Airbnb ROI Calculator for Cap Rate, DSCR and Cash-on-Cash
Enter an address and bedrooms, then your price, to see cap rate, cash-on-cash and DSCR next to the 50 comparable properties nearby.
Example, a 3-bedroom near downtown Nashville at $400,000: 8.2% cap rate · 8.0% cash-on-cash · 1.28 investor DSCR
Free, no signup · 20M+ listings · 15+ years of rental data
How the Airbnb ROI calculator works
Net operating income (NOI)
Revenue − operating costs
Cap rate
NOI ÷ purchase price
Cash-on-cash return
(NOI − mortgage) ÷ cash in
DSCR, two ways
NOI ÷ P&I, or gross ÷ PITIA
Revenue starts at the estimate's median year: its occupancy and revenue per booked night, cleaning fees included, with a slider for each. Costs start where the free Airbnb calculator's ledger does: Airbnb's 15.5% host fee, cleaning at the comparable listings' median fee for each stay, then utilities at 6% of revenue, maintenance 5%, insurance 2%, supplies 3% and software and other 1%, self-managed (a switch adds a manager at 20%), and property tax at 1% of the price. The 15.5% is Airbnb's single host-only fee, which hosts outside the European Economic Area and Switzerland pay from September 2026, and hosts there from October (16% in Brazil and Mexico); a host still on the older split fee pays about 3%, the guest paying a service fee on top, and can type that rate into the fee line. The loan is 20% down over 30 years at 7.0%, the calculator's default rate, or switch to a cash purchase. HOA dues, closing costs, immediate repairs and furnishing start at zero: fill in the ones your deal has.
Alongside the four numbers, the worksheet shows annual profit, a loan coverage panel with both DSCRs for US properties, and a 10-year view that adds loan paydown and appreciation.
The 3-bedroom near downtown Nashville example, worked through
Every formula above runs here on the free Airbnb calculator's example at its median year, bought for $400,000 and at $495,000, its break-even. At $400,000 its cap rate is 8.2%, its cash-on-cash return 8.0% and its investor DSCR 1.28.
| Line, and how it's set | $400,000 purchase | $495,000, break-even |
|---|---|---|
| Gross booking revenueThe estimate's median year from the 50 comparable properties nearby, cleaning fees included: 51% occupancy at $399 per booked night, where the worksheet opens | $74,321 | $74,321 |
| Operating incomeAfter Airbnb's 15.5% host fee, cleaning and the ledger's running costs, self-managed | $36,621 | $36,621 |
| Property tax1% of the price, the calculator's default | −$4,000 | −$4,950 |
| Net operating income (NOI)Operating income − property tax (no HOA) | $32,621 | $31,671 |
| Cap rateNOI ÷ price | 8.2% | 6.4% |
| Mortgage, principal and interest20% down, 30 years at 7.0%, the calculator's default rate | −$25,548 | −$31,615 |
| Cash flowNOI − mortgage | $7,073 | ≈ $0 |
| Cash in20% down plus closing costs at 2% of the price, before furnishing | $88,000 | $108,900 |
| Cash-on-cash returnCash flow ÷ cash in | 8.0% | ≈ 0% |
| Investor DSCRNOI ÷ mortgage | 1.28 | 1.00 |
| Lender DSCRGross ÷ PITIA: the mortgage, property tax and the ledger's $1,486 starting insurance line | 2.39 | 1.95 |
At $400,000, the median year leaves $7,073 after the mortgage, $589 a month. The price sits a little under the about $410,000 at which net operating income covers the mortgage 1.25 times, so it clears that test too. The year's payments also repay $3,251 of the loan: counted with the cash flow, the first-year return on the $88,000 put in is 11.7%.
The median year has room for a slower one: bookings can fall about 15%, $11,200 of revenue, before cash flow at $400,000 reaches zero, because Airbnb's fee, cleaning and supplies fall with them (utilities, maintenance, insurance and software held at their starting amounts). Self-managed is the ledger's default; with the worksheet's manager switch on at 20% of revenue ($14,864 a year), the same year covers the mortgage up to about $295,000 instead of $495,000; at $400,000 it falls $7,791 short of the mortgage.
