Airbnb Profitability 2025: How to Calculate True Costs Before Listing

So you’re daydreaming about turning that extra room, vacation condo, or backyard ADU into an Airbnb moneymaker? Good idea but let’s get real before the bookings roll in.

It’s 2025, and short-term rentals are more popular than ever. Travelers love them, neighbors sometimes hate them, cities tax them, and new hosts often misunderstand them. One thing too many people still get wrong? How to figure out what they’ll actually earn.

If you’re new to hosting, stick around. This guide breaks down the real numbers: what you really make after taxes, cleaning fees, downtime, and the dozens of sneaky costs Airbnb influencers forget to mention.

Why Airbnb Is Still Hot But Tougher?

There’s no denying it: Airbnb is here to stay. The U.S. alone has millions of active short-term rentals. Demand remains strong for unique stays cozy cabins, urban lofts, lake houses you name it.

But here’s the flip side:

• Local governments are clamping down. More permits, occupancy taxes, and limits on how many nights you can rent.

• Competition is fierce. There’s always another host with sharper photos, cooler amenities, or a lower price.

• Guest expectations keep climbing. Think hotel-level cleanliness, 24/7 availability, and zero surprises.

All this means hosts in 2025 can make great money but only if they plan for the full cost puzzle.

The Rookie Math Trap

Let’s start with the biggest myth.

Myth: “I’ll charge $250 a night, stay booked all month, and clear $7,500 a month, easy!”

Reality: Nobody hits 100% occupancy all year. Not even superhosts. Not even in Miami during spring break.

Most places average 50%–70% annual occupancy. And your average nightly rate won’t stay the same every season. Friday nights cost more than Tuesdays. Holidays book faster. Off-season? Not so much.

So that $250 per night might drop to $180 on weekdays, or $120 in your slowest month. And when you’re vacant, you’re still paying bills.

The Only Way to Know, Run Real Numbers

Before you list your place, grab a free STR (short-term rental) calculator plenty exist, but GetChalet offers one that pulls real local occupancy and nightly rates for your zip code. Pop in your address and you’ll see how a real year could shake out.

Most new hosts are shocked by two numbers:

• Your actual occupancy rate

• The range your nightly rate really lives in
  

That’s your baseline. But don’t stop there you still need to factor in every hidden cost.

What You Really Pay as Your Airbnb Costs?

Here’s where rookie hosts lose money: They only budget for cleaning fees and a new bedspread. Let’s fix that.

1. Your Mortgage or Rent

Obvious but worth saying: if you’re buying a property or have a mortgage, that payment is your biggest monthly cost. Don’t forget property taxes and homeowners insurance.

Example:
A $400,000 house with 7% mortgage interest might run $2,400–$3,200/month in principal and interest. Add local taxes, maybe $300–$500/month more.

2. STR Insurance

Regular homeowners insurance often doesn’t cover short-term guests. Many insurers treat it as a commercial risk. STR-specific policies can run $500–$1,500/year.

3. Utilities

When you Airbnb, you pay for everything: electricity, gas, water, trash, high-speed WiFi, streaming TV. Expect $200–$500/month, depending on your location.

4. Cleaning

Most hosts hire professional cleaners. Expect $50–$200 per turnover. If you rent out your place every weekend, you might have four or more cleanings a month.

Some hosts clean themselves to save money, but that’s time-consuming — and guests expect spotless.

5. Platform Fees

Airbnb takes a cut: usually about 3% of what guests pay you. Guests also pay their own service fees, which don’t come out of your pocket, but they do affect what you can charge.

6. Furnishings & Stocking Up

Travelers expect fully stocked kitchens, extra towels, good beds, fresh linens. Furnishing and staging a place can run from $5,000 to $20,000 upfront. Budget a refresh every few years.

7. Repairs & Wear and Tear

Short-term stays mean frequent use. Things break. Walls get scuffed. Sheets wear out faster. Many hosts set aside 5–10% of gross income for maintenance and upgrades.

8. Property Management (Optional)

Managing an Airbnb takes work: messaging guests, coordinating cleaners, handling complaints. Some folks hire a co-host or full-service manager, which often costs 10–30% of gross bookings.

