Airbnb arbitrage calculator: a worked example with every cost

You found a one bedroom, the landlord might say yes to subletting, and a free calculator says it will make $900 a month. Before you sign a 12 month lease on that number, run it yourself.

Every free Airbnb arbitrage calculator does the same thing: it multiplies a rate by an occupancy you supply and subtracts the costs it remembers to ask about. The problem is what it forgets. Several popular ones skip insurance, the repairs reserve, or the fact that Airbnb takes its cut on your cleaning fee too. One r/AMA poster who lost roughly $500 a month for a year on arbitrage got the same first question from almost every commenter: did you actually do the math?

This page is that math, done once in full on an example unit, so you can swap in your own numbers line by line.

What do you put into an Airbnb arbitrage calculator?

You need nine inputs: rent, nightly rate, occupancy, average stay length, the cleaning fee you charge, what you pay the cleaner, the platform fee, your other fixed monthly costs, and your startup cash. Everything else is arithmetic.

Rental arbitrage means leasing a home long term and renting it out short term with the landlord's written permission, keeping the spread. Occupancy is booked nights divided by nights available. Break-even occupancy is the occupancy where you make exactly zero.

Here are the inputs for the worked example, a one bedroom in a mid-size US city. These are illustrative numbers chosen to look like a typical deal, not market data. Replace every one with your own quotes.

The $500 of other fixed costs breaks down as $200 utilities and internet, $125 short term rental insurance, $40 software (pricing tool and messaging), $60 consumables, and a $75 repairs and replacement reserve.

Watch out: Airbnb's help center says most hosts on the single fee structure pay 15.5%, with others typically between 14% and 16%, and that the older 3% split fee is being phased out. Model 15.5% unless your earnings page says otherwise.

Worked example: does the $1,800 one bedroom make money?

No. At $140 a night and 60% occupancy, the example unit loses about $183 a month. Here is every line.

1. Nightly revenue: 18 nights x $140 = $2,520
2. Cleaning fees collected: 6 turnovers x $110 = $660
3. Booking subtotal: $2,520 + $660 = $3,180
4. Airbnb host fee: $3,180 x 15.5% = $492.90
5. Payout: $3,180 minus $492.90 = $2,687.10
6. Cleaner: 6 x $95 = $570, leaving $2,117.10
7. Rent plus other fixed costs: $1,800 + $500 = $2,300
8. Monthly profit: $2,117.10 minus $2,300 = minus $182.90

Notice step 3. This unit grosses $3,180 on $1,800 rent, which is 1.77 times the rent. Plenty of courses say a deal works if revenue is close to double the rent. This one is close and still loses money every month. The 2x rule is a screening shortcut, not a calculator.

The cleaning line is the quiet leak. You charge $110 and pay $95, which looks like $15 of margin per turn. But Airbnb takes 15.5% of the $110, or $17.05, so you are actually down about $2 on every cleaning. A host in r/ShortTermRentals put the fix plainly: if your cleaner charges $100, you have to charge the guest at least $118 just to break even after Airbnb's cut. For more on setting that number, see how much to charge for an Airbnb cleaning fee.

How do you calculate break-even occupancy?

Work out what one booked night really leaves you, then divide your fixed costs by it. In the example, each booked night is worth about $117.62, so you need 19.6 nights, or 65% occupancy, to break even.

The per-night contribution is the shortcut most calculators hide:

Cleaning per night   = cleaning fee / avg stay          = 110 / 3  = 36.67
Cleaner per night    = cleaner cost / avg stay          = 95 / 3   = 31.67
Contribution / night = (rate + cleaning per night) x (1 - fee) - cleaner per night
                     = (140 + 36.67) x 0.845 - 31.67    = 117.62

Fixed costs          = rent + other fixed               = 1,800 + 500 = 2,300
Break-even nights    = 2,300 / 117.62                    = 19.6
Break-even occupancy = 19.6 / 30                         = 65%
Monthly profit       = booked nights x 117.62 - 2,300

Once you have the contribution per night, every scenario is one multiplication. That is how you stress test a deal in under a minute instead of retyping a web form.

Hostaway's calculator notes make the same point: if realistic market occupancy is 60% to 70% and your break-even is 48%, you have a cushion; if break-even is near 75%, one slow season puts you underwater. Our example sits at 65%, which is no cushion at all for a new listing with zero reviews.

How do rent and occupancy change the result?

Rent and occupancy decide almost everything. Cutting rent by $300 moves the same unit from a loss to a modest profit at the same occupancy, while a 10 point occupancy drop wipes out a year of margin. Here is the example at two rents.

Two things stand out. First, every 10 points of occupancy is worth about $350 a month on this unit, so the occupancy guess matters more than your decor. Second, a lower rent shifts every row by the same $300, and rent is the only input you control before you sign. Raising the rate helps too: at $160 a night and 60% occupancy, the $1,800 unit makes about $121 a month instead of losing $183. But new listings usually have to price below established ones until reviews come in, so do not count on the higher rate in your first months.

