Model a short-term rental without pretending every month is July.

ADR, or average daily rate, is the average price a guest pays per night booked, not counting nights the property sits empty. Combined with occupancy, it drives your revenue. A high ADR with low occupancy can earn less than a moderate ADR with steady bookings.

Multiply your average daily rate by the number of nights booked to get gross revenue, which is the same as ADR times occupancy times 365. Then subtract cleaning costs, platform fees, supplies, utilities, and management to find what you actually keep. Seasonality means you should model slow months, not just peak ones.

A short-term rental can earn more gross revenue, but it also carries higher expenses for cleaning, furnishings, utilities, platform fees, and management, plus more income swings from seasonality and occupancy. Sometimes it wins and sometimes a long-term rental is the steadier choice. Run both before deciding.

Pull occupancy from comparable short-term rentals in the same area rather than assuming a single number, since it varies widely by location and season. A conservative model uses below-average occupancy for slow months so a strong summer does not hide a weak year.

No. Many cities and counties regulate short-term rentals through permits, zoning, occupancy limits, or outright bans, and HOA rules can also restrict them. Always confirm current local regulations before buying a property to operate as an Airbnb.