How much Money Can You Really Make with a Short-Term Rental?

Air bungalow
Aug 28
2 min read

Short-term rentals (STRs), like those listed on Airbnb and Vrbo, have become a popular way to generate passive income. But one of the most common questions for new or aspiring hosts is: how much money can you really make?

The answer depends on several variables — but with the right strategy, location, and setup, short-term rentals can far outperform traditional long-term leases. Here's what you need to know.

Understanding the Earning Potential

🔹 Location is Everything

Your property's geographic location is the single most important factor influencing your earning potential.

High-tourism areas (e.g. Scottsdale, Nashville, Orlando): Often yield high nightly rates and high occupancy.
Suburban homes near hospitals or universities: Can do well with mid-term stays (30+ days), especially if furnished.
Urban apartments: May face heavy regulation but can thrive with business travelers or events.

Example:A 2-bedroom condo in Scottsdale, AZ might rent long-term for $2,200/month. But on Airbnb at $180/night with 70% occupancy, it could generate over $3,700/month gross.

Key Factors That Impact STR Revenue

1. Occupancy Rate

Good STRs typically book 60–80% of the month.
Seasonality affects demand — e.g., summer in Phoenix may dip, while winter surges.

2. Nightly Rate

Influenced by local competition, amenities, event calendars, and your reviews.
Tools like PriceLabs, Beyond Pricing, or AirDNA can help dynamically optimize rates.

3. Fees and Expenses

Don't forget to account for:

Platform fees (Airbnb/Vrbo take ~3–15%)
Cleaning fees and turnovers
Property management (10–25% if outsourced)
Utilities, furnishings, insurance
Maintenance and supplies

STR Income vs Long-Term Rental Income

Revenue Source	Long-Term Rental	Short-Term Rental
Rent (Monthly)	~$2,000	~$3,500–$5,000 (gross)
Flexibility	Low (12+ mo leases)	High (daily pricing)
Turnover	Low	High
Management Effort	Low	High (unless automated)
Profit Margin	~60–70%	~30–50%

STRs generally earn 1.5x to 3x more than traditional rentals in strong markets, but they also come with more hands-on work and upfront investment.

Break-Even & ROI Calculations

Before jumping in, ask:

What’s the minimum nightly rate to cover your mortgage + expenses?
How many nights per month do you need to be booked to break even?
How long until you recoup your setup costs (furnishings, photos, supplies)?

Pro Tip:A well-set-up STR should aim to break even at 35–50% occupancy. Anything above that is profit.

Real-World STR Income Examples

Downtown Austin Studio: $150/night × 20 nights = $3,000/month
3-Bedroom Phoenix Home: $225/night × 18 nights = $4,050/month
Small ADU in Oregon: $110/night × 15 nights = $1,650/month

Note: Always calculate your net income after expenses. A $4,000 gross income may become $2,400 net after all costs.

Final Thoughts

Yes — short-term rentals can be highly profitable, but success depends on location, setup, pricing strategy, and management. If you’re willing to treat it like a business (or hire someone who will), your STR can deliver solid monthly cash flow and long-term property appreciation.

✏️ Want Help Starting Yours?

If you’re new to the STR world and want help with setup, pricing, or property management, let’s chat. Whether you’re turning a guest house into a rental or considering investing in a new property, we can help you build a strategy that works.