Short-Term vs. Long-Term Rental: Which Makes More Money?

There's no universal answer - it depends on your market, your costs, and how much occupancy you can realistically sustain. Short-term rental usually grosses more per month than a long-term lease on the same property, but it also carries a booking platform's fee, cleaning and turnover costs between every guest, real month-to-month income variance, and ongoing work a signed 12-month lease doesn't.

Is Airbnb more profitable than long-term rental? Often, yes - if you can sustain enough occupancy to clear the extra costs. But "often" isn't "always," and the occupancy you'd need varies a lot by nightly rate, platform fee, and what a long-term tenant would actually pay for the same unit. The calculator above runs both scenarios side by side using your actual numbers and solves directly for the occupancy where short-term catches up to what you'd net from a long-term tenant instead, rather than leaving you to nudge a slider until the two numbers happen to match.

If you're weighing this for a specific property, the honest way to answer it is to run your own numbers above, not lean on a rule of thumb calculated for someone else's market. Two things move the answer more than anything else: your realistic occupancy (not the occupancy you'd need on a great month, but the one you'd actually average across a full year, including the slow season), and what a long-term tenant would genuinely pay for the same unit today, not what it rented for three years ago.

Short-term rental's real income isn't gross nightly revenue - it's gross revenue minus the platform's booking fee, your cleaning and turnover costs, and any fixed costs you carry as the host. Nightly rate times nights booked, plus cleaning fees collected, gives gross short-term revenue. Subtract the platform's fee (about 15.5% on Airbnb's host-only model, applied to your total payout including the cleaning fee, not the nightly rate alone, which is where quicker estimates go wrong), your actual per-turnover costs, and any fixed monthly costs you carry as the host. What's left is short-term net income.

Long-term rental's calculation looks simpler on paper but is easy to get wrong in one place: vacancy. A unit that rents for $3,500 a month doesn't collect $42,000 a year - it collects that minus however long it sits empty between tenants, which this calculator accounts for as a vacancy percentage rather than assuming a fully occupied year. Subtract a property manager's cut, routine maintenance, and any turnover cost between tenants, and what's left is long-term net income.

Both sides then subtract the same shared carrying costs - mortgage, property tax, HOA - since those apply whichever way you rent the unit out.

Two things worth stating plainly. First, this isn't a straight-line comparison: short-term revenue scales with occupancy, while long-term rental income mostly doesn't - a signed lease pays the same whether you're an attentive landlord or an absent one. That means there's a specific occupancy percentage where the two cross over, and this calculator solves for it directly. Second, the ratio against your shared costs below isn't labeled "ROI," because it isn't one - it's a coverage ratio (how many times your operating income covers your fixed obligations, the same concept lenders call a debt-service coverage ratio), and we name it that way so it means what it says.

Break-even occupancy, in this comparison, is the percentage of nights your short-term rental needs booked to match - not merely cover its own costs, but match - what the same property would net as a long-term rental.

Below that occupancy, a signed lease earns more, with none of the operational work. Above it, short-term rental pulls ahead, and every additional booked night widens the gap. It's a more useful number than either net-income figure alone, because it turns "which one makes more" into a concrete target you can hold your actual booking calendar against.

Coverage of fixed obligations is how many times your operating income - revenue minus every cost except your mortgage, property tax, and HOA - covers those shared costs, for each rental strategy.

A coverage ratio of 2.0x means that strategy's income alone would cover your mortgage, tax, and HOA twice over; a ratio under 1.0x means it wouldn't cover them at all, and you'd be relying on other income to make up the gap. It's the same idea a lender uses when underwriting an investment property loan, applied here to compare two ways of renting the same unit, side by side, rather than to qualify for financing. If you haven't entered a mortgage, tax, or HOA payment above, this shows as not applicable, since there's nothing to check coverage against yet.

Short-term rental risk. Regulations can change under you - cities and HOAs have tightened or banned short-term rentals with as little as a few months' notice in some markets, and a permit held today isn't guaranteed next year. Income is genuinely seasonal and can swing month to month in a way a fixed lease payment never does. And the work is real and recurring - guest messaging, cleaner coordination, and pricing adjustments don't stop.

Long-term rental risk. A problem tenant is a slower-moving risk than anything on the short-term side: nonpayment or an eviction can take months to resolve depending on your state, and during that stretch you're carrying the mortgage with no rent coming in, something a short-term booking's worst case doesn't approach. Vacancy between leases is real too, even if this calculator's default vacancy assumption is modest. And a 12-month lease locks in today's rent even if the local market moves up during the term.

Neither side is risk-free, and the numbers above compare income assuming both scenarios go roughly as planned - they don't price these risks in directly. Weigh them against how much risk you're comfortable carrying, not just which side nets more on paper.

There's also a hybrid risk worth naming: switching a long-term rental to short-term and it not working out is rarely a clean reversal. Re-listing for a long-term tenant after a stretch of short-term use can mean a vacancy gap while you find one, and if you've furnished the unit for guests, that furniture may not suit an unfurnished-lease market. Treat a switch in either direction as a real decision with switching costs, not a free option to try one side and fall back to the other if it doesn't pan out.

Want your short-term side's exact net profit and RevPAN, not just this comparison? Run the full Airbnb profit calculator → Pricing the cleaning-fee input above? Work out your true cleaning cost per turnover → It feeds directly into the short-term costs group. The Rental Arbitrage Calculator and Airbnb Fee Calculator are next in the build order. Browse all Airquerai tools →

Guessing at your market's occupancy or nightly rate? Get real occupancy and ADR data for your market →

Further reading: Short-Term Rental Metrics: The Investor's Glossary defines the terms this calculator uses. How to Analyze a Short-Term Rental Market Before You Buy is for hosts still deciding whether to buy.