Airbnb vs Long-Term Rental: Bigger Homes Win in Most Big Cities

Nationally, a typical two-bedroom Airbnb grosses about twice what the same home would lease for. Once the platform, cleaners, utilities and furniture are paid, it keeps about as much as the lease.

The median active two-bedroom Airbnb in the U.S. grossed $36,400 in the year to August, about twice the $17,900 a year a lease brings at the Census Bureau's national median rent, according to AirROI, a short-term-rental data firm, which tracked about 189,000 active two-bedroom listings. That Census rent includes long-time tenants and runs below what a new lease brings, so the city comparisons below use HUD's median metro rents instead.

After Airbnb's fee and a standard set of running costs, the Airbnb keeps about $15,000. The lease keeps about $13,800 once the utilities tenants pay inside the rent, vacancy and repairs come out. A gap that small, under $2,000 a year, counts here as about even.

Size moves the verdict. In 19 of 30 big U.S. cities, a median four-bedroom Airbnb clearly out-earns a lease of the same size. Two-bedrooms pull ahead in nine of 31, every one of them a city that bars or limits investors' whole-home rentals.

Both sides of the comparison are moving. Airbnb expects every host to be on a single, host-paid service fee by year-end, and most hosts on it pay 15.5%. Rents have gone flat, with Apartment List's national median 0.4% below a year earlier in September. Renters have a stake too: officials in New York and Los Angeles defend their caps on hosting as a way to keep homes on the long-term market.

The answer, city by city

Each figure is what a median Airbnb nets in a year minus what a lease of the same size nets in the same metro area, with gaps under $2,000 shown as about even. The plus signs spread as homes get bigger.

† City bars or limits investors' whole-home stays under 30 nights.

At two bedrooms the Airbnb comes out ahead in nine cities, level in eight and behind in 14. At three bedrooms the split is 13, six and 12. The four-bedroom result holds under other cost and rent assumptions; the two- and three-bedroom counts shift with them.

New York City is left out because its Local Law 18 bars renting out an entire home for fewer than 30 days.

To check one home rather than a city median, enter its address to see what it could earn on Airbnb.

How the math works

For the median active two-bedroom, the platform's fee and cleaning eat more than half of the Airbnb's lead in gross, its other running costs and furniture eat the rest and then some, and the lease's own costs leave the two about even:

Airbnb's host fee is the largest single cost. Under the platform's single-fee structure, "the entire fee is deducted from the host's payout," and most hosts pay 15.5%, Airbnb's help center says.

Ellie Mertz, Airbnb's chief financial officer, said on the company's Aug. 6 earnings call that the remaining hosts are moving onto it. "We anticipate by year-end, our entire supply base will be on that single service fee," she said. In aggregate, she added, the fee "has a kind of downward pressure on pricing."

Some hosts pass it on. Chris Dickey, who rents out a three-bedroom in Moab, Utah, raised his listed prices to cover the fee while keeping guests' totals about the same, CNBC Make It reported in August.

"We are seeing a slow-down of booking, though, so I would suspect that the market has yet to normalize the fee change," he told the outlet. "Unfortunately, as an STR owner, you just have to play by their rules."

Costs the owner pays either way, such as property tax, the mortgage and HOA dues, are left out of both columns. The vacancy line uses the national rental vacancy rate, which the Census Bureau put at 7.3% in the second quarter.

The nights an Airbnb must book

A lease pays for every night of the year. An Airbnb gets paid only for the nights it books, while many of its costs, such as utilities, insurance and furniture, are owed whether or not a night books.

Nationally, the median two-bedroom books about as many nights as it needs to match a lease. Cities sit far apart around that line.

Charlotte and Nashville show how far. HUD puts the median two-bedroom rent in both metro areas at about $1,960 a month, utilities included.

In Charlotte, the median two-bedroom Airbnb booked 138 nights in the year to August, well short of the 201 it needed to match a lease. In Nashville it booked 177 and needed only 139, because each booked night brought in about half again as much.

The Charlotte home nets about $9,900 a year, against about $18,800 from a lease. The Nashville home nets about $25,500, against about $18,000.

Five cities need more than 200 booked nights, led by Orlando at 237. Jacksonville, Charlotte and Tampa fall furthest short, by 62 to 77 nights. Across all 31, the two-bedroom clearly trails a lease in 14 cities, most of them in the Sun Belt, and runs roughly level with it in eight.

Airbnb says demand overall is strong. "We continue to see strong underlying demand globally," Mertz said on the same call.

The lease side in the Sun Belt may be firming. "The decline in our national index in recent years has largely been driven by markets throughout the Sun Belt and Mountain West regions, but we are now beginning to see these regions rebound," Apartment List said in its Sept. 29 rent report.

Bedrooms change the answer

New Orleans and San Diego lead the four-bedroom winners. In New Orleans a four-bedroom Airbnb nets about $54,900 a year, against about $20,700 from a lease. The lease still wins at that size in Charlotte, Jacksonville, Orlando, Houston, San Antonio, Las Vegas and Indianapolis.

Phoenix shows the swing. A two-bedroom Airbnb there makes about $5,200 a year less than a lease, a three-bedroom about the same, and a four-bedroom about $7,900 more. Austin and Dallas move from a draw at two bedrooms to ahead at four.

