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Short-Term vs Long-Term Rental Calculator

Should you Airbnb your property or sign a traditional lease? Compare annual income, expenses, and time investment to make a data-driven decision.

The Real Numbers: STR vs LTR Comparison

After analyzing 12 properties over 5 years, here's what I've learned about the short-term vs long-term rental debate.

Revenue Comparison

MetricShort-Term (Airbnb)Long-Term (Lease)
Gross Annual Revenue$42,000$28,800
Operating Expenses~34% of gross~19% of gross
Net Annual Income$27,600$23,400
Hours/Month Required15 hours2 hours
Effective Hourly Rate$153/hr$975/hr

Data from my 2-bedroom properties in a mid-tier tourist market.

Key Insight

Short-term rentals generate 46% more gross revenue but only 18% more net income after expenses. The real difference is time efficiency: LTR is 6x more profitable per hour worked.

When to Choose Short-Term Rental (Airbnb)

  • Tourist/vacation markets – Beach towns, ski resorts, national parks
  • Business travel hubs – Near airports, convention centers, corporate offices
  • Unique properties – Cabins, treehouses, lakefront homes that command premium rates
  • You have time to manage – 15+ hours/month for guest communication, cleaning coordination
  • You want maximum cash flow – And are comfortable with variable income

Optimize your STR income with dynamic pricing strategiesand tools like PriceLabs.

When to Choose Long-Term Rental (Lease)

  • Residential suburbs – Low tourism demand, family-oriented areas
  • Strict STR regulations – Cities like NYC, LA, San Francisco with permit requirements
  • You want passive income – Minimal time investment, predictable cash flow
  • You need financing – Some lenders prefer or require long-term leases
  • Exit strategy flexibility – Easier to sell with tenant in place

The Hybrid Strategy (Best of Both)

For many markets, the optimal approach combines both strategies:

  • University towns: Long-term lease during academic year, Airbnb during summer
  • Seasonal markets: STR during peak season, medium-term corporate rentals off-peak
  • Portfolio diversification: Some properties STR (high-demand markets), some LTR (stable residential)

Break-Even Occupancy Formula

Use this formula to determine if STR is worth it for your property:

Break-Even Occupancy = Long-Term Monthly Rent ÷ (STR Nightly Rate × 30)

Example: If LTR rent is $2,400/month and STR nightly rate is $150:
Break-even = $2,400 ÷ ($150 × 30) = 53% occupancy

If you can consistently achieve above this occupancy, STR will outperform. Below it, LTR wins.

Tax Implications

Both strategies have different tax treatments. Read our full Airbnb Host Tax Guide for details, but key differences:

  • STR: More deductions (cleaning, supplies, utilities), but income may be treated as business income
  • LTR: Fewer deductions, but rental income typically taxed at lower rates
  • Both: Eligible for depreciation, mortgage interest deductions

Maximize your deductions with our tax deduction guide.

Frequently Asked Questions

Is Airbnb more profitable than long-term renting?

In high-demand markets with 70%+ occupancy, yes—typically 15-25% more net income. In residential areas or low-tourism markets, long-term renting often wins. Use the calculator above with your specific numbers.

What if regulations change?

Always have a Plan B. Before buying any STR property, confirm it's viable as a long-term rental. Many cities (NYC, LA, Austin) have enacted strict STR regulations in recent years.

Can I convert from STR to LTR (or vice versa)?

Yes. Key considerations: furnishing (STR needs full furniture), insurance (different policies required), and local permits. Conversion typically takes 2-4 weeks.

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