What is a good occupancy rate for an Airbnb?

Most short-term rental investors target 60–75% occupancy as a baseline. A safer underwriting practice is to confirm the deal still cash flows at 55–60% occupancy so it doesn't depend on peak-season performance. Actual occupancy varies widely by market, seasonality, and listing quality.

How much more does an Airbnb make than a long-term rental?

In the right market, a short-term rental can gross 1.5–3x what the same property earns as a long-term rental. However, expenses are higher too — typically 30–50% of gross revenue for STR versus 15–25% for long-term — so always compare on net cash flow, not gross.

What expenses should I include for a short-term rental?

Include mortgage, property taxes, insurance (STR-specific), utilities, internet, cleaning and turnover labor, supplies and restocking, platform/management fees, software, permits, and a maintenance/vacancy reserve. STR expenses run higher than long-term rentals because of cleaning, furnishing, and higher turnover.

How do I calculate cap rate on an Airbnb?

Cap rate = Annual NOI ÷ Purchase Price × 100, where NOI is gross short-term rental revenue minus all operating expenses (excluding mortgage principal and interest). It lets you compare an STR to long-term rentals on equal footing.

Is Airbnb still a good investment in 2026?

It depends on the market and regulation. Markets with tightening short-term rental rules and rising supply have compressed returns, while regulation-friendly tourist and event markets remain strong. Always underwrite conservatively, check local STR ordinances, and stress-test at 55–60% occupancy before buying.

Free Airbnb & Short-Term Rental Calculator

Estimate annual revenue, cash flow, cap rate, and cash-on-cash return on any short-term rental before you buy.

Quick Answer: Airbnb gross revenue = 365 × occupancy rate × average nightly rate. Subtract operating expenses (30–50% of gross for STR) to get net operating income, then divide by purchase price for cap rate or by cash invested for cash-on-cash return.

Airbnb Income & Cash Flow Calculator

Average Nightly Rate — ADR ($)

Occupancy Rate (%)

Underwrite at 60–70%; stress-test at 55–60%

Monthly Operating Expenses ($)

Mortgage, utilities, insurance, software, management

Cleaning Fee per Stay ($)

Average Nights per Stay

Purchase Price ($) — optional

For cap rate

Cash Invested ($) — optional

Down payment + closing + furnishing, for cash-on-cash return

How to Underwrite a Short-Term Rental

Short-term rentals can out-earn long-term rentals 1.5–3x in the right market, but expenses are higher and revenue is seasonal. The key is conservative occupancy and a full expense picture. Compare the result against our rental property calculator and cap rate calculator to decide between STR and long-term.

The Revenue Formula

Gross Revenue = 365 × Occupancy % × Nightly Rate

NOI = Gross Revenue − Operating Expenses

Worked Example

A 3-bed cabin rents for $180/night at 65% occupancy, with $2,000/month in operating costs:

Gross revenue = 365 × 0.65 × $180 = $42,705
Operating expenses = $2,000 × 12 = $24,000 (plus cleaning turnover labor)
NOI ≈ $42,705 − $24,000 = $18,705/year (~$1,559/month)
On a $400,000 purchase, cap rate ≈ $18,705 ÷ $400,000 = 4.68%

Underwriting Rules of Thumb

Occupancy: Underwrite at 60–70%, confirm the deal survives at 55–60%.
Expenses: Budget 30–50% of gross for STR (vs 15–25% for long-term).
Regulation: Always confirm local short-term rental ordinances before buying.

Frequently Asked Questions

How do you calculate Airbnb income?

Multiply 365 nights by your occupancy rate and average nightly rate. At $180/night and 65% occupancy that's 365 × 0.65 × $180 = $42,705 gross per year. Subtract operating expenses to get net income.

What occupancy rate should I use?

Underwrite at 60–70% and stress-test at 55–60% so the deal isn't dependent on a perfect peak season. Actual occupancy varies by market, seasonality, and how well the listing is managed.

Should I do short-term or long-term rental?

Compare them on net cash flow, not gross. STR can earn more but carries higher expenses and regulatory risk. Run the same property through our rental property calculator to see the long-term number side by side.