What a short-term rental actually nets after platform fees, management, cleaning turns, and fixed costs, and the occupancy where it beats a long-term lease.
Net income after platform, management, cleaning & operating costs, before the mortgage
$0/moshortfall
Booking revenue (yearly)
ADR × booked nights occupancy is the vacancy factor–
Fees on revenue
− Platform / host fee–
− Property management–
− Repairs & maintenance–
Cleaning (per turn, netted against guest fees)
− Cleaning cost × turns–
+ Guest cleaning fees–
Net cleaning–
Owner-paid operating costs
− Fixed operating costs–
Net operating income–
Net margin net ÷ revenue–
− Mortgage payment (P&I)–
Cash flow after mortgage–
Return & comparison
Breakeven occupancy vs lease–
Revenue to beat the lease–
Cash invested down + furnishing–
Cash-on-cash return–
Conservative · Expected · Optimistic
STR revenue is seasonal and hard to pin down, so stress it: the low case drops occupancy 10 points and ADR 10%, the high case lifts each. Everything else held constant; your expected case is highlighted.
Scenario
Net / mo · CoC
STR vs. a long-term lease
Costs you pay under either strategy (the mortgage, the property tax bill, HOA dues) cancel. What's left is the STR's own operating stack, including the STR insurance policy, plus furnishing amortized over its life, measured against the lease's full rent.
Booked nights = 365 × available-night occupancy; turns = nights ÷ average stay. Booking revenue is nightly rate × booked nights (occupancy already is the vacancy factor, so nothing is discounted twice). Platform, management, and repairs are charged as a percent of that revenue; cleaning is a per-turn cost netted against the cleaning fee guests pay; owner-paid operating costs (tax, STR insurance, all utilities, supplies, software, HOA, lawn/pool) come out after. What remains is the net this page shows, with every line itemized.
Why aren’t cleaning fees and occupancy taxes counted as income?
Occupancy and lodging taxes are collected from the guest and remitted to the city; they pass through you and are never your income, so they are left out of revenue entirely. The cleaning fee a guest pays isn’t profit either; it reimburses the cleaner. We net it directly against the per-turn cleaning cost, so if your fee over-covers cleaning the surplus helps, and if it under-covers, the gap is a real cost. Only nightly booking revenue is treated as income.
What management and platform fees are realistic for an STR?
Full-service short-term rental management typically runs 20–30% of revenue (far more than the 8–10% of a long-term rental) because someone is handling pricing, guest messaging, and turnovers. The platform fee is about 3% under Airbnb’s classic split, or roughly 14–16% on the host-only model. Set management to 0 if you self-manage, but then budget your own time. STR operating costs commonly eat about half of revenue.
What does “revenue to beat a long-term lease” mean?
It’s the annual booking revenue the STR must clear so its net matches what the property earns as a long-term rental. Costs you pay under either strategy (the mortgage, the property tax bill, HOA dues) cancel, so they are left out; what remains is the STR’s own operating stack (platform and management fees, cleaning, utilities, supplies, software, the STR insurance policy) plus the furnishing, amortized over its useful life. The lease is taken at its full rent, with no lease-side vacancy, management or landlord insurance deducted, which makes this a demanding test for the STR. Below that revenue, the extra work of short-term renting earns you nothing over a simple lease.
Does the cash-on-cash return include my mortgage?
Only if you enter it. Net income here is before debt service, so with no mortgage payment entered the ratio is labeled cash-on-cash before debt service, which equals your real return only on an all-cash purchase. Enter your monthly principal and interest (tax and insurance are already above) and the calculator subtracts it, showing cash flow after the mortgage and the cash-on-cash return on your down payment, closing costs and furnishing.
Why is furnishing not an operating cost?
Furnishing and startup ($10–40k for a full unit) is invested capital, not a recurring bill, so it belongs in the cash-on-cash denominator alongside your down payment, exactly where this calculator puts it. It would be double-counting to also subtract the whole amount as an annual expense. For the long-term-lease comparison only, we amortize it over a furniture life so the two strategies are judged on the same footing.
Why use yearly-average ADR and occupancy, and what about regulations?
Short-term markets are strongly seasonal: a peak-month rate at peak-month occupancy overstates the year badly. Use full-year averages from your market research and lean on the conservative/expected/optimistic band rather than a single guess. Separately, many cities license, cap, or ban short-term rentals and the rules change; nothing here models regulatory risk, so verify what your city and HOA allow, and check what the deal looks like if you were forced to convert to a long-term lease.