STR vs LTR Comparison

What actually drives STR profitability — and what eats it

The STR side of the model starts with Average Nightly Rate times days occupied (Expected Occupancy % times 30.4). From there it subtracts platform fees — Airbnb host fees run around 3% but other platforms charge 15-20% for full-service. It pulls out cleaning fees multiplied by average turnovers per month, then deducts STR management percentage and monthly extras like linens, supplies, and elevated utilities. What is left is the STR gross before shared costs.

The expense stack is where most STR operators get surprised. A property bringing in $4,800 gross at $200/night and 80% occupancy can easily land at $1,900 net after platform, cleaning (12 turnovers at $100), management (20%), and $300 in monthly extras. That is before mortgage, tax, insurance, and maintenance. Know your number before you list.

The long-term rental baseline most owners underestimate

LTR revenue is simpler: monthly rent times occupancy adjustment. If you charge $2,200 monthly and run a 5% vacancy rate, effective monthly revenue is $2,090. Subtract management percentage — typically 8–12% for a property manager, zero if self-managed — and you have your LTR gross. The calculator applies the LTR Management (%) you enter so you are comparing apples to apples: your personal time has value, and if you are not paying a manager, you are supplying that labor yourself.

Shared costs — mortgage P&I, property tax, insurance, and a maintenance reserve — sit below both strategies. They are entered once and subtracted from each result to produce the real monthly profit numbers. A lot of owners compare STR gross to LTR net and wonder why Airbnb looks so attractive. This model makes sure both numbers carry the same fixed cost burden.

Breakeven occupancy: the number every STR owner should know

The Breakeven Occupancy output answers: how many nights per month does the STR need to fill just to match what a long-term tenant would pay in profit? If LTR nets you $800/month and STR nets $0 at 40% occupancy and $1,200 at 80% occupancy, the breakeven is somewhere around 55–60%. Check your market's realistic occupancy data before committing to the STR path.

Urban markets in tourist-heavy cities can sustain 70–80% annualized occupancy. Secondary markets and off-season destinations may average 45–55%. If your breakeven sits above what your market realistically delivers, LTR is the lower-risk choice — not necessarily a worse investment, just a more predictable one.

Time and stress: the cost the calculator cannot capture

The model treats STR management percentage as the cost of managing the property, but if you self-manage, that 0% line item hides a real-time cost: guest communication, turnovers, key coordination, listing management, and maintenance response. A property requiring 12–15 hours a month of self-management at zero cost in the calculator is effectively paying you whatever hourly rate you are comfortable with — often less than operators expect.

Run the calculation with a realistic management percentage even if you plan to self-manage, then decide whether the profit difference justifies the time commitment. If STR wins by $500/month but costs you 15 hours, that is $33 per hour. If it wins by $200, that is $13 per hour. Know what you are signing up for.

Stress-testing the off-season before it stress-tests you

The Annual Projection tab shows 12-month income and profit at the occupancy rate you entered. If your market has a clear off-season — ski properties in summer, beach properties in winter — your effective annual occupancy is an average, and that average matters more than peak-season performance. A property doing 90% in summer and 30% in winter averages roughly 60%, and the annual projection will show you what that translates to over a full year for both strategies.

Use the occupancy slider to test the worst-case scenario before you commit to a STR strategy. Model 40% occupancy — what does the property cash flow? If it goes deeply negative, you need either a LTR backstop plan or enough reserves to cover four to six months of underperformance. Run your property's numbers before you list it anywhere — free, no card, and you'll know the breakeven occupancy before your first guest inquiry.

STR vs LTR Comparison vs. the alternatives

How to use it

1. Enter Average Nightly Rate and Expected Occupancy % for the STR scenario — use realistic market data, not peak-weekend rates.
2. Fill in Platform Fee %, Cleaning Fee Per Turnover, Avg Turnovers Per Month, STR Management %, and Monthly STR Extras.
3. Enter Monthly Rent, LTR Vacancy %, and LTR Management % for the long-term rental baseline.
4. Enter Shared Costs: Mortgage P&I, Property Tax, Insurance, and Maintenance reserve — these apply equally to both strategies.
5. Read STR Monthly Profit, LTR Monthly Profit, Winner, and Breakeven Occupancy in the results panel.

Who it's for

• Owner considering Airbnb on a paid-off condo — No mortgage changes the math significantly. A $1,800 LTR rent vs $220/night STR at 65% occupancy nets roughly $4,335 gross STR before fees. After platform, 8 turnovers at $90, and extras, STR still wins by about $1,200/month — but owner manages everything themselves.
• Investor with a financed property in a coastal market — A $2,400 mortgage property pulling $2,800 LTR rent versus $280 nightly STR at 55% occupancy. After full STR costs including 20% management, LTR wins by $220/month with zero management effort — and the STR breakeven occupancy comes out at 72%, which the market doesn't reliably deliver.
• House hacker evaluating one unit — Owner occupies the primary unit and considers STR versus LTR for a detached ADU. Low mortgage allocation and self-management tip STR into a clear win, but the model reveals that at 45% winter occupancy, LTR would generate an extra $180/month — prompting a hybrid strategy: STR in summer, LTR lease in winter.
• Out-of-state investor setting expectations — An investor buying remotely must use full property management for both strategies. Entering 25% STR management against 10% LTR management shows that the STR premium needs to exceed $800/month in gross to justify the added complexity — and in their market, the numbers are close enough to choose LTR for simplicity.

Key terms

STR (Short-Term Rental)

A rental listed for nightly or weekly stays on platforms like Airbnb or VRBO. Higher potential revenue than LTR but more active management and higher variable costs.

LTR (Long-Term Rental)

A property leased under a standard 6–12 month or longer agreement. Predictable monthly income with lower turnover costs and typically less management work.

Breakeven occupancy

The minimum occupancy percentage at which the STR strategy generates the same monthly profit as the LTR strategy. At any occupancy above this rate, STR wins; below it, LTR wins.

Platform fee

The percentage charged by the booking platform on each reservation. Airbnb's standard host fee is approximately 3%; other platforms or full-service management arrangements typically charge higher rates.

Maintenance reserve

A monthly amount set aside for repairs and capital replacements. A common rule of thumb is 1% of property value per year, allocated monthly. Both STR and LTR require this reserve; the STR version may run higher due to greater wear from frequent turnover.

Sources & further reading

• AirDNA — Short-Term Rental Research & Data
• Airbnb Newsroom — Economic Impact Reports
• VRMA — Vacation Rental Management Research
• Skift — Short-Term Rental Industry News
• Short Term Rentalz — Industry Reports