At $495,000 the median year just covers its costs, yet the lender DSCR still reads 1.95: it divides the full gross by PITIA, before Airbnb's fee, cleaning and running costs come off. That's why the worksheet shows both ratios (see DSCR for Airbnb loans).
Insurance starts at the ledger's $1,486, 2% of revenue, a floor rather than a quote. Nashville's permit asks for at least $1,000,000 of liability cover per occurrence, so type in your short-term rental policy's premium: the worksheet carries it into operating income and both DSCRs.
Closing costs at 5% of the price instead of 2% bring cash-on-cash to 7.1%, and each $10,000 of furnishing and setup takes about 0.8 points off. A well-run 3-bedroom does better: at the 75th percentile, $102,283 gross, the same $400,000 purchase returns 25.3% cash-on-cash. The ledger behind operating income is on the free Airbnb calculator.
What is a good cap rate for an Airbnb?
A good cap rate beats your loan's break-even cap rate, the one at which net operating income just covers the mortgage: 6.4% with 20% down over 30 years at the calculator's 7.0% default. The Nashville example makes 8.2% at $400,000.
The break-even cap rate is the share of the price you borrow times the loan constant, a year's payments per dollar borrowed: 80% × 7.98% = 6.4% on the defaults. Because property tax is already inside NOI, the break-even cap rate is the same at any purchase price. Each half point of mortgage rate moves it about 0.3 points, and a bigger down payment lowers it.
Clearing the break-even means the home pays its way; clearing the loan constant, 7.98% at 7.0%, means the loan adds to your return, because each borrowed dollar earns more than its payments cost. Between 6.4% and 7.98% a deal still cash-flows, but leverage pulls the return on your cash below the cap rate. The Nashville example's 8.2% clears both: its cash flow is 8.8% of the down payment, and 8.0% once closing costs join the cash in.
- Break-even cap rate6.4%
- Loan constant7.98%
- Nashville example at $400,0008.2%
| 30-year fixed rate | Loan constant | 20% down | 25% down |
|---|---|---|---|
| 6.0% | 7.19% | 5.8% | 5.4% |
| 6.5% | 7.58% | 6.1% | 5.7% |
| 7.0% | 7.98% | 6.4% | 6.0% |
| 7.5% | 8.39% | 6.7% | 6.3% |
| 8.0% | 8.81% | 7.0% | 6.6% |
The cap rate at which NOI, after property tax and HOA, equals a year's principal and interest. 25% down is the least Lima One's short-term rental program takes on a purchase: it lends up to 75% of the price.
Then check the price against the market. The OCC defines a cap rate as a property's NOI over its sales price, so it moves with the costs you count: compare homes near the address on the same costs, not with a rule-of-thumb range. Then set the Airbnb against the same home on a 12-month lease (Airbnb vs long-term rental): the gap is what the extra work of hosting earns.
What is a good ROI for an Airbnb?
A good Airbnb ROI is a cash-on-cash return above what the cash earns risk-free, about 4.8% to 5.2% on the 10-year Treasury in September 2026; the further above, the more room for a slow year. The Nashville example returns 8.0% at $400,000.
- Cash-on-cash, median year at $400,000
- 8.0%
- First-year return, with the loan principal repaid
- 11.7%
- Cash-on-cash at the 75th percentile
- 25.3%
A return has three layers. Cap rate leaves the loan out. Cash-on-cash, the year's cash flow over the cash you put in, is the yield on your own money after the mortgage, the number to set against a Treasury yield, a savings rate or your next-best deal. Total return adds the principal each payment repays and any rise in the home's value: the worksheet's 10-year view adds both, with appreciation and revenue growth starting at 3% a year for you to set.
Plan on the median year: the 75th percentile, 25.3% here, is what running the home well can add, not the case to buy on. A cash-on-cash return under the Treasury's means the work and risk of hosting aren't being paid for.
Is buying a property for Airbnb still a good investment?
Yes, where the address passes three checks: its median year's cap rate clears your loan's break-even, 6.4% at the 7.0% default rate; its cash-on-cash return beats the 10-year Treasury; and its zone takes new short-term rental permits.
