property calculator

Airbnb ROI Calculator

Project monthly cash flow, Cap Rate, and Cash-on-Cash Return for short-term rental properties.

Formula Verified by Dr. Thomas Wright, PhD

Quick actions: Save inputs, view saved runs, print, share, or export results

Saved Runs

Inputs

Property & Financing

Purchase price$

Down payment (%)%

Mortgage interest rate (%)%

Rental Performance & Expenses

Average nightly rate$

Average occupancy rate (%)%

Monthly expenses (excl. mortgage)$

Airbnb host fee (%)%

Results

Cash-on-Cash Return

9.1%

Annual Cash Flow$6,338

Capitalization Rate (Cap Rate)7.9%

Monthly Gross Revenue$3,194

Monthly Airbnb Host Fee$96

Monthly Mortgage Payment$1,770

Monthly Cash Flow$528

Bookmark this Airbnb ROI Calculator

Save this page to compare the yield and return profiles of multiple prospective real estate listings as you analyze the market.

Formula

Airbnb ROI formulas

NOI = (Monthly Gross - Host Fee - Expenses) × 12. Cap Rate = NOI / Price. Cash-on-Cash = Annual Cash Flow / Down Payment.

Calculates rental yield, mortgage payments, operating expenses, and cash investment returns.

Step by step

How the calculation works

1Provide the home purchase price and down payment percentage.
2Input your mortgage interest rate to estimate financing costs.
3Enter the average nightly rate and projected annual occupancy percentage.
4List operating expenses (utilities, HOA, property tax, insurance, cleaning, maintenance).

Related guides

Learn more about this calculation

Guide

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

Underwrite short-term rentals like a professional. Learn how to calculate cap rate, monthly net cash flow, and occupancy-driven returns using actual vacation rental math.

Site Guide

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Learn the fastest reliable workflow for using Do The Calculation calculators, reading results, checking formulas, and using save, print, share, and export actions correctly.

Rent vs. Buy Guide

Renting vs. Buying: A Comprehensive Comparison

Learn the financial differences between rental ownership costs and standard renting options over multi-year horizons.

How to understand and use this calculator

How Short-Term Rental Yields are Calculated

Analyzing short-term rental (STR) profitability is distinct from traditional long-term leasing. STR investments depend on three main variables: Nightly Rates, Occupancy Rates, and Operating Expenses.

Unlike fixed monthly rental agreements, short-term rentals experience significant seasonal volatility. A property near a beach may operate at 95% occupancy during the summer but fall to 15% in winter. To evaluate viability, you must use a Blended Annual Occupancy Rate—the average occupancy across all 12 months. This tool factors in these seasonal shifts to estimate net monthly cash flows.

Cap Rate vs. Cash-on-Cash Return

Real estate investors use two primary metrics to compare properties: Capitalization Rate and Cash-on-Cash Return.

Capitalization Rate (Cap Rate): Measures the property's annual unleveraged return rate. It assumes you buy the property with 100% cash, excluding financing costs. The formula is:

$$\text{Cap Rate (\%)} = \frac{\text{Net Operating Income (NOI)}}{\text{Purchase Price}} \times 100$$

Cash-on-Cash Return: Measures the leveraged yield on the actual cash you invest out of pocket (down payment, closing costs, rehab expenses) under a mortgage:

$$\text{Cash-on-Cash (\%)} = \frac{\text{Annual Cash Flow}}{\text{Total Cash Invested}} \times 100$$

A high Cash-on-Cash rate indicates that mortgage debt leverage is working in your favor to multiply your return on capital.

Estimating Short-Term Rental Operating Expenses

Operating an Airbnb is more akin to hospitality management than passive landlording. Standard expenses include:

Platform Fees: Online Travel Agencies (OTAs like Airbnb or VRBO) charge host fees, typically 3% to 5% of gross bookings.

Turnover/Cleaning Fees: The cost to clean and restock between guests. While typically charged to the guest, hosts must track it as an operating flow.

Utilities & Amenities: High-speed internet, smart TVs, heating/cooling, water, landscaping, pool maintenance, and guest consumables (soaps, coffees).

Property Management: Short-term rental managers charge 15% to 30% of gross revenue, compared to 8-10% for long-term rentals.

The Risk of Local Short-Term Rental Regulations

Before purchasing an STR property, verify local municipal zoning ordinances. Many tourist-dense municipalities restrict short-term rentals, require commercial permits, enforce tax collections, or ban them entirely in residential zones. Ensure you have a long-term leasing backup plan in case local regulations change.

Related concepts

Net Operating Income

Annual rental revenues minus operating expenses, excluding mortgage payments.

Leverage

Using borrowed capital (mortgages) to increase the potential return on an investment.

Blended Occupancy

The annual average occupancy rate accounting for both peak and off-peak seasons.

Frequently Asked Questions

What is a good occupancy rate for Airbnb?+

A healthy average occupancy rate ranges between 60% and 75% depending on location, season, and listing optimization.

What expenses should I include in my Airbnb calculations?+

Include mortgage payments, property taxes, homeowner insurance, utilities (WiFi, water, electricity), cleaning fees, property management, OTA fees (3-5%), and a maintenance reserve.

How does Cap Rate differ from Cash-on-Cash return?+

Cap Rate evaluates the property assuming it is purchased entirely with cash, excluding financing. Cash-on-Cash calculates the return based strictly on your actual out-of-pocket cash outlay, taking mortgage leverage into account.

What is Net Operating Income (NOI)?+

NOI is the annual rental revenue minus operating expenses, excluding mortgage principal, interest, capital depreciation, and income taxes.

What is a good Cap Rate for a rental property?+

A good Cap Rate generally ranges from 5% to 10% depending on the market. Higher-risk areas target 8-10%+, while low-risk, premium neighborhoods might yield 4-6%.

