Short answer: An Airbnb beats a long-term lease only if the extra revenue survives the extra costs. Short-term rentals earn more per night but pay a platform fee (15.5% of bookings for most Airbnb hosts on the single fee), cleaning for every turnover, utilities, supplies and furnishing, and they sit empty between guests. Enter both scenarios above to see monthly cash flow side by side and the break-even occupancy where they tie.
Definition
A short-term rental (STR) is a furnished home rented to guests by the night or week, usually through a platform such as Airbnb or Vrbo, instead of to one tenant on a lease of a year or longer (a long-term rental, LTR). The host typically pays utilities, supplies and cleaning between stays.
By the numbers: Airbnb's help center says most hosts on its single fee structure pay 15.5% of the booking subtotal (checked October 26, 2026). IRS Publication 925 treats an activity with an average customer stay of 7 days or less as not a rental activity for the passive activity rules.
How the comparison works
Both sides share the price, loan, closing costs, property tax, insurance and HOA, so the mortgage payment is the same. What differs is how the money comes in and what it costs to collect it.
Nights booked per month = 365 ÷ 12 × occupancy
Airbnb revenue = nights × nightly rate + (nights ÷ average stay) × cleaning fee
Airbnb expenses = tax + insurance + HOA + utilities + revenue × (platform fee + manager + maintenance) + turnovers × cleaning cost
Long-term expenses = tax + insurance + HOA + rent × (vacancy + maintenance + management)
Net operating income (NOI) is revenue minus expenses. Cash flow is NOI minus principal and interest. Cap rate is yearly NOI ÷ price for both. Cash-on-cash is yearly cash flow ÷ cash invested, and for the Airbnb the furnishing and setup cost is added to the down payment and closing costs, so it needs more cash to earn the same return.
Break-even occupancy
Every booked night adds the nightly rate plus a share of the cleaning fee, minus the percentage fees and a share of the cleaning cost. The fixed costs (tax, insurance, HOA, utilities and the mortgage) are there whether or not anyone books. So Airbnb cash flow rises in a straight line with occupancy, and the calculator solves for two points:
Break-even occupancy = (long-term cash flow + fixed costs + P&I) ÷ (cash kept per booked night × 365 ÷ 12)
Below that occupancy the long-term lease earns more each month; above it the Airbnb does. The second figure is the occupancy at which the Airbnb cash flow is $0. If your realistic occupancy for the address is close to the break-even, the extra work and risk of hosting may not be worth it.
Worked example
The defaults are the US median home value of $360,600 with 20% down on a 30-year loan at 7.32% (Freddie Mac PMMS, week of October 22, 2026), the US median property tax of $3,211/yr (Census ACS 2024), insurance at 0.5% of value and 3% closing costs (FirstDoor assumptions). The long-term side rents for the US median 3-bedroom gross rent of $1,677/mo (Census ACS 2024) with 5% vacancy, 5% maintenance and 8% management, FirstDoor's standard defaults.
The short-term side is an illustration, not market data: $200 a night at 55% occupancy, 3-night average stays, a $100 cleaning fee against $90 of cleaning cost per turnover, $350/mo for utilities, supplies and internet, $20,000 to furnish, self-managed (0%), and Airbnb's 15.5% single host fee. Real nightly rates and occupancy vary enormously by address and season.
| Per month | Airbnb (example) | Long-term |
|---|---|---|
| Gross revenue | $3,903 | $1,677 |
| Operating expenses | $2,070 | $720 |
| Net operating income | $1,834 | $957 |
| Mortgage (P&I) | $1,982 | $1,982 |
| Cash flow | −$148 | −$1,024 |
| Cap rate | 6.1% | 3.2% |
| Cash invested | $102,938 | $82,938 |
| Cash-on-cash | -1.7% | -14.8% |
At these inputs Airbnb comes out ahead by $876/mo ($10,515/yr), but the Airbnb needs $20,000 more cash up front for furnishing. It books 16.7 nights and 5.6 stays a month, so the platform fee is $605 and cleaning $502. Break-even occupancy against the long-term lease is 36.5%, and the Airbnb cash flow hits $0 at 58.1%. Both lose money at today's rate on a median-priced home, which is common: see what good cash flow looks like. You can open the long-term numbers in the full deal score.
How occupancy changes the example
Same example, only occupancy changes. The last column is Airbnb cash flow minus the −$1,024/mo long-term cash flow:
| Occupancy | Airbnb cash flow | vs long-term |
|---|---|---|
| 30% | −$1,331 | −$306 |
| 40% | −$858 | $167 |
| 50% | −$385 | $640 |
| 60% | $88 | $1,113 |
| 70% | $561 | $1,586 |
| 80% | $1,034 | $2,059 |
If you would hire a manager or co-host, enter their percentage. Every point of fees comes off gross revenue, so it raises the break-even occupancy.
Airbnb's host fee, from Airbnb
Airbnb's help center article on service fees (airbnb.com/help/article/1857, checked October 26, 2026) lists two fee structures for stays:
| Single fee | The whole fee is deducted from the host payout. Most hosts pay 15.5%; remaining hosts typically pay 14% to 16%, and listings in Brazil and Mexico pay 16%. Airbnb says it is mandatory for most hosts, including those who use property management software. |
| Split fee | Most hosts pay 3% (4% for listings in Brazil and Mexico), and guests pay a service fee of 14.1% to 16.5% of the booking subtotal. |
Airbnb says it is moving all home hosts to the single fee and phasing out the split fee, so the calculator defaults to 15.5%. The fee is a percentage of the nightly price plus any fees the host charges, such as cleaning, and excludes taxes, which is how the calculator applies it. Other platforms charge differently, so enter your own rate.