If you plan to travel or work full-time, this cost is worth budgeting for.

9. Local Lodging Taxes & Permits

Many cities add a lodging tax — sometimes called hotel or occupancy tax — that can range from 2% to 15% of rental income. Some platforms collect and remit this for you, some don’t.

Also check if your city requires an STR permit. Application fees can run $50–$500, plus possible annual renewals.

10. Income Taxes

Finally, you’ll owe federal and (if applicable) state income tax on profits. The upside: you can deduct many expenses. But you’ll need to keep good records.

The Seasonality Surprise You?

Let’s say you’ve run all the numbers and you like what you see. Great. But here’s another twist: seasonality.

• A beach town may be fully booked in summer  and half-empty in winter.

• A ski chalet may flip that around.

• A city condo could see dips when local events stop.

It’s normal to see occupancy swing 20% to 40% between peak and slow months.

Plan for it. Smart hosts adjust rates with dynamic pricing tools, offer discounts for off-season bookings, or set minimum stay requirements to make low months worth it.

What Does a Real Airbnb Profit Look Like?

Let’s put it all together with a simple scenario.

Example Property:

• 2-bed condo, tourist-friendly city.

• Mortgage + taxes + insurance: $2,500/month

• Utilities: $300/month

• Cleaning: $125/turnover × 4 = $500/month

• Repairs fund: $200/month

• Airbnb fee: about 3% of gross.

Projected Gross:

• Average $200/night × 20 nights/month = $4,000/month

Monthly Costs:

• $2,500 (loan, taxes, insurance)

• $300 (utilities)

• $500 (cleaning)

• $200 (repairs)

• $120 (Airbnb fee)

Net Monthly Profit:
$4,000 – $3,620 = $380/month

Not bad, but is it worth the extra hassle vs. a long-term tenant who pays utilities and leaves you alone for 12 months? For some, yes. For others, not really.

Don’t Forget Income Tax

Your net Airbnb income is taxable. You’ll likely file a Schedule E (rental income) or Schedule C (if you provide services like breakfast, tours, or daily cleaning). You can deduct:

• Mortgage interest

• Property taxes

• Insurance

• Cleaning fees

• Supplies

• Repairs

• Depreciation

The catch? Keep records. And talk to a tax pro.

How to Stress Test Your Numbers?

Airbnb earnings are never guaranteed. So run a worst-case:

• What if occupancy drops 20%?

• What if your average rate slips $30 a night?

• What if you get hit with a surprise $3,000 repair?

If your profit turns negative in that scenario, you may want to rethink the plan or plan for a backup.

Should You Just Do a Long-Term Rental Instead?

Sometimes, renting to a year-long tenant makes more sense:

• You collect steady rent.

• Tenant covers utilities.

• Fewer turnovers, less cleaning.

• No hotel taxes or city STR hassles.
  

Run both scenarios side-by-side. Sometimes the “Airbnb goldmine” nets only a few hundred bucks more with a lot more work.

Quick Tips to Boost Your Odds

• Use pro photos. Guests scroll past dark or blurry listings.

• Offer flexible cancellation — it can boost bookings, especially last minute.

• Automate pricing with smart tools — your rate should adjust to local demand.

• Stay on top of reviews. Cleanliness and clear communication = good ratings = better bookings.

• Respond fast. Airbnb’s search favors hosts who reply quickly.

• Keep a cushion. Have a fund for repairs and slow months.

Airbnb Can Work  But Only If the Math Does

A well-run short-term rental can outperform a long-term rental but it’s a real business. Not passive income. If you treat it like a hobby, expect hobby-level returns.

Run your numbers honestly. Don’t assume 100% bookings. Add every expense you can think of and then tack on a little extra. If you still like the profit? Congratulations you’re better prepared than half the new hosts out there.

What to Do Next

• Run your property through a short-term rental calculator for real local numbers.

• Make your full cost list fixed and surprise expenses.

• Stress-test your profit with lower occupancy or rates.

• Talk to a tax advisor who understands STRs.

• Research your local STR rules before you buy furniture or snap photos.

If you do it right, you’ll know exactly where your profit comes from and how to protect it.