How do cleaning fees affect my revenue?+

Cleaning fees are typically passed on to the guest. However, they inflate the total booking cost for travelers, which can reduce your competitiveness if set too high.

Should I hire an Airbnb property manager?+

Property managers handle guest messaging, check-ins, cleaning schedules, and listings for a fee of 15% to 30% of gross revenue, which directly reduces your net cash flow.

What is the 1% rule in real estate?+

An investment shortcut stating that a rental property should generate monthly rent equal to at least 1% of the total purchase price (e.g., $2,000/mo rent for a $200k home).

Can I write off Airbnb business expenses?+

Yes. Most operating expenses (cleaning, utilities, management fees, mortgage interest, depreciation) are tax-deductible against your rental income.

What is the danger of high seasonality?+

Properties in highly seasonal areas must generate enough cash during peak months to cover operating expenses and mortgage payments during off-peak seasons.

How to understand and use this calculator

How Short-Term Rental Yields are Calculated

Cap Rate vs. Cash-on-Cash Return

Real estate investors use two primary metrics to compare properties: Capitalization Rate and Cash-on-Cash Return.

Capitalization Rate (Cap Rate): Measures the property's annual unleveraged return rate. It assumes you buy the property with 100% cash, excluding financing costs. The formula is:

$$\text{Cap Rate (\%)} = \frac{\text{Net Operating Income (NOI)}}{\text{Purchase Price}} \times 100$$

Cash-on-Cash Return: Measures the leveraged yield on the actual cash you invest out of pocket (down payment, closing costs, rehab expenses) under a mortgage:

$$\text{Cash-on-Cash (\%)} = \frac{\text{Annual Cash Flow}}{\text{Total Cash Invested}} \times 100$$

A high Cash-on-Cash rate indicates that mortgage debt leverage is working in your favor to multiply your return on capital.

Estimating Short-Term Rental Operating Expenses

Operating an Airbnb is more akin to hospitality management than passive landlording. Standard expenses include:

Platform Fees: Online Travel Agencies (OTAs like Airbnb or VRBO) charge host fees, typically 3% to 5% of gross bookings.

Turnover/Cleaning Fees: The cost to clean and restock between guests. While typically charged to the guest, hosts must track it as an operating flow.

Utilities & Amenities: High-speed internet, smart TVs, heating/cooling, water, landscaping, pool maintenance, and guest consumables (soaps, coffees).

Property Management: Short-term rental managers charge 15% to 30% of gross revenue, compared to 8-10% for long-term rentals.

The Risk of Local Short-Term Rental Regulations

Related concepts

Net Operating Income

Annual rental revenues minus operating expenses, excluding mortgage payments.

Leverage

Using borrowed capital (mortgages) to increase the potential return on an investment.

Blended Occupancy

The annual average occupancy rate accounting for both peak and off-peak seasons.

Frequently Asked Questions

What is a good occupancy rate for Airbnb?+

A healthy average occupancy rate ranges between 60% and 75% depending on location, season, and listing optimization.

What expenses should I include in my Airbnb calculations?+

Include mortgage payments, property taxes, homeowner insurance, utilities (WiFi, water, electricity), cleaning fees, property management, OTA fees (3-5%), and a maintenance reserve.

How does Cap Rate differ from Cash-on-Cash return?+

What is Net Operating Income (NOI)?+

NOI is the annual rental revenue minus operating expenses, excluding mortgage principal, interest, capital depreciation, and income taxes.

What is a good Cap Rate for a rental property?+

A good Cap Rate generally ranges from 5% to 10% depending on the market. Higher-risk areas target 8-10%+, while low-risk, premium neighborhoods might yield 4-6%.

How do cleaning fees affect my revenue?+

Cleaning fees are typically passed on to the guest. However, they inflate the total booking cost for travelers, which can reduce your competitiveness if set too high.

Should I hire an Airbnb property manager?+

Property managers handle guest messaging, check-ins, cleaning schedules, and listings for a fee of 15% to 30% of gross revenue, which directly reduces your net cash flow.

What is the 1% rule in real estate?+

An investment shortcut stating that a rental property should generate monthly rent equal to at least 1% of the total purchase price (e.g., $2,000/mo rent for a $200k home).

Can I write off Airbnb business expenses?+

Yes. Most operating expenses (cleaning, utilities, management fees, mortgage interest, depreciation) are tax-deductible against your rental income.

What is the danger of high seasonality?+

Properties in highly seasonal areas must generate enough cash during peak months to cover operating expenses and mortgage payments during off-peak seasons.

Airbnb ROI Calculator

Inputs

Property & Financing

Rental Performance & Expenses

Results

Bookmark this Airbnb ROI Calculator

Airbnb ROI formulas

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Renting vs. Buying: A Comprehensive Comparison

Airbnb ROI Calculator

Inputs

Property & Financing

Rental Performance & Expenses

Results

Bookmark this Airbnb ROI Calculator

Key output metrics

Monthly Cash Flow Comparison

How to understand and use this calculator

How Short-Term Rental Yields are Calculated

Cap Rate vs. Cash-on-Cash Return

Estimating Short-Term Rental Operating Expenses

The Risk of Local Short-Term Rental Regulations

Related concepts

Frequently Asked Questions

Airbnb ROI formulas

How the calculation works

Learn more about this calculation

Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return

How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide

Renting vs. Buying: A Comprehensive Comparison

Key output metrics

Monthly Cash Flow Comparison

How to understand and use this calculator

How Short-Term Rental Yields are Calculated

Cap Rate vs. Cash-on-Cash Return

Estimating Short-Term Rental Operating Expenses

The Risk of Local Short-Term Rental Regulations

Related concepts

Frequently Asked Questions