How to Estimate Airbnb Revenue for a Property You Might Buy
A practical method for estimating short-term rental revenue from comps, seasonality, and conservative assumptions, plus the mistakes that inflate projections.
Start with the formula, then earn the inputs
Annual revenue is roughly average daily rate times nights available times occupancy. The formula is easy. The hard part is choosing ADR and occupancy that are realistic for this property, not for the best listing in the neighborhood.
Build comps that actually match
Match bedrooms, bathrooms, sleeping capacity, property type, amenities, and location. A hot tub or a view can shift the rate meaningfully. Look at listings that are booked, not just listed, and at how their calendars fill across seasons.
Use several comps and look at the middle of the range, not the top. If you have to reach for an outlier to make the deal work, the deal probably does not work.
Account for seasonality and ramp-up
A year is not twelve identical months. Estimate peak, shoulder, and slow seasons separately, then add them up. Also assume a new listing takes time to build reviews and ranking, so the first months are often weaker than a mature comp.
Stress the estimate
Run a base case and a downside case. For example, if your base case is $250 a night at 60% occupancy, that is about $54,750 a year; a downside of $220 at 50% is about $40,150. Those figures are examples of the math, not a forecast for any market. If the downside case still covers the mortgage and costs, you have room.
Third-party estimate tools can be a useful cross-check, but they are models, not measurements. Never rely on a single number from one source.
FAQ
- Should I use the seller’s reported revenue?
- Ask for it and for the underlying platform reports, then verify against comps. Past performance depends on the prior host’s pricing, reviews, and season, and may not carry over.
- What occupancy should I assume?
- Use what comparable listings in your specific market achieve, and then test lower. There is no universal number, and defaulting to a round figure hides risk.
- Do cleaning fees count as revenue?
- Cleaning fees paid by guests generally offset your cleaning cost, so keep them separate from nightly revenue and do not treat them as profit.