How it is calculated
Short-term revenue = 365 × occupancy × nightly rate. Turnovers = nights sold ÷ average stay. Short-term costs = turnovers × cleaning, plus platform and management fees as a percentage of revenue, plus the other annual costs a short-term rental carries.
Long-term net = monthly rent × 12 × (1 − vacancy), minus the management fee on that rent and the other annual costs. Break-even occupancy is where the short-term net equals the long-term net.
A worked example
A flat earns 180 a night at 60% occupancy with three-night stays: 219 nights and 39,420 of revenue. Seventy-three cleanings at 90, a 3% platform fee, a 20% co-host fee and 9,000 of other costs leave a short-term net of about 14,783.
Let long-term at 2,200 a month with 4% vacancy, an 8% management fee and 2,500 of costs, the same flat nets about 20,816. Here the long-term let wins by about 6,000 a year, and the short-term rental would need about 75% occupancy to match it.
What the numbers leave out
Regulation can decide the question before the arithmetic does: many cities cap the nights a home can be let short-term, require a licence, or ban it outright in some zones. Taxes differ too, from tourist tax to different income-tax treatment. Short-term income is also more seasonal and more exposed to a drop in demand, while a long-term tenancy comes with tenant protections that limit flexibility. A mid-term let of one to six months sits between the two; see mid-term rental software.
Running either from one system
Portfolios often move a property between models as rules and demand change. Keeping short stays, mid-term stays and leases in one calendar and one ledger means switching strategy does not mean switching software: see short-term rental management software and landlord software. For tourist tax on short stays, use the tourist tax calculator.
Common questions
Is Airbnb more profitable than long-term renting?
Sometimes. Short-term rentals bring in more gross revenue but cost much more to run. Whether they earn more depends mostly on occupancy, nightly rate, fees and local rules.
What occupancy does a short-term rental need to beat a long-term let?
It depends on the property. The calculator shows the break-even occupancy; in the worked example it is about 75%.
Which costs are higher for short-term rentals?
Cleaning per turnover, platform fees, higher management fees, utilities, internet, supplies, furnishing, and in many places licences and tourist tax administration.
Does the calculator include mortgage and tax?
No. It compares operating net income only, which is the same for both models whatever the financing. Tax treatment can differ and should be checked separately.
Done by hand once. Done automatically from now on.
Run short stays, mid-term stays and leases in one calendar and one ledger, so changing strategy does not mean changing software.