Compare short-term vs long-term rental income and find breakeven occupancy
Short-term rentals often gross 2–3x more than long-term rentals, but expenses are also 2–3x higher. Management (20–25% for a property manager, or significant time if self-managed), cleaning, furnishing, supplies, and higher utilities eat into the premium quickly.
Occupancy rate is the make-or-break variable. In top tourist markets, 70–80% is achievable. In secondary markets, 50–60% is more realistic. Seasonality can mean 90% in summer and 30% in winter.
Don't forget regulatory risk. Cities are increasingly restricting short-term rentals with permits, caps, and outright bans. A property that's great for Airbnb today could be long-term-only next year if regulations change.
Long-term rentals offer stability and predictability: consistent monthly income, lower management burden, and fewer things that can go wrong. Many investors prefer the lower returns for the lower headaches.