Short-Term Rental Revenue Calculator Formula

Understand the math behind the short-term rental revenue calculator. Each variable explained with a worked example.

Use the Short-Term Rental Revenue Calculator

Formulas Used

Annual Net Revenue

annual_net = net_revenue

Average Monthly Revenue

monthly_avg = net_revenue / 12

Annual Gross Revenue

annual_gross = gross_revenue

Annual Platform Fees

platform_cost = platform_fees

Total Booked Nights

total_booked_nights = total_nights

Effective Nightly Rate

effective_nightly = total_nights > 0 ? net_revenue / total_nights : 0

Variables

VariableDescriptionDefault
avg_nightly_rateAverage Nightly Rate(USD)175
peak_nightly_ratePeak Season Nightly Rate(USD)225
peak_monthsPeak Season Months4
avg_occupancy_pctAverage Occupancy Rate(%)65
peak_occupancy_pctPeak Season Occupancy Rate(%)85
cleaning_feeCleaning Fee Per Stay(USD)125
avg_stay_nightsAverage Stay Length (nights)3
platform_fee_pctPlatform Host Fee(%)3
off_peak_monthsDerived value= 12 - peak_monthscalculated
peak_nights_bookedDerived value= peak_months * 30 * peak_occupancy_pct / 100calculated
offpeak_nights_bookedDerived value= off_peak_months * 30 * avg_occupancy_pct / 100calculated
peak_revenueDerived value= peak_nights_booked * peak_nightly_ratecalculated
offpeak_revenueDerived value= offpeak_nights_booked * avg_nightly_ratecalculated
total_nightsDerived value= peak_nights_booked + offpeak_nights_bookedcalculated
num_staysDerived value= avg_stay_nights > 0 ? total_nights / avg_stay_nights : 0calculated
total_cleaningDerived value= num_stays * cleaning_feecalculated
gross_revenueDerived value= peak_revenue + offpeak_revenue + total_cleaningcalculated
platform_feesDerived value= gross_revenue * platform_fee_pct / 100calculated
net_revenueDerived value= gross_revenue - platform_feescalculated

How It Works

Short-Term Rental Revenue Forecasting

Short-term rentals can generate significantly higher gross revenue than traditional leases, but they also have higher operating costs and variable income.

Revenue Drivers

  • Nightly rate: Set based on comparable listings, location, amenities, and seasonality
  • Occupancy rate: The percentage of available nights that are booked
  • Cleaning fees: Often charged per stay and can cover cleaning costs
  • Average stay length: Longer stays mean fewer turnovers but sometimes lower nightly rates

    • Seasonal Considerations

  • Peak season rates can be 20-50% higher than off-peak
  • Occupancy rates vary significantly between peak and off-peak periods
  • Minimum stay requirements can affect occupancy

    • Revenue vs. Long-Term Rental

  • STR gross revenue is often 1.5-3x a traditional lease
  • But operating expenses are higher: cleaning, supplies, utilities, higher insurance, platform fees
  • Net income advantage is typically 20-50% above a long-term lease in favorable markets

    • Worked Example

    $175 average nightly rate, $225 peak rate for 4 months, 65% average occupancy, 85% peak occupancy, $125 cleaning fee, 3-night average stay, 3% platform fee.

    avg_nightly_rate = 175peak_nightly_rate = 225peak_months = 4avg_occupancy_pct = 65peak_occupancy_pct = 85cleaning_fee = 125avg_stay_nights = 3platform_fee_pct = 3
    1. 01Peak nights booked: 4 x 30 x 85% = 102 nights
    2. 02Off-peak nights booked: 8 x 30 x 65% = 156 nights
    3. 03Peak revenue: 102 x $225 = $22,950
    4. 04Off-peak revenue: 156 x $175 = $27,300
    5. 05Total stays: 258 / 3 = 86 stays
    6. 06Cleaning revenue: 86 x $125 = $10,750
    7. 07Gross revenue: $22,950 + $27,300 + $10,750 = $61,000
    8. 08Platform fees: $61,000 x 3% = $1,830
    9. 09Net revenue: $61,000 - $1,830 = $59,170

    Frequently Asked Questions

    What occupancy rate should I expect?

    In popular vacation markets, experienced hosts achieve 60-80% annual occupancy. Urban locations may see 70-85%. New listings typically start lower (40-50%) and build up over 3-6 months as reviews accumulate. Markets with strong seasonality may average 50-65% annually.

    How do I set the right nightly rate?

    Research comparable listings in your area on Airbnb and VRBO. Match properties with similar bedrooms, amenities, and location quality. Consider using dynamic pricing tools that adjust rates based on demand, season, day of week, and local events.

    What expenses reduce my net revenue further?

    Beyond platform fees, budget for cleaning costs, supplies and consumables, utilities, higher insurance premiums, furnishing and replacement, WiFi and streaming services, professional photography, and potentially property management (20-40% for STR managers).

    Ready to run the numbers?

    Open Short-Term Rental Revenue Calculator