← Back to calculators
Airbnb vs Long-Term Rental
Short-term guests or a steady tenant? Compare the net annual income of each strategy for the same unit, and see the occupancy your Airbnb would need to beat a long-term lease. Free and private. Nothing you enter leaves your browser.
Short-Term (Airbnb / STR) Side
Long-Term (Tenant) Side
Net Annual Income: Side by Side
| Line item | Airbnb / STR | Long-term tenant |
|---|
Airbnb or a long-term tenant?
It's the classic landlord dilemma: a short-term rental can gross far more per night than a lease ever will, but it also spends far more to earn it: cleaning between every stay, utilities and wifi on your dime, supplies, furnishing, platform fees, and management that typically costs two to three times the long-term rate. A long-term tenant earns less on paper but keeps almost all of it, month after month, with a fraction of the effort. Which wins for your unit comes down to three numbers: your realistic nightly rate, the occupancy you can actually sustain across a full year (not just peak season), and the market rent a tenant would pay. This calculator nets both strategies out side by side and tells you the break-even occupancy: how full your Airbnb has to stay just to match the tenant. If that number looks uncomfortably high for your market, the steady lease is probably your answer.
Pros & cons: standalone / whole rental property
Airbnb (short-term): pros
- Higher revenue ceiling: in strong tourist or event markets, gross income can substantially exceed market rent
- Nightly pricing flexibility: raise rates for peak season, festivals, and weekends
- No long-term tenant risk: no missed rent that takes months to resolve, no eviction process
- You keep access: block dates for your own use, and the unit is inspected (cleaned) after every stay so problems surface early
- Easy to exit: stop taking bookings and the calendar clears in weeks, not a lease term
Airbnb (short-term): cons
- Income is volatile and seasonal; a slow quarter or new competition can erase the premium
- Much higher operating costs: cleaning, utilities, supplies, furnishing, platform and management fees typically consume a large share of gross revenue
- It's a hospitality job: messaging, check-ins, reviews, restocking, or a management fee typically around 15–30% of revenue
- Regulatory risk: many cities require licences, cap nights, restrict STRs to principal residences, or ban them outright, and rules keep tightening
- Needs specialty insurance, and lodging/occupancy taxes often apply; furniture and finishes wear faster with constant turnover
Long-term tenant: pros
- Steady, predictable income twelve months a year with low vacancy
- Low expense ratio: the tenant typically pays their own utilities and brings their own furniture
- Far less work: one tenant search, then mostly quiet months; management is typically ~8–10% if outsourced
- Simpler compliance: a standard lease and landlord policy, generally no STR licence or lodging taxes
- Straightforward taxes and easier financing conversations with lenders
Long-term tenant: cons
- Capped upside: rent is fixed for the lease term even if the market jumps
- Tenant risk: non-payment or damage can take months to resolve through tenancy boards or courts
- Rent control in some provinces and states limits how fast rent can rise
- No personal use of the property while it's leased
- Less frequent eyes on the unit: small issues can go unreported for months
Pros & cons: basement suite in your own home
Renting a secondary suite you live above is a different decision than running a whole rental property: you're sharing your home, and the rules and taxes treat it differently too.
Airbnb the suite: pros
- You're on-site, so self-managing is genuinely easy: no 20% management fee, quick turnovers, instant guest help
- Flexibility: block dates whenever family visits or you want your house to yourself
- No long-term commitment: a bad guest is gone in days, not a lease term
- Turns otherwise idle space into income at your own pace (weekends only, summer only, etc.)
