How to Price an Airbnb (and Know If It's Worth It)
Your Airbnb income isn't the nightly rate — it's the rate multiplied by how full you stay, minus cleaning, platform fees, furnishing, utilities, and lodging taxes. The numbers that matter are RevPAR (revenue per available night) and your break-even occupancy: the share of nights you must book just to cover costs. Run those, then compare it honestly to a plain long-term lease.
Revenue = nightly rate × occupancy
A $200/night listing that's booked half the month earns far less than its headline rate. The metric that captures this is RevPAR — revenue per available night — which is your average daily rate multiplied by your occupancy. Price and occupancy trade off against each other: a higher rate usually means fewer bookings, a lower rate more. Your job is to find the combination that maximizes RevPAR, not the highest possible nightly price.
Count the costs short-term rentals actually carry
STRs have costs a long-term rental doesn't:
- Cleaning between every stay (whether you charge a fee or absorb it).
- Platform fees — the host service fee plus payment processing.
- Furnishing and a capex reserve — you furnished it, and guests wear it out; set aside for replacements.
- Utilities, wifi, and supplies — you pay these, not the guest.
- Lodging / occupancy taxes and any permit or license fees your city requires.
Your break-even occupancy is the number to watch
Break-even occupancy is the percentage of nights you must book to cover all your costs. Below it you lose money; above it you profit. If your costs are high relative to your nightly rate, you may need to stay 60–70%+ full just to break even — which is a very different business than a lease that pays every month regardless.
Airbnb / Short-Term Rental Analyzer
Enter your nightly rate, occupancy, and costs — see monthly profit, RevPAR, break-even occupancy, and whether short-term beats a long-term lease.
Open the free calculator →Does it actually beat a long-term rental?
Short-term can earn more per night, but after cleaning, fees, furnishing, vacancy, and your time managing it, the advantage often shrinks — and sometimes disappears. Always run the STR numbers side by side with what the same property would earn on a normal 12-month lease before you commit to the extra work and cost.
Common mistakes
- Assuming you'll book near 100% — model realistic, seasonal occupancy.
- Forgetting furnishing/capex reserves and lodging taxes.
- Ignoring your own time; managing an STR is a part-time job.
Want to track a whole year of bookings? The Airbnb Toolkit (Excel + Google Sheets, $27) adds booking and expense logs with an occupancy / ADR / RevPAR dashboard on top of the free analyzer. Get the toolkit →
Frequently asked questions
How do I price my Airbnb?
Start from RevPAR — your nightly rate times realistic occupancy — then subtract cleaning, platform fees, furnishing/capex, utilities, and lodging taxes. Adjust your rate to maximize revenue per available night, not just the headline price, and check the occupancy you need to break even.
What is a good occupancy rate for an Airbnb?
It varies widely by market and season, but the number that matters most is your own break-even occupancy — the share of nights you must book to cover costs. A listing is healthy when realistic occupancy comfortably clears break-even with profit to spare.
Is an Airbnb more profitable than a long-term rental?
Sometimes, but not always. Short-term rents more per night yet carries cleaning, platform fees, furnishing, higher vacancy, and far more of your time. Always compare the STR's net profit against a 12-month lease on the same property before deciding.
This guide is general information to help you plan — not investment, tax, or legal advice. Short-term-rental rules, taxes, and permits vary by city; check your local regulations.