If you’re thinking of investing in vacation rentals but are not sure how much money they will make, then read on. For those who own second homes or want to supplement their income by renting out space at the property during part-time hours (or even just one day per week) on Airbnb or Vrbo, this calculator can be a helpful tool for estimating what you can expect to net based on your rental revenue and expenses.
If you’re thinking of investing in vacation rentals but are not sure how much money they will make, then read on. For those who own second homes or want to supplement their income by renting out space at the property during part-time hours (or even just one day per week) on Airbnb or Vrbo, this calculator can be a helpful tool for estimating what you can expect to net based on your rental revenue and expenses. That’s where our vacation rental income calculator comes in. Simply plug in your monthly revenue and expenses below, then watch our tool automatically churn out an annual income estimate — all factors considered.
The return from short term rental properties may be higher than long-term ones; however there is also an increased burden associated with managing these types of accommodations as well - especially since most guests require quick turnaround times if cancellations need made known with little to no lead time via text message before booking another. It's important to consider the main variables that play a role in determining your annual revenue and expenses.
The main two factors to consider when estimating your annual gross revenue are:
You can calculate these two metrics by looking at your rental property's performance. On the other hand, if it's a property you don't have a lot of your own historical data for, it’s important to understand the current market in your area to estimate average nightly rate and expected occupancy rate. There are a number of helpful tools out there such as AirDNA that can help you gauge how short-term rental in your market are currently performing.
The cost of operating a short-term rental is never easy to estimate, and it's made more difficult when you have a wide range of custom quotes and individual choices. From vacation rental taxes and insurance to cleaning and management fees, it’s important to factor a number of expenses into your income calculations to help paint an accurate picture of your home’s profit potential. This list is by no means exhaustive, but some of these key expense factors are:
If you're using third-party marketing websites, such as Airbnb or Vrbo, to market your short-term rental, you'll need to make sure you account for their marketing and host fees for owners when estimating how much you'll end up making.
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