How This Calculator Works
Short-term rentals can be lucrative, but income often fluctuates with seasonal demand and booking platforms’ commission structures. This calculator helps you predict typical monthly profit by combining nightly rates, average occupancy, fees, and routine expenses. Adjust the inputs to match your market conditions and property costs to see whether hosting is worth your effort.
The Profit Formula
The tool multiplies your nightly rate by the expected occupied nights each month. It assumes 30 days per month, so occupied nights equal the occupancy rate times 30. We then calculate how many guest stays occur by dividing occupied nights by the average nights per booking. Your total revenue includes both the nightly charges and cleaning fees collected from each stay.
We deduct platform fees and operating expenses to obtain net profit. Written in mathematical form:
Here is occupancy rate as a decimal, is the average stay length, and represents total revenue before deductions. The resulting profit margin is simply profit divided by gross revenue.
Example Monthly Breakdown
| Metric | Amount |
|---|---|
| Occupied Nights | 18 |
| Bookings | 6 |
| Gross Revenue | $2,700 |
| Net Profit | $1,600 |
In this example, a $150 nightly rate with 60% occupancy generates 18 booked nights. If guests typically stay three nights and you charge a $50 cleaning fee per booking, your gross revenue approaches $2,700. After platform fees and $500 in monthly costs, net profit sits around $1,600, leaving a healthy margin for the owner.
If you hire a property manager, their fee reduces that profit but can save you time and hassle. Enter a management percentage above to see the effect on your bottom line.
Accounting for Taxes and Maintenance
Many jurisdictions require hosts to collect lodging or occupancy taxes on short-term stays. These percentages may be remitted monthly or quarterly and can significantly erode revenue if left out of calculations. The calculator subtracts a user-specified tax rate from gross income so you can estimate the true net. In addition to taxes, prudent hosts set aside a maintenance reserve—often 5–10% of revenue—to handle repairs, appliance replacements, or emergency callouts. By entering a maintenance percentage, you can simulate how these reserves affect your profit margin and ensure that unexpected costs do not derail your business.
Mortgage and Fixed Obligations
If the property carries a mortgage, that payment can dominate monthly expenses. Instead of burying it in a generic operating-cost field, the calculator now provides a dedicated input for mortgage payments, helping you separate fixed debt service from variable costs like utilities or restocking supplies. Seeing the mortgage itemized clarifies how debt influences break-even points and informs decisions about refinancing or paying down principal faster.
Seasonality and Dynamic Pricing
Short-term rentals often experience seasonal swings. Beach towns may boom in summer, while ski resorts peak in winter. Although the calculator uses a single occupancy rate for simplicity, you can run separate scenarios for high and low seasons, then average the results. Adjusting nightly rates to match demand—a practice known as dynamic pricing—also helps maximize revenue. Professional hosts monitor local events, school schedules, and competitor rates to tweak prices weekly or even daily.
Beyond the Basics
Consider regulatory compliance, insurance, and cleaning logistics as you fine-tune your model. Some cities cap the number of rental days or require permits and safety inspections. Insurance riders for short-term rentals protect against liability but add to recurring costs. Finally, efficient turnover scheduling can raise occupancy by reducing downtime between guests. By experimenting with the new fields for taxes, maintenance, and mortgage payments, you gain a fuller picture of hosting economics and can plan for both best and worst-case scenarios.
Limitations
Real-world results may vary with unexpected expenses, last-minute cancellations, or fluctuating demand. Use this tool as a starting point to gauge potential profitability and refine your strategy as you accumulate hosting experience. Always consult a tax professional for jurisdiction-specific rules and keep detailed records to substantiate deductions.