Airbnb vs. Renting: Which is the Better Option?

Should you rent out your property as a short-term rental on platforms like Airbnb, or opt for a traditional long-term lease? Each option offers unique benefits and challenges.

Choosing the right approach can significantly impact your return on investment (ROI).

Dynamic Table of Contents for Webflow

Table of Contents

Airbnb vs Renting

Key Differences Between Short-Term Rentals (Airbnb) and Long-Term Rentals

Choosing between short-term and long-term rentals involves understanding the key differences that affect profitability, management effort, and legal considerations. Each rental strategy offers unique advantages and challenges. Below is a breakdown of the fundamental distinctions to help you decide which option is right for you.

Aspect Short-Term Rentals (Airbnb) Long-Term Rentals
Rental Duration and Flexibility Nightly or weekly stays; high flexibility for owner use and adjusting availability. Lease agreements of 6 to 12 months or more; provides stability but less flexibility.
Income and Payment Structure Income from nightly rates; dynamic pricing can maximize earnings during peak periods. Fixed monthly rent provides consistent and predictable income.
Occupancy and Turnover Rates High turnover; frequent guest changes and vacancy risks, especially in off-peak seasons. Lower turnover; stable tenants reduce vacancy risk and management effort.
Upfront and Ongoing Costs and Expenses Higher initial setup costs for furnishings; ongoing costs for cleaning, restocking, fees, and utilities. Lower upfront costs as tenants often bring furniture; fewer recurring expenses, usually limited to maintenance.
Management and Maintenance Effort High management demands due to guest turnover, cleaning, and bookings. Less day-to-day management; focus on tenant relations and periodic maintenance.
Legal and Regulatory Considerations More stringent regulations (permits, taxes, zoning); varies by location. Simpler regulations; focus on tenant rights and housing standards.
Profitability Potential High potential during peak seasons with dynamic pricing; fluctuates based on demand. Stable and predictable income with fixed leases; less seasonal impact.
Risk Factors Affecting Profitability High vacancy risk during low seasons; dependent on positive reviews and regulatory changes. Risk of tenant default or turnover costs; potential property damage expenses.
Tax Implications and Benefits Subject to specific taxes (e.g., occupancy tax); potential for more deductions with careful record-keeping. Simpler tax filing; clear deductions for mortgage interest, property taxes, and repairs.

Estimate the Net Profit of your Rental Property

Once you understand the key differences between short-term and long-term rentals, use our Rental Property Profit Calculator below to estimate your potential income based on the type of rental you choose.

Follow these steps to get started:

  1. Select Your Rental Type

    Click the "Short-Term Rental" or "12-Month Lease" button at the top of the calculator to choose the type of rental you want to analyze.
  2. Enter Your Income Details

    If you selected Short-Term Rental, fill in the average nightly rate, occupancy rate, monthly cleaning fees, utilities, maintenance costs, platform fees, and management fees.

    If you selected 12-Month Lease, enter the monthly rent income, utilities, maintenance costs, management fees, and the expected vacancy rate.
  3. Choose How to Provide Mortgage Information

    Use the dropdown menu to choose whether to calculate a new mortgage payment or enter an existing mortgage payment.

    If calculating, enter the mortgage loan amount, select a loan term (15 or 30 years , and provide the interest rate (the calculator assumes a fixed interest rate).

    If entering an existing payment, type the monthly mortgage payment amount.
    ‍
  4. Add Property-Related Expenses
    ‍
    Enter the annual property taxes and home insurance costs. If these are included in your mortgage payment, enter 0.

    Enter any monthly HOA fees you may have.
  5. Click the "Calculate" button to see your estimated monthly net income.
    ‍
    The estimated profit will appear below the calculator. Use this information to understand your potential income after expenses and decide which rental strategy is more profitable for your situation.‍

With this tool, you can quickly compare the potential financial outcome of managing a short-term rental like an Airbnb, VRBO, etc. versus a traditional long-term rental, helping you make the best decision for your investment.

Rental Property Profit Calculator

*If included in your mortgage payment via escrow, enter 0.

*If included in your mortgage payment via escrow, enter 0.

Let Us Help you Make the Best Choice

Now that you've estimated your potential rental income, take the next step to ensure the best returns. With The CT Brothers, you get a dedicated team of property managers and investors who know how to optimize both short-term and long-term rental strategies.

Book a call with us to discuss how we can help you with:

  • Targeted Property Searches: Find the ideal property that matches your investment goals and market conditions.
  • Full-service management: From marketing and guest relations to tenant communications sand maintenance, we handle every detail for both short-term and long-term rentals.
  • Data-Driven Insights: Use our experience managing over 50 high-yield rentals to make smart, profitable decisions.
Book a call
A photo of Christopher Trefry and Cameron Tingey.