Phoenix's four-bedrooms gross about 2.2 times what its two-bedrooms do, while HUD's four-bedroom rent for the metro is less than half again the two-bedroom's.

Several costs also come per home rather than per bedroom. Utilities and furniture rise with size, but insurance, supplies and software don't, which helps a four-bedroom keep about 46 cents of each gross dollar nationally, against 41 cents for a two-bedroom.

At this size the restriction pattern fades. Seven of the 19 four-bedroom winners are open cities, among them Phoenix and Scottsdale, which require only a city permit or license because Arizona law bars cities from banning short-term rentals.

Airbnb sees the same tilt. Mertz told analysts that "the continued disproportionate popularity of larger homes" has pushed up the average nightly price guests pay, and that growth in bedroom nights has outpaced growth in nights booked, a pattern that also shows in how Airbnb revenue scales with bedroom count.

Where Airbnb wins, investors face limits

Of the 31 cities, 19 bar or limit investors from renting out whole homes for stays under 30 nights. All nine two-bedroom winners are among them, and none of the 12 open cities comes out ahead at that size.

Houston, one of the open cities, has required registration since January, at $275 a unit a year, and from Jan. 1, 2027, will begin notifying platforms to remove listings without a certificate of registration.

The rules in the nine run from primary-residence requirements in Los Angeles, San Francisco and Boston, and in Chicago's houses and small buildings, to Honolulu's resort-zone limit, San Diego's 1% cap on whole-home licenses and a New Orleans permit lottery held block square by block square.

Restriction alone doesn't settle it. The lease comes out ahead or about even in 10 of the 19, including Atlanta and Minneapolis, which like Seattle allow one unit beyond the host's own, and Orlando and the City of Las Vegas, which require the host on site.

Visitor demand could explain both the rules and the margins. Two-bedrooms in the nine winners book 173 to 246 nights a year; in 11 of the 14 cities where the lease wins, they book 131 to 164.

Airbnb treats such cities as short of rooms. The company started its hotel push "in those markets that are regulatory constrained because it's an obvious opportunity for us to bring supply to those markets where we're not always able to fulfill demand that we already have," Mertz said on the August call.

In New York, Airbnb and the city disagree over what such rules buy. "Local Law 18 has failed to increase housing and lower rents as promised," Nathan Rotman, Airbnb's director for North America public policy strategy, said in a Sept. 10 post on the company's newsroom. Christian Klossner, who runs the city's Office of Special Enforcement, said in a September statement that the law "is not a ban; it simply prevents rentals that were already illegal."

A study by Kyle Barron, Edward Kung and Davide Proserpio, published in Marketing Science in 2021 and drawn from data gathered before the pandemic, found that Airbnb's growth accounted for about a fifth of rent growth in the typical zip code they studied. Alexander Marsella, an economist at Berry College, found that New York listings covered by the city's rule fell 87% after enforcement, with no measurable change in asking rents in the first year, as hosts shifted to 30-night minimum stays, later relisting and hosted rentals. A large platform response "need not imply equivalent housing-supply reallocation," he wrote in an August working paper that has not been peer reviewed.

A manager, or a stronger listing

A manager pulls a median home down. Paying one 20% of gross costs the national median two-bedroom about $7,300 a year. Even with the lease charged 10% of collected rent for its own manager, the Airbnb stays clearly ahead only in Honolulu at two and three bedrooms, and in three of 30 cities at four: San Diego, New Orleans and Scottsdale.

A stronger listing pushes it up. A self-managed listing in the top quarter of its city by gross beats the lease in 28 of 31 cities at two and three bedrooms and in all 30 at four. With a 20% manager, a top-quarter two-bedroom still beats a self-managed lease in 11 of 31.

The count of cities where the Airbnb wins climbs with each added bedroom, and a manager on both sides wipes out most of it.

Wendy Martin chose less money for less work. After trouble with guests at the small single-family home she hosted near Dayton, Ohio, she decided to rent it to her daughter and roommates, utilities included, for about $1,300 a month, she told Business Insider in a February essay. That is a family arrangement, not a market lease; on Airbnb the home had brought in about $2,300 a month.

"We'll make about half the money we would normally make, but I no longer have to be a cleaner," she said.

Los Angeles weighs second homes

Los Angeles, one of the nine two-bedroom winners, allows hosting only in a primary residence the host lives in more than six months a year. A median four-bedroom there nets about $18,100 a year more than a lease and needs about 122 booked nights to match one.

Mayor Karen Bass proposed a temporary exception for second homes through 2028, the year the city hosts the Olympics. In May the council's planning committee asked City Planning to design one that would end no later than the close of 2028. The department's August report estimates about six months to update the ordinance, and no council vote is set.

Under the 2020 draft ordinance the committee told City Planning to build on, second homes "would be subject to 60-day short-term rental booking limits each calendar year," the report says.

That is about half the 122 booked nights a median Los Angeles four-bedroom needs to match a lease.

About the data: City leases use HUD FY2027 median metro rents; national, Census 2024 median rent; both less tenant-paid utilities, vacancy and 5% repairs. Airbnb gross includes guests' cleaning fees. Insurance is a full short-term policy; no landlord policy is charged to the lease.