The Nashville example passes the first two at $400,000: cap rate 8.2%, cash-on-cash 8.0%.
| Check | The test | Nashville example at $400,000 |
|---|---|---|
| Cap rate | Beats the loan's break-even cap rate: 6.4% at 20% down and 7.0% over 30 years | 8.2%: passes |
| Cash-on-cash return | Beats the 10-year Treasury, about 4.8% to 5.2% in September 2026 | 8.0%: passes |
| Permit | The zone takes new permits for a short-term rental the owner doesn't live in | Downtown and mixed-use, office and commercial zones do; AR2a, R, RS and RM zones don't |
The upside is real: a well-run 3-bedroom there, at the 75th percentile's $102,283 gross, returns 25.3% cash-on-cash on the same purchase, and every mortgage payment adds principal on top. Buy on the median year, though: the 75th percentile is the reward for running the home well, not the plan.
A yes turns into a no when the price runs past the break-even ($495,000 for the Nashville example), a manager's cut lands on a thin margin, the rate comes in above the default, or the address sits in a zone without new permits (Nashville's permit types). The worksheet runs the first three on your own price, loan and costs. To shortlist markets before an address, the STR investment analysis guide walks through market-level data.
DSCR loans for Airbnb properties
DSCR, the debt service coverage ratio, divides a property's income by its loan payments. The worksheet shows it two ways: investor DSCR, net operating income ÷ principal and interest, and lender DSCR, gross rent ÷ PITIA, the ratio DSCR lenders publish.
The investor ratio is the bank regulators' definition: the OCC's handbook calculates DSCR by dividing NOI by the annual debt service, leaves each bank's lending policy to set minimum coverage by type of property, and notes that properties with volatile cash flows, such as hotels, may warrant a higher ratio. DSCR loans qualify an investor on the property instead of personal income, and the lenders below divide rent by principal, interest, taxes, insurance and association dues.
What DSCR lenders look at
There's no one minimum: each lender sets its own, and the rent it counts for a short-term rental decides the ratio as much as the rule does. As published in September 2026:
| Lender | Coverage it looks for | Short-term rental income | Leverage and reserves |
|---|---|---|---|
| Kiavi | Ratios as low as 0.8x | Its DSCR page doesn't address short-term rentals; for rentals generally it counts the lower of 110% of the appraised market rent and the lease rent | Up to 80% of value; no minimum liquidity requirement |
| Lima One Capital | Its guide says lenders look for 1.2 or more, and that short-term rental requirements can differ | Its short-term rental program underwrites with market data on nearby short-term rentals' actual income | Short-term rentals: up to 75% of a purchase, 700 minimum credit score |
| Griffin Funding | No minimum ratio; below 1.0 with reserves and a larger down payment | Appraisal market rent, rental history or short-term rental market data, by program | Down payment from 15% with 740+ credit |
| Fannie Mae (conventional loan) | Not a DSCR loan: the borrower qualifies on income | One-unit investment homes: long-term rents (Form 1007), or on a purchase of a unit legally permitted as a short-term rental, three comparable short-term rentals; half the gross counts as net rental income | Six months of PITIA in reserves on an investment purchase |
From each lender's published pages and Fannie Mae's Selling Guide (reserves: Desktop Underwriter loans). Terms change; ask for a current quote.
On the Nashville example at $400,000, the investor DSCR is 1.28 and the lender DSCR on the full gross 2.39. A lender that counts only part of a short-term rental's gross reads lower, so ask what share yours counts and enter that as the revenue. The worksheet is a free DSCR calculator for any US address: both ratios move as you change the price, down payment, rate, tax, insurance and HOA.