Taxes work differently for short stays
The calculator is pre-tax, but the tax treatment of a short-term rental can differ from a long-term one:
- The 7-day rule. IRS Publication 925 (2025) says an activity isn't a rental activity for the passive activity rules if the average period of customer use is 7 days or less, or 30 days or less when you provide significant personal services. You figure the average by dividing total rental days by the number of rentals.
- Schedule C vs Schedule E. IRS Publication 527 (2025) says rental income generally goes on Schedule E, but if you provide substantial services primarily for the tenant's convenience, such as regular cleaning, changing linen or maid service, you report on Schedule C and may owe self-employment tax.
- Personal use. Pub 527 treats a unit as used as a home if your personal use is more than the greater of 14 days or 10% of the days rented at a fair price, which can limit deductions.
How these apply depends on your facts, so talk to a tax professional before you count on a tax result. For depreciation on either kind of rental, see the depreciation calculator.
Check local rules before you buy
Short-term rentals are regulated locally. Depending on the address, a city or county can require a permit or registration, limit or ban short-term stays, or charge lodging or occupancy taxes, and HOA or condo rules can prohibit them. Rules change, so read the current local code and your HOA documents, and ask your lender and insurer whether short-term guests are allowed under your loan and policy. A deal that only works as an Airbnb is a bet that the rules will still allow it.
Methodology and assumptions
- Same loan for both. Principal and interest use the standard amortization formula from FirstDoor's methodology; the long-term side is calculated with the same code as the full deal score. Investment loans often price higher than the PMMS average (see investment property mortgage rates).
- A month is 365 ÷ 12 nights. Occupancy is the share of all nights booked, averaged over a year, so seasonality is smoothed out.
- Percentage costs on gross revenue. Platform fee, manager and maintenance on the Airbnb side are percentages of nightly revenue plus cleaning fees. Long-term vacancy, maintenance and management are percentages of rent.
- Guest taxes are excluded. Enter the nightly rate before lodging taxes; taxes collected from guests are passed through, not income.
- Not included: income taxes, appreciation, loan paydown, rent or rate growth, a higher insurance premium for short-term guests, permit fees, furniture replacement, and the time hosting takes. Add any known costs to utilities or insurance.
- Example inputs. FirstDoor does not have a cited source for nightly rates, occupancy, cleaning, utilities or furnishing, so those defaults are placeholders. Price, rent, tax, rate and the Airbnb fee are cited below.
Frequently asked questions
How do I compare an Airbnb with a long-term rental?
Use the same price, loan, taxes and insurance for both. For the long-term side, take monthly rent and subtract vacancy, maintenance and management. For the Airbnb side, take nights booked times the nightly rate plus cleaning fees, then subtract the platform fee, cleaning per turnover, utilities and supplies, maintenance and any manager. Subtract the same mortgage from both and compare monthly cash flow and cash-on-cash return, counting furnishing as cash invested.
What is break-even occupancy for a short-term rental?
Here it is the share of nights you must book for the Airbnb to earn the same monthly cash flow as renting long-term. Each booked night adds the nightly rate plus a share of the cleaning fee, minus percentage fees and a share of the cleaning cost; the calculator solves for the occupancy where that covers the fixed costs and matches the long-term cash flow. If your realistic occupancy is below it, the long-term lease earns more.
How much does Airbnb charge hosts?
Airbnb's help center (checked October 26, 2026) lists two structures for stays. With the single fee, the whole fee comes out of the host payout: most hosts pay 15.5%, the rest typically 14% to 16% (16% in Brazil and Mexico). With the split fee, most hosts pay 3% (4% in Brazil and Mexico) and guests pay 14.1% to 16.5%. Airbnb says it is moving all home hosts to the single fee, so the calculator defaults to 15.5%.
Is Airbnb income taxed differently from long-term rent?
It can be. IRS Publication 925 says an activity is not a rental activity for the passive activity rules if the average period of customer use is 7 days or less, or 30 days or less with significant personal services. IRS Publication 527 says that if you provide substantial services mainly for the guest's convenience, such as regular cleaning, changing linen or maid service, you report on Schedule C instead of Schedule E and may owe self-employment tax. This calculator is pre-tax, so ask a tax pro.
Do I need a permit to run an Airbnb?
It depends on the address. Cities, counties, HOAs and condo boards can require permits or registration, limit short-term rentals, ban them, or charge lodging taxes, and the rules change. Check the local code, your HOA documents, your loan terms and your insurance before you buy a property for short-term rental.
Where do the default numbers come from?
Price, 3-bedroom rent and property tax are US medians (Census ACS 2024) and the rate is Freddie Mac's 30-year average (7.32% on October 22, 2026). The 15.5% platform fee is Airbnb's published single fee for most hosts. The nightly rate, occupancy, stay length, cleaning fee and cost, utilities and furnishing are example inputs, not market data, so replace them with numbers for your listing.
Sources
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Educational tool, not financial or tax advice. Short-term rental results depend on inputs FirstDoor can't verify for your address. Updated October 26, 2026.