, more than the entire expense load of the long-term alternative.
- Cleaning on every turnover. Guests pay a fee toward it; it rarely covers the cost, and 85 stays a year is 85 cleans.
- Utilities and internet, which a long-term tenant pays themselves.
- Furniture that wears out and gets replaced on a schedule.
Operating expenses come to 66.9% of gross revenue. Cash flow lands at about $2,762 a year against the lease’s −$9,503. The short-term rental is genuinely better by roughly $12,265 — real money, and nothing like 2.28 times anything.
That $12,265 is the honest question. It is what you are being paid to run a small hospitality business: pricing, listings, guest messaging, turnover coordination, the occasional 2am call. Some people find that a good trade. The point is to know what the trade is, rather than to see a gross figure and assume the profit scaled with it.
The number that worries me most on this page is the break-even occupancy: 65.7% against the 70% assumed. Four points of slack across an entire year. A new competitor, a soft season, a platform ranking change, or two months of a slow market closes that gap and the property is losing money. A long-term lease at 100% occupancy with one tenant does not have that shape of risk.
Two things this cannot model. Seasonality — annual averages hide the fact that many markets earn most of the year’s revenue in four months. And regulation, which is the risk most likely to end the strategy outright: cities have banned short-term rentals, capped nights, required primary residency, or introduced permit caps, sometimes quickly. Check what is permitted before you buy, and know what the property does as a long-term rental — because that is your fallback, and on these numbers the fallback loses money.
Methodology
- Nights booked = 365 × occupancy. Stays = nights ÷ average stay length, which drives the number of cleans.
- Gross revenue = nightly rate × nights + cleaning fees charged across stays.
- Percentage expenses — platform, management, supplies, maintenance — apply to gross revenue. Cleaning applies per stay.
- Break-even occupancy solves for the nights at which contribution covers fixed costs and debt service, where contribution per night includes the cleaning fee guests pay and nets off the cleaning cost per night. Cleaning is variable, not fixed.
- The long-term comparison applies an expense ratio to the rent and adds back the fixed costs an owner still carries — taxes, insurance, dues — but not the utilities and internet a tenant pays.
Not modelled: seasonality, ramp-up in year one before reviews accumulate, damage and insurance claims, occupancy taxes, licensing and permit fees, or regulatory change. Furnishing is included in cash invested because it is capital the strategy requires and a lease does not.
Frequently asked questions
- Is a short-term rental more profitable than a long-term one?
- Usually more profitable and much less so than the gross revenue suggests. On the default scenario the property grosses 2.28 times what it would rent for annually and the cash flow difference is about $12,265 — real money, but nothing like 2.28 times. The gap between those two multiples is the entire subject of this page.
- What expenses does a short-term rental have that a lease does not?
- A platform fee on every booking. Management at 20 to 25 percent rather than 8 to 10. A cleaning cost on every turnover. Consumables and restocking. Utilities and internet, which a long-term tenant pays themselves. And furniture that wears out on a schedule and gets replaced. Together they push the expense ratio toward 65 to 70 percent of gross revenue.
- What occupancy do I need to break even?
- The tool computes it from your own numbers, and the answer is often uncomfortably close to the occupancy you assumed. On the default scenario it needs 65.7 percent against the 70 percent projected — about four points of slack across a whole year. One soft season, one new competitor down the street, or one platform algorithm change closes that gap.
- Should I include furnishings in cash invested?
- Yes. Furnishing a property properly is $20,000 to $40,000 that a long-term rental never spends, it happens before the first booking, and it has to be replaced periodically. Leaving it out of the denominator inflates the cash-on-cash return on precisely the strategy that required the extra capital.
- How much does self-managing change the picture?
- A great deal, and that is the honest tension. Management is the single largest line — on these numbers about $17,730 a year. Self-managing recovers most of it, and what you are recovering is a wage for guest messaging, turnover coordination, pricing and the occasional 2am problem. It is income, not savings, and the deal has to still work if you ever stop.
- What about regulation?
- It is the risk this calculator cannot model and the one most likely to end the strategy outright. Cities have banned short-term rentals, capped nights, required primary residency, or imposed permit regimes with hard caps — often at short notice. A property that only works as a short-term rental is a property with regulatory risk concentrated in a single line of its pro forma. Check the local rules before buying, and know what the long-term numbers look like as a fallback.
Put this calculator on your site
Free to use on any site, no permission needed and no attribution requirement beyond the credit line included below. Paste this wherever the calculator should appear.
<iframe src="https://investorlabs.io/embed/short-term-rental-calculator/" title="Short-Term Rental Calculator by InvestorLabs" width="100%" height="720" loading="lazy" style="border:1px solid #e5e7eb;border-radius:8px;max-width:100%"></iframe>
<p style="font:14px/1.5 system-ui,sans-serif;margin:8px 0 0">Calculator by <a href="https://investorlabs.io/tools/short-term-rental-calculator/">InvestorLabs</a></p>
<script src="https://investorlabs.io/embed.js" async></script>The last line is optional — it resizes the frame to fit the calculator as answers appear. Without it the frame keeps the fixed height above and scrolls instead.