Airbnb vs. long-term rental: which earns more?
Updated October 1, 2026 · 6 min read · By STRROI Research
Short-term rentals can earn far more gross revenue than a yearly lease, but they cost far more to run. The only fair comparison is net income on the same house. Here it is.
The same house, both ways
| Short-term rental | Long-term rental | |
|---|---|---|
| Gross revenue | $53,144 | $31,200 |
| Operating expenses | $30,584 | $13,900 |
| Net operating income | $22,560 | $17,300 |
| Cap rate | 5.0% | 3.8% |
| Monthly cash flow (20% down, 7.5%) | -$637 | -$1,076 |
In this example the short-term rental matches the long-term rental’s NOI at about 44% occupancy. Above that, the STR earns more; below it, the lease wins with far less work.
What the numbers do not show
- Work. An STR is a hospitality business: guest messages, cleanings, restocking, reviews. A lease is a few calls a year.
- Volatility. STR income swings with seasons, new supply and travel trends. Lease income is steady.
- Regulation. Cities keep tightening STR rules. A long-term lease is rarely at risk.
- Furnishing. STRs need $15,000 to $30,000+ up front for furniture and setup.
- Taxes. STRs can unlock the short-term rental tax strategy; long-term rentals generally cannot for W-2 earners.
- Flexibility. You can use an STR yourself between bookings, within limits.
The middle option: mid-term rentals
Furnished stays of 30 days or more, often for traveling nurses, insurance placements and remote workers, sit between the two. Rent per month is usually higher than a yearly lease, turnover and cleaning costs are much lower than nightly rentals, and many cities that restrict short-term rentals allow 30-day-plus stays. The trade-off is more vacancy between tenants than a yearly lease and less upside than a strong STR.
A mid-term plan also makes a good fallback when you underwrite an STR: if nightly bookings disappoint or local rules change, you have a second way to fill the calendar.
How to decide
Run both on the specific property. If the STR only wins at peak-season occupancy, take the lease. If it clears the long-term number by a wide margin at conservative occupancy, the extra work is paid for. STRROI underwrites every home for sale in a market as an STR so you can find the ones where that margin exists.
See every listing in a market, rated
STRROI underwrites every home for sale in a ZIP code as a short-term rental and ranks them 1 to 10. Try it on a sample market, no sign-up needed.
Questions
Is Airbnb more profitable than renting long-term?
Often, but not automatically. In our worked example the STR beats the long-term rental only above about 44% occupancy, after its much higher expenses. Run both on the specific property.
What occupancy does an Airbnb need to beat a long-term rental?
It depends on the nightly rate, rent level and expenses. Compare net operating income, not gross revenue, and find the occupancy where the two are equal.
Can I switch an Airbnb to a long-term rental later?
Usually yes, which makes long-term rent a useful floor when you underwrite an STR. Check that the property still works as a lease in case local rules change.
See every listing in a market, rated
STRROI underwrites every home for sale in a ZIP code as a short-term rental and ranks them 1 to 10. Try it on a sample market, no sign-up needed.