A listing shows you a nightly price and a row of reviews. Before you buy, you need a different number: how much of a year’s bookings is still yours once Airbnb, the cleaners, the co-host and the lender have been paid. The steps below work that out for one furnished three-bedroom house at $400,000.
What should you check before you run the numbers?
Some Airbnbs fail before any arithmetic, so start with the rules for this address. Airbnb’s own guide for US hosts says to:
- look up the permit, zoning, safety and health rules that apply
- check homeowners association or co-op rules for anything that bans or limits hosting
- find out which local taxes apply, such as a hotel or occupancy tax
- work with an insurance agent on the coverage and limits you need
Don’t skip the insurance step. The National Association of Insurance Commissioners says most homeowners and dwelling policies aren’t designed to cover accidents from short-term rentals. Get a quote for a policy that covers paying guests at this address, and use that figure in the numbers below.
How much does an Airbnb make a year?
Booking income is two numbers multiplied together: the average nightly rate and the share of nights that get booked, which hosts call occupancy. The nightly rate here means what guests actually paid per booked night across the whole year, cleaning fee included, not the asking price on a July weekend.
This example assumes $475 a night and 60% of nights booked, which is 219 nights. That’s $104,025 a year, or $8,669 a month.
Multiply the two inputs and you get revenue per available night, $285 here, which the calculator shows. It lets you compare listings at different prices: a $300 place booked 95% of the time earns the same $285 per available night.
Take both inputs from similar listings near this house, over a full year. A summer of full weekends and a quiet February average out to one number, and the mortgage is due in both. Be wary of any estimate built from asking prices rather than nights guests actually paid for.
What comes out of the booking income?
Most of an Airbnb’s running costs rise and fall with its bookings, and together they take more than half of what guests pay.
- Airbnb’s fee. As of September 2026, Airbnb’s help center says most hosts on its single fee pay 15.5%, taken out of the payout, and that it’s moving all home hosts to that fee. Its service fees are a percentage of the nightly price plus any fees you charge, such as a cleaning fee.
- A co-host to answer guests and handle check-ins, paid 20% of bookings in this example.
- Cleaning and restocking: $160 a stay, with stays averaging three and a half nights, about 63 stays a year, plus $150 a month of supplies.
- Utilities and internet: $425 a month, bills a long-term tenant would often pay.
- Repairs and big repairs: 10% of bookings set aside, since a new guest arrives every few nights.
- Property taxes and insurance: $4,400 and $3,000 a year.
The loan is 20% down on a 30-year mortgage at 7%.
| 60% booked | |
|---|---|
| Booking income ($475 a night, 219 nights a year) | $8,669 |
| Airbnb’s fee (15.5%) | −$1,343 |
| Co-host (20%) | −$1,734 |
| Cleaning and restocking | −$984 |
| Utilities and internet | −$425 |
| Repairs and big repairs (10%) | −$867 |
| Property taxes and insurance | −$617 |
| Mortgage | −$2,129 |
| Cash flow each month | +$570 |
These are example figures, not a forecast for any market.
Airbnb’s fee, the co-host, and cleaning and restocking take $4,061 a month between them, 47 cents of every booking dollar, before anything goes to the mortgage. Add the other running costs and 69% of the income is gone. The mortgage takes most of the rest, which leaves the $570 the house pays you.
How much cash does it take to start?
An Airbnb needs its furniture before its first guest, so the cash to start is well above the down payment.
| Cash | |
|---|---|
| Down payment (20%) | $80,000 |
| Closing costs (3% of the price) | $12,000 |
| Furniture, linens and a full kitchen | $30,000 |
| Cash to start | $122,000 |
At $570 a month, the house returns 5.6% a year on that $122,000. That’s its cash-on-cash return: a year of cash flow divided by the cash you put in.
The short-term rental calculator wants 8% before it calls a deal one that works, since running an Airbnb is closer to running a small hotel than to collecting rent. This house would need about 64% of nights booked to get there.
Which number could break this Airbnb?
Most inputs above are estimates until the house has a year of its own bookings. So change them one at a time and watch the bottom line.
| Cash flow each month | |
|---|---|
| The example: $475 a night, 60% booked | +$570 |
| Booked 55% of nights instead | +$245 |
| Booked 50% of nights instead | −$79 |
| Nightly rate 10% lower, about $428 | +$97 |
| Booked 55% at about $428 a night | −$188 |
| Stays average 2.5 nights, so more cleanings | +$236 |
| Mortgage rate of 8% instead of 7% | +$350 |
Two inputs move the result most. The first is the booking rate. Each five points of occupancy is worth about $325 a month on this house, and it stops covering its costs at about 51% booked, some 187 nights a year. The post on break-even occupancy shows how to find that line for any listing.
The second is the nightly rate, and it has even less room. The house breaks even at about $418 a night, only 12% under the example’s $475. Two small misses together, 55% booked at $428, and it costs you $188 a month.
When you test a lower booking rate in the calculator, lower the cleaning line with it: fewer stays mean fewer cleanings. The figures above do that.
Is the Airbnb worth the work?
The co-host line is the price of the work, $1,734 a month here. Do it yourself and the house would clear $2,303 a month, but that means answering guests at all hours and running every turnover yourself, which adds up to a part-time job.
If the house could also go to a long-term tenant, run it that way too. The Airbnb has to beat the lease by enough to pay back the furniture and the extra work, and this comparison of one house leased and on Airbnb shows how many booked nights that takes.
To run your own, fill in the short-term rental calculator from a full year of bookings at similar listings, a real insurance quote and your own cleaning cost per stay. Then lower the booking rate until the cash flow reaches zero. The gap between that rate and your estimate is your margin for error, and it’s the number to be sure of before you make an offer.