- In some cities, "hosted" rentals in your principal residence are the only STR type allowed; being owner-occupied can work in your favour (verify locally)
Airbnb the suite: cons
- A constant stream of strangers in your home: privacy, noise, security, and shared driveways/entrances become weekly negotiations
- The turnover work happens in your house: cleaning, laundry, restocking, late check-ins
- Many cities ban or heavily restrict STRs in secondary suites. Several (e.g., Toronto; most of BC under provincial rules) only allow short-term rental of a host's own principal residence, which a separate basement unit may not qualify as. Always check your local bylaw before buying furniture
- Tax complexity: in Canada, renting part of your home can affect the principal-residence exemption on that portion (especially if you make structural changes or claim CCA); in the US, renting part of your home means allocating expenses and depreciating the rented portion, with recapture when you sell. Talk to a tax professional first
- Fluctuating income from your own home, plus possible licensing, lodging-tax, and (in Canada, above thresholds) GST/HST obligations that never apply to a residential lease
Long-term basement tenant: pros
- One vetted person, steady rent, and a quieter, more predictable household
- Where the suite itself is legal, a long-term tenancy is almost always permitted, far simpler compliance than STR licensing
- Minimal ongoing work once a good tenant is in place
- Simpler taxes: residential rent is GST/HST-exempt in Canada, and steady income is easy to report; modest incidental renting is less likely to complicate the principal-residence picture (still confirm with a tax professional)
- Mortgage helper lenders understand: stable suite income can support qualification
Long-term basement tenant: cons
- Less flexibility: tenancy law protects the tenant, so reclaiming the space for family can take months and formal notice
- You still share the house: noise, laundry schedules, parking, and guests are permanent roommate-style negotiations
- Rent control may cap increases even as your costs rise
- A poor tenant match is much harder to exit than a poor guest review
- Utilities are often bundled into basement-suite rent, so you may carry part of that cost either way
Short-term rental rules & taxes by location
The single most important thing to know: most short-term-rental licensing and permitting happens at the city or municipal level, not the state or province. The summaries below cover only the statewide/provincial layer (registration schemes, typical lodging or accommodation taxes, and notable rules) as a starting point. Your city, county, condo board or HOA can (and often does) add licences, caps, principal-residence requirements, or outright bans on top.
About this calculator
Enter what your unit could earn per night on Airbnb and what it would rent for on a 12-month lease. The calculator builds a full annual income statement for each strategy (booking revenue less platform, management, cleaning, utilities, supplies, amortized furnishing, insurance and maintenance on the STR side; rent less vacancy, management, maintenance, utilities and insurance on the tenant side) and shows which nets more, by how much, and the occupancy at which the two strategies tie.
Airbnb vs long-term rental FAQ
Is Airbnb really more profitable than a long-term tenant?
Sometimes, but not automatically. Short-term rentals typically gross more per night, yet expenses eat a much larger share of that revenue (cleaning, utilities, supplies, fees, management), and occupancy is never 100%. In strong tourist markets a well-run STR can meaningfully out-earn a lease; in quiet markets the tenant often wins after expenses. That's exactly what the break-even occupancy figure tells you: how full you must stay just to tie the lease.
What occupancy rate should I assume?
Be conservative. Annual occupancy varies hugely by market and season; well-run listings in established markets typically average somewhere around 50–70% across a full year, but a new listing usually starts lower, and slow seasons drag the average down. Look at comparable listings' calendars in your neighbourhood, or market data from tools like AirDNA, rather than assuming peak-season numbers hold year-round.
What costs do new Airbnb hosts most often forget?
Utilities and internet (the host pays them, unlike most leases), consumables like toiletries, coffee and linen replacement, furnishing and its ongoing refresh, city licence or permit fees, lodging/occupancy taxes, proper STR insurance, and a bigger repair budget; dozens of turnovers a year wear a unit faster than one careful tenant. This calculator has a line for each so nothing hides.
Am I allowed to run a short-term rental at all?
Check before you spend a dollar. Many cities require a licence or registration, cap the number of nights per year, restrict STRs to your principal residence, or ban them in secondary suites and investment condos entirely, and condo boards and HOAs can add their own prohibitions. Rules change frequently, so verify the current bylaw for your exact address, not a blog post about your city.