🏠 PROPERTY INVESTMENT

Short-Term vs Long-Term Rental ROI

Q: What occupancy rate do I need for STR to beat LTR?

Most STRs need above 60-70% occupancy to outperform a well-priced long-term rental after all costs. The exact break-even depends on your nightly rate, cleaning costs, and local LTR rents.

Q: Are STR regulations something I need to check before deciding?

Yes. Many cities now require STR permits, cap annual nights, or restrict STR in residential zones. Always verify your local council's current rules before committing to a short-term rental strategy.

Q: Does this calculator account for taxes on rental income?

No, it calculates pre-tax net operating income. Both STR and LTR income is taxable with different deductible expenses. Consult a tax professional for your specific tax position.

Compare Airbnb/short-term rental income against traditional long-term leasing on the same property — see which strategy actually puts more money in your pocket after expenses.

🏘️STR vs LTR Comparison

Enter property details once, then fill in STR and LTR revenue estimates separately. Expenses that differ between strategies are split out below.

Property Basics

Property Value ($)

Annual Mortgage / Holding Cost ($)

Annual Property Tax ($)

Annual Insurance ($)

Short-Term Rental (STR)

Avg Nightly Rate ($)

Occupancy Rate (%)

Platform Fees % (Airbnb etc.)

Cleaning & Supplies /mo ($)

STR Management / Additional Costs /yr ($)

Long-Term Rental (LTR)

Monthly Rent ($)

Vacancy Rate (%)

Property Management % (if using agent)

Annual Maintenance ($)

Please fill in the required fields.

STR Net Income

0% ROI

LTR Net Income

0% ROI

STR vs LTR: The Numbers Most Landlords Miss

✓ Calculation methodology cross-checked against standard real estate investment analysis frameworks — last checked June 2026.

A short-term rental (STR) listed on Airbnb or Vrbo can generate a higher gross nightly rate than a long-term tenancy — but gross revenue is the wrong number to compare. STRs carry costs that long-term rentals don't: platform commission (typically 14–16%), professional cleaning after every stay, more frequent maintenance, higher insurance premiums, and in many markets, short-term rental permits and council fees. A property that earns $55,000 gross as an STR might net less than the same property renting for $2,200/month long-term once those costs are counted.

The three numbers that actually matter for the comparison are net operating income (revenue minus all operating expenses), cash-on-cash return (net income after financing divided by equity invested), and gross yield (annual gross revenue divided by property value). This calculator computes all three for both strategies side by side using your actual inputs, rather than asking you to trust industry averages.

Key Cost Differences by Strategy

Cost Category	Short-Term Rental (STR)	Long-Term Rental (LTR)
Platform commission	14–16% of revenue	None
Cleaning	After every stay (~$80–200 per clean)	Once per tenancy change
Furnishing	Full furnishing required	Unfurnished (usually)
Insurance	STR-specific policy (higher premium)	Standard landlord policy
Management effort	High (messaging, turnover, reviews)	Low (or outsourced for ~10%)
Regulatory risk	High (many cities are restricting STR)	Low

← Swipe to see all columns

Worked Example

$500,000 property, $2,000/mo mortgage, STR $180/night at 65% occupancy vs LTR $2,200/mo

STR Gross:     $180 × 365 × 0.65 = $42,705
Platform fee:  $42,705 × 15% = $6,406
Cleaning:      $600 × 12 = $7,200
STR Net:       $42,705 − $6,406 − $7,200 − $24,000 − $6,000 − $2,400 = −$3,301LTR Gross:     $2,200 × 12 × 0.95 = $25,080
Management:    $0
Maintenance:   $3,000
LTR Net:       $25,080 − $3,000 − $24,000 − $6,000 − $2,400 = −$10,320

In this example, STR actually beats LTR on net income — but only because occupancy and nightly rate are strong. At 50% occupancy the result reverses completely.

One factor this calculator doesn't model: regulatory risk. Cities across the US and Australia have been tightening STR rules — requiring permits, capping night counts, or banning STR in residential zones entirely. Before committing to a short-term rental strategy, verify your local council's current STR rules. Resources like Airbnb's local law guidance and your state's planning department are starting points, but always confirm with a local property manager or solicitor. For the broader investment decision, pair this tool with the Cap Rate Calculator and the Rental Property Cash Flow Calculator.

Frequently Asked Questions

Is short-term rental always more profitable than long-term?+

Not after expenses. STRs generate higher gross revenue per night but carry platform fees (typically 14–16%), cleaning costs after every stay, furnishing, higher insurance, and more management time. The net income comparison depends heavily on your local occupancy rate, nightly rate, and operating costs.

What occupancy rate do I need for STR to beat LTR?+

It depends on your nightly rate, cleaning costs, and local LTR rents. As a rough guide, most STRs need above 60–70% occupancy to outperform a well-priced long-term rental after all costs. Use this calculator with a range of occupancy assumptions to find your break-even point.

What is cap rate and how does it relate to rental ROI?+

Cap rate is net operating income divided by property value, expressed as a percentage. It measures a property's income-generating potential independently of financing. ROI (return on investment) factors in how much cash you've actually put in (down payment plus costs) rather than the full property value.

Are STR regulations something I need to check before deciding?+

Yes — this is one of the most important factors this calculator can't model. Many cities now require STR permits, cap annual nights, or restrict STR in certain residential zones. Always verify your local council's current rules before committing to a short-term rental strategy.

Does this calculator account for taxes on rental income?+

No — it calculates pre-tax net operating income. Both STR and LTR income is taxable, though the deductible expenses differ between strategies. Consult a tax professional for your specific tax position.