Good Airbnb profit margins vary by property ownership: Owned properties: 40-60% net margin (no mortgage).

Mortgaged properties: 20-35% net margin.

Break-even threshold: 15% minimum for sustainability.

Top performers achieve 50%+ through dynamic pricing, 80%+ occupancy, and premium amenities.

Markets like Nashville average 43% margins, while NYC averages 28% due to higher costs.

Average Airbnb occupancy rates by location: Urban markets: 65-75% (year-round demand).

Beach/mountain towns: 55-65% (seasonal variation).

Suburbs: 40-50% (weekend-heavy).

Top 10% of hosts achieve 80-90% through: competitive pricing, instant booking, Superhost status, professional photos, and 4.8+ ratings.

New listings typically see 30-40% first month, improving to market average within 3-6 months.

Airbnb fees in 2025: Host service fee: 3% of booking subtotal (standard).

Guest service fee: 14.2% average (paid by guests, affects your pricing competitiveness).

Total platform fees: ~17% split between host and guest.

For $100/night booking: You receive $97, guest pays $114.

Alternative fee structure: Host-only fee of 15-16% (no guest fee) available for hotels and some markets.

Payment processing: 3% for non-USD payments.

Monthly operating expenses breakdown: Cleaning: $50-150 per turnover (2-4 hour properties).

Utilities: +30-50% over normal residential use.

Supplies: $50-100 (toiletries, linens replacement).

Insurance: $100-300 (short-term rental specific).

Maintenance: 1% of property value annually.

Property management: 20-25% of revenue if outsourced.

Total operating costs typically consume 25-40% of gross revenue before mortgage/taxes.

Airbnb vs long-term rental profitability: Airbnb averages 1.5-2x higher gross income but requires 3-5x more work.

Example: $2,000/month long-term rental could generate $3,000-4,000 on Airbnb.

However, Airbnb has: 25-40% operating expenses (vs 5-10% long-term), vacancy risk, seasonal fluctuations, and local regulation risks.

Break-even analysis: Need 50%+ occupancy at 2x long-term rent to match profits after expenses.

Airbnb ROI calculation: Annual ROI = (Net Annual Profit / Total Investment) × 100.

Cash-on-cash return = (Annual Cash Flow / Initial Cash Investment) × 100.

Example: $300k property, $60k down, $25k annual profit = 41.7% cash-on-cash return.

Good ROI benchmarks: 8-12% for appreciation plays, 15-20% for cash flow properties, 20%+ for vacation rentals.

Include: purchase price, renovation costs, startup expenses, and opportunity cost in calculations.