Short-Term Rental ROI Calculator

The comparison that actually matters is net income, not gross revenue

Short-term rental listings can produce eye-catching gross revenue figures — $4,000 or $5,000 a month sounds dramatically better than a $1,800 long-term lease on the same unit. What that comparison leaves out is that short-term rentals carry a materially different cost structure, and once platform fees, more frequent cleaning, higher utility and furnishing costs, and the owner’s own time are counted, the gap between the two strategies is often far smaller than the gross numbers suggest.

This calculator runs both sides of that comparison directly, using the same property, so the number that comes out the other end is the one that actually determines which strategy makes more money.

Occupancy rate is the single input that matters most

Everything else in a short-term rental projection is relatively stable — nightly rate, cleaning cost, platform fee percentage — but occupancy rate varies enormously by market, season, and how actively the listing is managed, and it drives the majority of the revenue swing between a good projection and an optimistic one.

A strong, well-managed listing in a high-demand market can clear 65 to 75 percent occupancy year-round. A seasonal market, an oversaturated listing area, or a newly listed property still building reviews can sit well below 50 percent, particularly in its first several months. Pulling actual comparable data from short-term rental market research tools for listings similar to yours in the same specific area is far more reliable than assuming a national average applies locally.

Platform fees and why they matter more than they first appear

Short-term rental platforms typically charge a host service fee in the single digits as a percentage of the booking subtotal, which sounds modest until it is applied against gross revenue every single month rather than once.

This is a real, recurring cost that a long-term lease simply does not incur — a property manager fee for a long-term rental, where used, is typically comparable or lower as a percentage, and applies to a much larger monthly figure with far fewer transactions generating it. Comparing net-of-fee short-term income against net-of-fee long-term income, rather than gross figures on either side, is the only comparison that reflects reality.

Cleaning fees usually net out, and that surprises people

A cleaning fee charged to guests looks like additional revenue, and in a narrow accounting sense it is — but it exists specifically to cover the real cost of cleaning the unit between stays, and for most hosts the fee charged and the cost incurred are close to equal.

The actual profit lever in a short-term rental is the nightly rate and occupancy, not the margin on cleaning fees. Where a genuine gap exists — charging guests more than actual cleaning costs, or cleaning the unit yourself rather than hiring it out — that margin is real and worth counting, but it should not be mistaken for the primary driver of returns the way nightly rate and occupancy are.

What this calculator does not include, and why that matters before committing

Two categories of cost sit outside this model entirely, and both can be substantial enough to change the answer.

Property management or co-hosting fees, where used, commonly run 15 to 25 percent of revenue — a meaningfully higher share than typical long-term property management, reflecting the greater operational intensity of guest communication, check-in coordination and more frequent turnovers. Furnishing and initial setup costs are a real one-time investment specific to short-term rentals that a long-term lease, often rented unfurnished, does not require at all.

Beyond the financial model, local short-term rental regulations vary dramatically by city and even by neighborhood — some jurisdictions cap the number of nights allowed, require licensing, or prohibit the use entirely in certain zoning categories. Confirming the specific rules for your property’s exact location before committing capital to a short-term rental strategy is not optional due diligence; some markets have shut down existing short-term rental operations with real financial consequences for owners who did not verify current rules first.

Where this fits into a wider rental strategy decision

Short-term rental is one of several ways to generate income from a property, and it competes directly against a straightforward long-term lease — which is exactly what this calculator compares.

For a property where you occupy part of it and rent the rest, the house hacking calculator models a different structure entirely, offsetting your own housing cost rather than producing standalone rental profit. For any structure, once net monthly income is known, the rental cash flow calculator and cash-on-cash return calculator put that figure in context against the capital invested in the property.