How to Calculate Airbnb Profit (With a Worked Example)
Your Airbnb payout is not your profit. Between platform fees, cleaning, utilities, supplies and the mortgage or rent, many hosts are surprised by how much (or how little) they actually keep. Here is a simple way to calculate your real short-term rental profit, with a worked example you can copy.
The Airbnb profit formula
Every short-term rental, whether it is listed on Airbnb, Vrbo, Booking.com or booked directly, comes down to one line:
Profit = Gross revenue − Platform fees − Operating expenses
- Gross revenue is everything guests pay you for the stay: nightly rate × nights booked, plus any cleaning fees you charge.
- Platform fees are what Airbnb or another platform keeps. Depending on your fee setting this may be a small host service fee or a larger host-only fee, so check the fee shown on your own payouts.
- Operating expenses are everything it costs to run the property: cleaning, laundry, utilities, internet, supplies, repairs, insurance, software, and your rent or mortgage if the property exists only for guests.
A worked example
Let's take one apartment for one 30-day month.
| Item | Amount |
|---|---|
| Nights booked (out of 30) | 20 |
| Average nightly rate | $95 |
| Nightly revenue (20 × $95) | $1,900 |
| Cleaning fees collected (6 stays × $50) | $300 |
| Gross revenue | $2,200 |
| Platform fee (3% in this example) | −$66 |
| Payout | $2,134 |
Now the costs for the same month:
| Expense | Amount |
|---|---|
| Rent or mortgage | $900 |
| Cleaning (6 turnovers × $45) | $270 |
| Utilities | $140 |
| Maintenance and repairs | $80 |
| Supplies (toiletries, coffee, linen replacement) | $60 |
| Insurance | $50 |
| Internet | $40 |
| Total expenses | $1,540 |
Profit = $2,134 − $1,540 = $594 for the month. That is a profit margin of about 27% of gross revenue. The payout of $2,134 looked healthy, but less than a third of it is real profit.
Occupancy and ADR: the two numbers that drive everything
Occupancy rate = nights booked ÷ nights available. In the example, 20 ÷ 30 = 66.7%.
ADR (average daily rate) = nightly revenue ÷ nights booked. Here, $1,900 ÷ 20 = $95.
Track both every month. If profit drops, these two numbers usually tell you why: fewer bookings (occupancy) or cheaper bookings (ADR). Raising your rate by $10 at the same occupancy would add $200 of revenue to this month without adding a single extra cleaning.
Find your break-even nightly rate
Your break-even rate is the lowest nightly price at which the month still covers its costs. A simple version:
- Take total expenses: $1,540.
- Subtract cleaning-fee income, because guests already pay for that: $1,540 − $300 = $1,240.
- Divide by the nights you expect to book: $1,240 ÷ 20 = $62.
- Adjust for the platform fee: $62 ÷ (1 − 0.03) ≈ $64 a night.
Below about $64 a night at 20 booked nights, this host loses money. Anything above it is profit. You can run the same sum with a profit goal added to the expenses to find your target rate. Try our free rental profit calculator to test different rates and occupancy in seconds.
Common mistakes hosts make
- Counting payouts as profit. The payout is before every cost except the platform fee.
- Forgetting irregular costs. A new mattress, a broken washing machine or a yearly licence fee can wipe out a month. Spread big costs across the year when you review profit.
- Mixing properties together. With two or more listings, a strong unit can hide a weak one. Track each property separately.
- Not keeping categories for tax time. Logging expenses by category during the year saves hours later. Ask a local accountant which categories matter where you live.
Track it every month with a spreadsheet
You can do all of this by hand, but a spreadsheet that does the maths for you is quicker and harder to get wrong. Our Rental Host Profit Dashboard is an Airbnb profit calculator spreadsheet for Excel and Google Sheets. You log each stay and expense, and it works out monthly revenue, platform fees, expenses, occupancy, ADR and net profit. It also includes a pricing calculator for break-even and target nightly rates, and a tax-time summary by expense category. It handles 1 to 10 properties in any currency.
This article is general information, not tax or financial advice.
