Airbnb vs long-term rental: which earns more on the same property?

Short answer

Short-term rental wins when gross revenue exceeds roughly 1.9x the long-term rent, because cleaning, supplies, management and vacancy consume 35–45% of top line. Below that multiple a long-term tenant nets more with a fraction of the work and far less regulatory risk.

Option A

Short-term rental (Airbnb)

Nightly or weekly rental furnished and listed on Airbnb, Vrbo and direct booking channels.

Strengths

Gross revenue is typically 2–3x the same unit's long-term rent
Dynamic pricing captures events, holidays and peak season
You can use the property yourself on blocked dates
Damage is caught between stays instead of after 12 months

Trade-offs

Cleaning, supplies, utilities and platform fees run 35–45% of revenue
Local permit rules can change and delete the business model overnight
Furnishing a unit costs $15,000–$35,000 up front
Income is seasonal and occupancy is never guaranteed

Option B

Long-term rental

A 12-month lease to a single tenant, unfurnished, with the tenant covering most utilities.

Strengths

Operating expenses are typically 25–35% of rent, not 45%
One turnover a year instead of 60–120 guest turnovers
Conventional 30-year financing at better rates and easier underwriting
Almost no regulatory exposure compared with nightly rentals

Trade-offs

Rent is fixed for the lease term while your costs are not
A bad tenant or eviction can cost 3–6 months of income
No ability to use the property yourself
Upside is capped by the local rent comp, not by demand spikes

Head-to-head

Metric	Short-term rental (Airbnb)	Long-term rental
Gross annual revenueA	$52,000	$24,000
Operating expense ratioB	40%	30%
Net operating incomeA	$31,200	$16,800
Up-front furnishing costB	$15k–$35k	$0–$3k
Owner hours per monthB	8–20	1–2
Turnovers per yearB	60–120	0–1
Regulatory riskB	High and rising	Low
Revenue volatilityB	Seasonal, ±35%	Flat

Badge marks which option wins that row: A = Short-term rental (Airbnb), B = Long-term rental.

Short-term only wins above a 1.9x gross-rent multiple — and most non-tourist markets sit closer to 1.5x.

The rule is simple arithmetic. If short-term operating costs are 40% of revenue and long-term costs are 30% of rent, then STR net equals LTR net when 0.60 x STR revenue = 0.70 x LTR rent, which is an STR-to-LTR gross ratio of about 1.17. But that ignores your time, the furnishing capital and the vacancy risk. Charging real management at 20% and amortizing the furnishing, the practical breakeven moves to roughly 1.9x. Beach, ski and event markets clear it comfortably. A suburb with no visitor demand almost never does, no matter how good the listing photos are.

Worked example: Same 2-bed condo, $340,000 purchase, one full year

Long-term: $2,000/month x 12 = $24,000 gross
Long-term expenses (taxes, insurance, HOA, maintenance, 5% vacancy) at 30% = $7,200
Long-term NOI = $16,800
Short-term: 68% occupancy x 365 nights x $210 ADR = $52,100 gross
Cleaning at $95 x 145 stays = $13,775
Platform fees at 3% = $1,563
Utilities, internet, supplies, insurance uplift = $9,400
Furnishing $24,000 amortized over 5 years = $4,800
Short-term NOI before your labor = $22,562
Add 20% co-hosting if you outsource = −$10,420, leaving $12,142

Self-managed, the short-term rental nets about $5,800 more per year — real money, but earned across roughly 145 guest turnovers. Fully outsourced, the long-term lease actually nets more. The gross ratio here is 2.17x, which is why this property is a marginal, not obvious, STR.

The verdict

Choose Short-term rental (Airbnb)

Pick short-term if your market's STR gross is comfortably above 2x long-term rent, permits are stable, and you will self-manage or already have a cleaner you trust.

Choose Long-term rental

Pick long-term if the ratio is under 1.9x, the city is tightening rules, or you want the property to require close to zero attention.

Or run both

Mid-term furnished rentals of 30–90 days to travelling nurses and relocations often capture most of the premium with a fraction of the turnovers.

Frequently asked questions

How do I find the real STR revenue for my address?

Pull trailing-twelve-month revenue for 8–12 comparable listings within a mile with similar bed count, and use the median rather than the top performer. Underwrite at the 40th percentile, not the average.

Does short-term rental affect my mortgage?

It can. Some conventional loans and most HOA rules restrict rentals under 30 days. Financing a property as a second home while operating it nightly is a common and avoidable mistake.

What about the STR tax loophole?

If average guest stay is seven days or less and you materially participate, losses can offset active income for some filers. It is real but fact-specific, and it should never be the reason a marginal deal is bought. Confirm with a CPA.

How much does occupancy really swing?

Expect 35–45% in shoulder months against 85–95% in peak in most seasonal markets. Underwriting on annual average hides the fact that four months may cover most of the year's profit.

Methodology

Model uses 2026 US averages: STR operating cost of 35–45% of gross including cleaning, supplies, platform fees and utility uplift; LTR operating cost of 25–35% of gross including a 5% vacancy allowance. Furnishing amortized over five years. Mortgage payments are excluded from both sides so the operating comparison stays like-for-like.

Run your own numbers

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Last updated 2026-08-13. Machine-readable version: /api/public/comparisons.json. Free to cite with attribution to RevenueLab.