A host in r/airbnb_hosts described where the plan usually breaks: units booked on weekends and empty during the week. That host furnished their own last two Airbnbs from arbitrage operators selling everything cheap on Facebook Marketplace after giving up. Weekend-only demand is roughly 8 to 9 nights a month, under 30% occupancy, which no row above survives.

What is the highest rent you can sign?

Work the formula backwards: take the contribution at a conservative occupancy, subtract your other fixed costs and the profit you need, and what is left is your maximum rent. For the example at 55% occupancy and a $300 monthly profit target, that is about $1,140.

1. Conservative booked nights: 30 x 55% = 16.5
2. Contribution: 16.5 x $117.62 = $1,940.70
3. Minus other fixed costs: $1,940.70 minus $500 = $1,440.70
4. Minus your profit target: $1,440.70 minus $300 = $1,140.70 maximum rent

That number is the most useful thing a calculator can give you, because it turns into a negotiation. If the landlord wants $1,800 and your ceiling is about $1,140, you either find a cheaper unit, ask for a lower rent in exchange for a longer lease, or walk. The Airbnb Arbitrage pack has the landlord pitch and the written permission checklist for exactly that conversation.

How long until the furnishing pays back?

Divide your startup cash by your conservative monthly profit. In the example, $8,000 to launch pays back in about 12 months at $1,500 rent and 75% occupancy, and about 23 months at $1,800 rent. At 60% occupancy on $1,800 rent it never pays back.

The $8,000 is $1,800 deposit, $1,800 first month, $3,500 furniture and mattresses, $500 linens and kitchen, and $400 for photos, a smart lock and setup. Our Airbnb arbitrage startup cost guide itemizes each line and the cash reserve you need on top.

Remember that a 12 month lease with a 23 month payback means you could hand back the keys before you get your money out.

Build the calculator in a spreadsheet

You can rebuild this in Google Sheets in ten minutes. Put inputs in column B and the formulas below in the next rows.

B1 Rent            1800
B2 Nightly rate    140
B3 Occupancy       0.60
B4 Avg stay        3
B5 Cleaning fee    110
B6 Cleaner cost    95
B7 Airbnb fee      0.155
B8 Other fixed     500
B9 Startup cash    8000

B11 Booked nights        =30*B3
B12 Contribution/night   =(B2+B5/B4)*(1-B7)-B6/B4
B13 Monthly profit       =B11*B12-(B1+B8)
B14 Break-even occupancy =(B1+B8)/B12/30
B15 Payback months       =IF(B13>0,B9/B13,"never")
B16 Max rent at 55%, $300 target =30*0.55*B12-B8-300

Tip: Copy column B into C and D and set occupancy to your estimate, minus 10 points and minus 15 points. Decide on the worst column, not the best.

If you would rather use a free tool for the revenue estimate, data sites help with the occupancy guess. We tested whether paying for one is worth it in is AirDNA worth it for arbitrage.

Mistakes that make calculators lie

Most bad arbitrage deals are not bad hosting; they are a lease signed on flattering inputs. These come up again and again in r/airbnb_hosts and r/ShortTermRentals.

• Using the market average occupancy. A city average blends five year Superhosts with listings like yours that have zero reviews. Cut it.
• Treating cleaning as profit. After the 15.5% fee it is a small loss unless you gross the fee up.
• Forgetting the fee is on everything. Airbnb's help center is explicit: the fee applies to the nightly price plus fees you charge.
• Leaving out insurance and a repairs reserve. Standard renter policies often exclude paid guests. Something breaks every month.
• Pricing your own time at zero. One r/ShortTermRentals thread about two break-even properties got the same reply many times: once you pay cleaners, handymen and a manager, there is not enough left. If you plan to hire everything out, add a co-host fee to fixed costs.
• Ignoring weekday demand. Check comps' calendars for Monday to Thursday, not just weekends.
• Letting stays run past 29 nights. In many places a guest who reaches 30 days gains tenant rights. Cap maximum stay before you go live.

Results vary a lot by city, unit and season. Our how much Airbnb arbitrage hosts make breakdown shows the real spread of outcomes, including the many units that lose money.

Where to go from here

1. Get the rent, deposit and written subletting permission from the landlord.
2. Pull five true comps and cut their rate by 10% and occupancy by 5 to 10 points.
3. Rebuild the spreadsheet above with your own quotes for every line.
4. Calculate your maximum rent at a conservative occupancy and negotiate to it, or walk.
5. Only then price the furniture cart and set your launch date.

The Airbnb Arbitrage pack adds what this page cannot: 21 lessons across 6 modules with the full unit math walkthrough, the landlord pitch, the permission checklist and the turnover systems hosts wish they had on day one, for $19. All 16 Money Printer packs are $39.