The direct answer
Compare short-term, midterm and long-term rentals using a common annual income and cost framework, while preserving the distinct availability, turnover and service assumptions. Gross quoted nightly and monthly rates cannot be ranked directly as investment returns.
Translate each format into collected annual income
For a nightly scenario, multiply ADR by available nights and occupancy. For a monthly scenario, annualize the monthly rate and apply the corresponding income-loss allowance. Owner-use periods and blocked capacity need consistent treatment. A higher advertised rate can coexist with lower annual income if availability or bookings are limited. Keep ancillary collections separate from room or rent revenue.
To apply the approach to an editable scenario, use the Airbnb / Short-Term Rental Calculator. For the neighboring question, explore Midterm Rental Calculator.
Use format-specific cost assumptions
Short stays can create per-stay cleaning and supplies costs; furnished monthly rentals may include utilities and an annualized furniture burden; long-term leases can allocate costs differently to tenants. None of those treatments should be assumed from the label alone. Review the lease or operating arrangement and identify who pays each cost, along with the percentage fee basis if a manager or platform is involved.
Compare net annual outcomes and practical constraints
After operating costs and debt service, compare cash flow and the equity cash basis on the same definitions. Review time commitments, availability and permissions independently of the financial calculation. The tools do not assess the legality of a rental format or estimate the likelihood of bookings. A full comparison also needs capital spending and a sensitivity range, not only one favorable annual assumption.
Worked example
A hypothetical nightly case of $180 ADR, 365 available nights and 65% occupancy produces $42,705 room revenue. A $3,800 monthly case at 90% occupancy produces $41,040 rent. A $3,200 monthly long-term case at 95% retained rent produces $36,480. These are gross income scenarios before format-specific costs, not a ranking of profits.
Open Airbnb / Short-Term Rental Calculator and test your assumptions →
Common mistakes and limitations
Do not select a format solely because its gross rate is largest. Align owner use, included services, capital contributions and cost timing before comparing returns.
Uses user-entered assumptions and does not access Airbnb/AirDNA or guarantee local STR legality, demand or pricing.
Frequently asked questions
Can I reuse one expense ratio for all formats?
Only if the underlying cost and responsibility assumptions genuinely match. Otherwise use separate operating budgets.
Do these models establish rental permission?
No. They are financial scenarios; permissions, agreements and applicable requirements need separate review.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- Fannie Mae — Selling Guide B3-3.8-03, Short-Term Rental (09/02/2026)Current short-term-rental income context and vacancy/maintenance treatment.
Read our editorial policy for the scope of these educational methods.