Back-calculate the price a DSCR loan supports
Work backward from the rent. For the Nashville example's $74,321 gross at a 1.25 lender DSCR, on the calculator's default loan:
| Step, and how it's worked | Result |
|---|---|
| Most PITIA the rent allows$74,321 gross ÷ the 1.25 lender DSCR | $59,457 |
| Left for principal, interest and tax$59,457 − $1,486 insurance (no HOA) | $57,971 |
| Price at a 1.25 lender DSCR$57,971 ÷ 7.39%, what each dollar of price costs a year: 80% borrowed × the 7.98% loan constant + 1% tax | about $785,000 |
| If the lender counts 75% of gross$74,321 × 75% ÷ 1.25 − $1,486 = $43,107, ÷ 7.39% | about $585,000 |
| Price at 1.25 on NOI$36,621 operating income ÷ 8.98%: 1% tax + 1.25 × the mortgage per dollar of price | about $410,000 |
| Break-even priceAbove it, the median year no longer covers the mortgage | $495,000 |
Qualify on the lender's ratio, buy on yours. A lender reading the full gross at 1.25 would stretch to about $785,000, and one counting 75% of it to about $585,000, yet the median year stops covering the mortgage past $495,000, where the lender DSCR still reads 1.95. Neither lender price is a loan offer: ask what share of short-term rental income yours counts.
How much do you need to start an Airbnb?
Buying one takes the down payment, closing costs, furnishing and setup, and cash reserves. For the Nashville example at $400,000, that's about $104,000 to $116,000 before furnishing.
| What it pays for, and how it's set | At $400,000 |
|---|---|
| Down payment20%, the calculator's default; lenders set their own (see the lender table above) | $80,000 |
| Closing costsTypically 2% to 5% of the purchase price, per the CFPB | $8,000–$20,000 |
| Cash reserves6 months of PITIA ($2,586 a month), what Fannie Mae asks for on an investment purchase | $15,517 |
| Short-term rental permitNashville's not-owner-occupied permit fee | $313 |
| Cash to open, before furnishingAdd furnishing, repairs and setup at your own quotes | $103,830–$115,830 |
Check the address can be permitted before you buy. Nashville issues new not-owner-occupied permits downtown and in mixed-use, office and commercial zones, not in AR2a, R, RS or RM zones, and its permit checklist asks for liability insurance of at least $1,000,000 per occurrence and a responsible party within 25 miles.
Furnishing, repairs and setup are yours to quote: the worksheet has a field for each, and adds them, with closing costs, to the cash that cash-on-cash divides by. The CFPB also suggests keeping an emergency cushion of three to six months of expenses. If you already own the home, the cash to start is the furnishing, permit and insurance; to rent a place and host it instead, the rental arbitrage calculator tests whether the rent leaves a margin.
Airbnb ROI calculator FAQ
Often, yes, judged address by address. Bought for $400,000 with 20% down at 7.0%, a 3-bedroom near downtown Nashville grossing $74,321 in its median year makes a cap rate of 8.2% against a break-even of 6.4%, and 8.0% cash-on-cash against a Treasury at about 4.8% to 5.2%, provided its zone issues new permits.
Cap rate = net operating income ÷ purchase price, where NOI is revenue less Airbnb's fee, running costs, property tax and HOA, before any mortgage. Cash-on-cash = NOI minus the year's mortgage payments, divided by the cash you invested: down payment, closing costs, repairs and furnishing. The first ignores financing; the second includes it.
There's no single minimum; each lender sets its own. As of September 2026, Kiavi lends at ratios as low as 0.8x, Griffin Funding has no minimum ratio, and Lima One's guide says lenders look for 1.2 or more. Most divide monthly rent by PITIA: principal, interest, taxes, insurance and association dues.
Divide the year's rent by the lender's target ratio for the most PITIA allowed, subtract insurance and HOA, then divide by the yearly mortgage and tax cost per dollar of price. At 1.25 on the full gross of a 3-bedroom near downtown Nashville grossing $74,321 in its median year, that's about $785,000, or about $585,000 counting 75%.
Budget the down payment, closing costs of 2% to 5% of the price, furnishing and setup, and reserves. A 3-bedroom near downtown Nashville bought for $400,000 needs roughly $104,000 to $116,000 before furnishing: $80,000 down, six months of PITIA held back and Nashville's $313 permit.
Yes, from lenders that underwrite short-term rentals. Lima One's program uses what nearby short-term rentals actually earn, and Griffin Funding, by program, takes market data, rental history or an appraiser's rent. Fannie Mae lets a conventional purchase of a permitted short-term rental count three comparable rentals, half their gross as net rental income.
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