What Is Cash Flow in the Short-Term Rental Industry?
In the Airbnb rental industry, cash flow is defined as the amount of money left
over each month
after you collect your rental income and pay all expenses associated with managing a short-term
rental business. For a vacation rental host or property investor, this means taking your gross
revenue from nightly bookings, cleaning fees, and any upsells and then subtracting the operating
costs such as Airbnb’s service fee, cleaning costs, utilities, maintenance, property management,
insurance, and taxes.
Why Should You Invest in Positive Cash Flow Airbnb Rentals Only?
Positive cash flow means your property is generating profit and
can cover both operating costs and financial obligations.
Negative cash flow, on the other hand, signals that expenses are exceeding
income, which may indicate issues with pricing, occupancy, or cost management.
Tracking cash flow is one of the most important ways to measure the profitability and long-term
sustainability of a short-term rental business.
How to Calculate the Cash Flow on a Vacation Rental Property
Calculating the cash flow of an Airbnb rental property can be done by following these steps:
- Estimate gross income: Multiply the average nightly rate by the
occupancy
rate
and number of days in a month. Add any additional income such as cleaning fees, parking,
experiences, or upsells.
- Account for platform fees: Deduct Airbnb or other OTA service
fees, usually
around 3-15% depending on the platform.
- Subtract operating expenses: Include cleaning costs, utilities,
supplies,
maintenance, HOA dues, insurance, and property taxes.
- Factor in management fees: If you use a property manager, subtract
their
commission (commonly 10-30% of revenue).
- Calculate net cash flow: Subtract total expenses from gross
income. The
result
is your monthly cash flow.
Positive cash flow means your property is generating profit each month, while negative cash flow
signals that expenses are outweighing your earnings.
Cash Flow Formula
The formula investors can use to calculate the cash flow of a short-term rental property is:
Airbnb Cash Flow = Gross Monthly Revenue - Total Monthly Expenses
Where
- Gross Monthly Revenue = (Average Nightly Rate x Occupancy
Rate x Days in Month) + (Cleaning Fee Charged to Guests x Bookings) + Other Income
- Total Monthly Expenses = Airbnb Host Fees + Cleaning Costs
+ Utilities + Maintenance + Property Management Fees + Monthly Insurance Premium + Taxes +
Monthly HOA Fees + Other Costs
Cash Flow Calculation Example
Let's go through an example of calculating the cash flow of an Airbnb rental property to make things
clearer.
A vacation rental property is listed for an average daily rate (ADR) of $300 and gets 10 2-day
bookings. The cleaning fee is $60/booking, and there are no extra fees. The property is listed on
Airbnb, so the host fee is 3%, and other monthly expenses amount to $2,200.
Using the vacation rental cash flow formula:
Gross Monthly Revenue = $300 x 10 x 2 + $60 x 10 = $6,600
Total Monthly Expenses = $6,600 x 3% + $2,200 = $2,398
Airbnb Cash Flow = $6,600 - $2,398 = $4,202
So, the cash flow of this short-term rental property is $4,202 per month, which is a strong positive
cash flow.
What Is an Airbnb Rental Cash Flow Calculator?
A cash flow calculator is an Airbnb analytics tool that helps investors and hosts quickly and
accurately estimate the expected cash flow of a property they own or plan to buy without the need
for tedious manual calculations. In this way, you can ensure positive cash flow investments.
Why Airbtics Has the #1 Airbnb Rental Property Cash Flow Calculator
Airbtics offers a free cash flow calculator that helps investors confidently predict the cash flow
of any Airbnb property around the world prior to purchasing it. While eliminating the need for Excel
spreadsheets prone to human error, this calculator provides positive cash flow vacation rental
property investments.
To maximize the accuracy of the Airbtics' rental cash flow calculator, you can combine it with the
power of the Airbtics' short-term rental data to estimate the cash flow of any vacation rental
worldwide.
How Does the Best Cash Flow Calculator for Airbnb Rental Investors Work?
Using the Airbtics' short-term rental property calculator is easy. All you have to
do is to:
- Enter the revenue data for the property.
- Fill in the cost numbers.
- Click "Calculate".
The input data includes:
- Daily rate
- Occupancy rate
- Days available
- Cleaning fee
- Number of bookings
- Extra fees (cleaning fees, pet fees, extra guest fees, etc.)
- Monthly mortgage payment
- Platform fees
- Cleaning costs
- Insurance
- Taxes
- Utilities
- Guest supplies
- Property management fees
- Other costs
The output is the monthly cash flow you can expect from the Airbnb rental property.
Key Benefits of the Top Cash Flow Calculator
The main advantages of using the Airbtics' free cash flow calculator for Airbnb rental properties
include:
Quick Profitability Check
Instantly see whether a property is likely to generate positive cash flow before you commit.
Data-Driven Accuracy
Leverage Airbtics' market insights on occupancy and nightly rates for realistic revenue
projections.
Expense Transparency
Understand the impact of Airbnb fees, cleaning, utilities & management costs on your bottom
line.
Scenario Testing
Adjust inputs like nightly rate or occupancy to compare best- and worst-case outcomes.
Investment Confidence
Make smarter purchase decisions by basing them on projected returns, not guesswork.
Time Savings
Skip manual spreadsheets and get clear cash flow estimates in seconds.
How to Invest in Positive Cash Flow Airbnb Rental Properties
Finding positive cash flow real estate investments to list on Airbnb goes through the following
steps:
- Find a top-performing market using the Airbtics.
- Locate a profitable submarket by looking at key performance data metrics.
- Identify the optimal property type, property size, and amenities.
- Confirm positive cash flow with the help of the Airbtics' Airbnb cash flow
calculator.
