Annual net income from short-term rental at user-supplied nightly rate and occupancy

How Holiday Let Economics Work

Short-term rental income (Airbnb, VRBO, direct bookings) comes from nightly rates times booked nights. Gross income subtracts operating expenses (insurance, utilities, cleaning, platform fees, repairs, property management if used) to produce net income. The two biggest variables are nightly rate (set by location, property quality, marketing) and occupancy rate (what percentage of nights get booked across the year). Well-performing holiday lets achieve 60-75% occupancy at competitive rates; struggling properties see 30-40%.

Realistic Rate and Occupancy

Nightly rates: urban apartments 80-180, beach houses 150-400, luxury properties 300-1,000+. Occupancy: 50-60% typical for year-round, 70-80% for prime-location properties, 30-40% for remote or mid-quality offerings. Peak season rates 1.5-2x normal; shoulder season 0.8-0.9x. Annual expenses: property tax, insurance, utilities, internet, cleaning supplies, minor repairs typically 15-25% of gross rental income. Platform fees 3-15% depending on platform and setup.

Worked Example for Typical Property

Nightly rate 150. Occupancy 60%. Annual expenses 8,000. Cleaning per booking 50. Average stay 3 nights. Booked nights 219. Gross income 32,850. Bookings roughly 73. Cleaning costs 3,650. Net income 21,200 annually, 1,770 monthly. The property generates meaningful supplemental income but substantial work — managing bookings, cleaning between guests, handling issues. Property management companies charge 20-30% of gross, reducing net to around 15,000.

What the Calculator Does Not Model

Property mortgage or purchase cost — calculator shows income-side economics only. Property tax that varies by jurisdiction. Seasonal rate variation (peak/off-peak). Specific platform fees (Airbnb 3-15%, VRBO similar). Time cost of management if self-managed. Damage risk and insurance deductibles. Regulatory changes (many cities restricting short-term rentals). Specific tax treatment that varies by country. The calculator shows income potential; full investment analysis requires property purchase economics.

Common Holiday Let Mistakes

Overestimating occupancy based on peak-season booked weekends. Ignoring shoulder-season slower periods when estimating annual averages. Not accounting for platform fees in gross income. Underestimating cleaning and turnover costs at small properties with frequent guest changes. Ignoring time cost of self-management (often 10-20 hours monthly). Failing to account for regulatory risk as many jurisdictions tighten short-term rental rules. The calculator quantifies realistic income; execution and regulatory monitoring determine delivery.