Vacation Rental ROI Calculator
Calculate Airbnb/VRBO profitability with nightly rate, occupancy, and all expenses.
By Konstantin Iakovlev · Updated April 2026 · Source: CFPB — Owning a Home
Annual Cash Flow
-$6,657.40
Cap Rate
4.7%
Cash-on-Cash
-7.2%
Gross Revenue
$47.5K
NOI
$18,890.22
Occupancy Break-Even
73%
268 nights/year
Revenue & Expenses (Annual)
| Gross Revenue (237 nights) | $47,450.00 |
| Platform Fees | - $1,690.41 |
| Management Fees | - $11,269.38 |
| Net Revenue | $34,490.22 |
| Insurance | - $3,000.00 |
| Property Tax | - $5,000.00 |
| Maintenance | - $4,000.00 |
| Utilities | - $3,600.00 |
| NOI | $18,890.22 |
| Mortgage | - $25,547.62 |
| Annual Cash Flow | -$6,657.40 |
| Monthly Cash Flow | -$554.78 |
Vacation Rental vs Long-Term Rental
| Vacation Rental Cash Flow | -$6,657.40 |
| Long-Term Rental Cash Flow | -$17,387.62 |
| Difference | $10,730.22 |
| Better Option | Vacation Rental |
Use the Vacation Rental ROI Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Return on investment is the number that tells you whether a short-term rental is actually worth owning. It frames the property as a financial asset, showing whether the income it throws off justifies the cash you put in and the costs of keeping it running, rather than leaving you to guess.
The ROI figure comes from dividing annual net rental income, gross rental income minus every operating expense including mortgage payments, by your total initial investment, which bundles the purchase price with closing costs and any upfront renovations. The result is a percentage that represents your annual return on the money committed.
The accuracy of that percentage depends entirely on honest expense estimates. Build in unexpected repairs and stretches of vacancy, since leaving them out inflates the return into something the property can't deliver. If you intend to hand the day-to-day work to a management service, fold those fees in as well, because they take a real bite out of profitability.
Example: Beachfront Condo Investment
- 1 You're considering a beachfront condo for $500,000. Closing costs are $15,000, and initial renovations cost $20,000. Your estimated annual rental income is $60,000, and annual operating expenses (including mortgage, taxes, insurance, and utilities) are $35,000.
- 2 Initial Investment = $500,000 (purchase) + $15,000 (closing) + $20,000 (renovations) = $535,000. Annual Net Income = $60,000 (rental income) - $35,000 (expenses) = $25,000. ROI = ($25,000 / $535,000) * 100.
- 3 The calculated ROI for your beachfront condo is approximately 4.67%.
- 4 A 4.67% ROI indicates the property generates nearly 5% of your initial investment back annually. Compare this to other investment opportunities and market averages to determine if it meets your financial goals and risk tolerance.
Source: CFPB — Owning a Home · Last updated: April 2026
Frequently Asked Questions
What is a good occupancy rate for a vacation rental?
How much does a vacation rental make per year?
What expenses should I include in vacation rental ROI?
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