You buy the property (with or without a mortgage) and let it short-term yourself. Any yield and equity growth in the asset are yours.
Gross Yield
15.10%
Gross annual revenue: £33,215
Illustrative only. Actual occupancy, nightly rate, and costs vary by location and season. Mortgage cost assumes interest-only, standard buy-to-let/holiday-let terms. Not financial advice.
What This Calculator Does
This tool works out the real yield on an Airbnb or short-let (serviced accommodation) property — not just headline nightly rate, but what's actually left once cleaning, platform fees, management, and running costs are accounted for.
Choose your strategy first: Buy, if you own the property (with or without a mortgage), or Rent to Rent, if you lease it from a landlord and sublet it short-term. In Buy mode, start with purchase price, average nightly rate, and occupancy for a quick gross yield, then toggle "Include costs" to add mortgage, cleaning, OTA fees, management fees, council tax, bills, insurance, and furniture setup — that's when net yield, cash-on-cash return, and the ICR stress test become meaningful. In Rent to Rent mode there's no purchase price or mortgage — just the rent you pay the landlord plus the same running costs — and the headline number is your monthly net profit.
How the Calculation Works
Gross annual revenue = (nightly rate × occupied nights) + (cleaning fee charged × turnovers). Occupied nights = 365 × occupancy rate. Turnovers = occupied nights ÷ average length of stay.
Net income subtracts every real running cost. The accommodation cost depends on strategy: mortgage interest (interest-only) in Buy mode, or the monthly rent you pay the landlord in Rent to Rent mode. Both modes then subtract OTA host fee (% of gross revenue), management fee (% of rental revenue, excluding cleaning), actual cleaning cost per turnover, council tax, ground rent/service charge, bills, insurance, and furniture/setup cost spread over its amortisation period — all shown per month, since that's how these costs actually get budgeted.
Cash-on-cash return ("Yield on Capital") and the ICR stress test only apply to the Buy strategy, since both are measured against a deposit and a mortgage that don't exist in Rent to Rent. ICR checks gross revenue against annual mortgage cost at the lender's required ratio — short-let mortgages are less standardised than buy-to-let, so many lenders still assess affordability against notional long-term rental income rather than actual short-let revenue; check with your lender.
Worked Example
Take a £220,000 flat let on Airbnb at £120/night average, 65% occupancy, 3-night average stay, bought with a 75% LTV mortgage at 5.5% interest-only.
- Purchase price: £220,000
- Occupied nights: 365 × 65% = 237 nights
- Nightly revenue: 237 × £120 = £28,440
- Turnovers: 237 ÷ 3 = 79 per year (about 6.6 per month)
- Cleaning fee revenue: 79 × £60 = £4,740
- Gross annual revenue: £33,180
- Gross yield: 33,180 ÷ 220,000 × 100 = 15.1%
After mortgage (£165,000 × 5.5% = £9,075), OTA fee (3% = £995), cleaning cost (79 × £45 = £3,555), council tax, bills, insurance, and furniture amortisation, net yield typically lands well below the gross figure — which is exactly why running the full cost breakdown matters before committing capital.
Frequently Asked Questions
Is Airbnb yield really higher than long-term rental?
Gross yield on well-run short-lets is often higher than long-term rental, but net yield narrows the gap fast — cleaning, OTA fees, management, furniture, utilities, and higher voids all eat into the headline number. Compare net yield here against our Rental Yield Calculator for a fair like-for-like comparison.
Do I need planning permission or a licence to run a short-let?
It depends on location. Many London boroughs cap short-lets at 90 nights/year without planning permission, and some UK councils run separate short-let licensing schemes. Note that a property let commercially for 140+ days/year in England may be assessed for business rates instead of council tax — which small business rates relief can reduce to zero, so check with the VOA. Always confirm local rules before assuming year-round short-let is permitted.
What's the difference between the cleaning fee charged and the cleaning cost?
The cleaning fee charged is what the guest pays as part of their booking (revenue). The cleaning cost is what you actually pay a cleaner per turnover (expense). They're rarely identical — this calculator tracks both separately so you can see the real margin, not just assume they cancel out.
Will my mortgage lender accept short-let income?
Not always at standard buy-to-let rates. Some lenders exclude short-let use entirely, others require a specialist holiday-let or serviced-accommodation mortgage product, and many stress-test against notional long-term rental income rather than actual Airbnb revenue. Speak to a specialist broker before assuming standard BTL terms apply.
Does this calculator account for seasonality?
No — it uses a single average occupancy and nightly rate across the year. Real short-let income is seasonal (higher in summer/holidays, lower off-season), so treat the output as an annual average rather than a month-by-month forecast.
Do I need my landlord's permission to sublet on Airbnb under a Rent to Rent agreement?
Yes — almost always. A standard residential tenancy prohibits subletting and short-let use unless the landlord gives express written consent, typically through a company-let or rent-to-rent agreement rather than a standard AST. Operating without that consent can breach the tenancy, invalidate the landlord's mortgage or insurance, and in some cases amount to unlawful subletting. Always get a written rent-to-rent agreement in place before listing a property you don't own.