Airbnb Profitability Calculator

What this calculator does

This holiday-let calculator works out whether a short-term rental produces real profit once the costs behind the nightly rate are counted. Enter the property price, your deposit, expected monthly revenue, the management fee percentage, and annual running costs, and it returns annual revenue, net income, and the cash return on the capital you committed.

The distance between gross revenue and net income is the whole story. Short-let revenue commonly looks like double a standard tenancy, but management at twenty percent plus VAT, all utilities, business rates or council tax, consumables, and furnishing replacement absorb much of the difference before the mortgage is paid. The year-by-year table keeps revenue, total costs, and net income in view together.

When to use it

Use it before buying in a destination market where you have real booking data from comparable listings' calendars rather than their advertised nightly rates. Run it twice — once at your expected occupancy and once at forty percent — because that is roughly what a listing achieves before it has accumulated reviews.

It is also the tool for deciding whether to convert an existing rental or a second home. Run it as a holiday let, then run the same property as a standard assured shorthold tenancy, and compare net income rather than gross. Since the Furnished Holiday Lettings regime ended in April 2025, the tax advantage that used to tip this comparison no longer exists, so the case has to be made on operating economics alone.

Understanding the inputs

Property price and deposit set the borrowing, and note that this requires a specialist holiday-let mortgage rather than standard buy-to-let, typically needing twenty-five to thirty percent deposit at a higher rate.

Monthly STR revenue should be nightly rate times occupied nights averaged across the year, including cleaning fees you collect and net of platform commission. Build it from comparable calendars and be honest about seasonality. Management fee is a percentage of revenue — around twenty percent plus VAT for full service. Annual expenses should include all utilities, broadband, business rates or council tax, holiday-let insurance, consumables, safety certificates, and an allowance for replacing furnishings.

How is this calculated?

Monthly Revenue = Nightly Rate × Occupancy Days + Cleaning Fees × Stays. Monthly Profit = Revenue − Platform Fees − Expenses.

A worked example

Take a £280,000 coastal cottage with a twenty-five percent deposit of £70,000 and a £210,000 interest-only holiday-let mortgage at 5.9 percent, costing £12,390 a year. At £160 a night with fifty percent occupancy, monthly revenue averages £2,400, or £28,800 across the year.

Management at twenty percent takes £5,760 and running costs are £9,000, leaving £14,040 before finance and about £1,650 after — a cash return of roughly 2.4 percent on the £70,000 deposit. Factor in the stamp duty surcharge on a second property, around £15,500 on this price, and the true cash invested is closer to £88,000, taking the return under two percent. The same cottage let on a standard tenancy at £1,100 a month would gross £13,200 with far lower costs and far less work.

Limitations and assumptions

The model cannot price regulatory risk, which now dominates UK short-term letting. Scottish licensing, Welsh registration, London's 90-night cap, and a growing number of English councils using planning controls can each remove the short-let option entirely. Run the standard tenancy numbers as your downside case before buying.

It also assumes level monthly revenue, which no seasonal property delivers, and excludes the £15,000 to £25,000 of furnishing and equipment needed to launch, the stamp duty surcharge, and legal costs. Tax is not modelled at all, and with the FHL regime abolished, interest relief is now restricted to a twenty percent credit for higher-rate taxpayers. Speak to an accountant about the post-2025 position and to the local authority about licensing before committing capital.