## About Lofty

Lofty is a fractional U.S. real estate investing platform where visitors can browse property shares, learn about rental property investing, review calculators and guides, and access support for marketplace orders and account activity.

## Airbnb Calculator

Model a short-term rental using ADR, occupancy, platform fees, cleaning, management, and financing. See cash flow, RevPAN, expense ratio, and break-even occupancy.

## Your numbers

### Expenses

Monthly operating expenses: Taxes, insurance, utilities, repairs, supplies, HOA, and reserves.

Monthly cleaning cost: Platform fees% Airbnb / VRBO marketplace fees. Management fees%

### Financing

Down payment%= $73,750 cash Interest rate% Loan term yrs

## What is an airbnb calculator?

An Airbnb calculator estimates a short-term rental's revenue, expenses, and profit using average daily rate (ADR), occupancy, platform and management fees, cleaning costs, and financing. It helps investors compare short-term and long-term rental returns before buying.

## What your scenario is telling you

### Strong STR cash flow

Projected monthly cash flow of $941 can absorb seasonal dips.

### Strong vacancy buffer

Break-even occupancy of 48% leaves a healthy gap below your expected 65%.

### Lean expense ratio

Expenses are only 43% of revenue. That leaves more room for slow months or surprise repairs.

### Strong cash-on-cash

Cash-on-cash return of 11.6% is above the 10% bar most STR investors look for.

## Cash flow, equity, and ROI over time

| Year | Gross income | Op. expenses | NOI | Cash flow | Property value | Loan balance | Equity | Cum. ROI |
|---|---|---|---|---|---|---|---|---|
| 1 | $51,009 | $22,051 | $28,957 | $11,294 | $303,850 | $219,003 | $84,847 | -20.1% |
| 2 | $52,029 | $22,636 | $29,393 | $11,729 | $312,966 | $216,593 | $96,373 | 3.1% |
| 3 | $53,070 | $23,237 | $29,832 | $12,168 | $322,354 | $214,008 | $108,346 | 27.3% |
| 4 | $54,131 | $23,855 | $30,276 | $12,612 | $332,025 | $211,237 | $120,788 | 52.4% |
| 5 | $55,214 | $24,489 | $30,724 | $13,060 | $341,986 | $208,266 | $133,720 | 78.4% |
| 6 | $56,318 | $25,141 | $31,177 | $13,513 | $352,245 | $205,080 | $147,165 | 105.4% |
| 7 | $57,444 | $25,811 | $31,633 | $13,969 | $362,813 | $201,664 | $161,149 | 133.4% |
| 8 | $58,593 | $26,499 | $32,094 | $14,430 | $373,697 | $198,000 | $175,697 | 162.5% |
| 9 | $59,765 | $27,206 | $32,559 | $14,895 | $384,908 | $194,072 | $190,836 | 192.6% |
| 10 | $60,960 | $27,933 | $33,027 | $15,364 | $396,455 | $189,860 | $206,595 | 223.8% |
| 11 | $62,179 | $28,679 | $33,500 | $15,836 | $408,349 | $185,343 | $223,006 | 256.1% |
| 12 | $63,423 | $29,446 | $33,977 | $16,313 | $420,599 | $180,500 | $240,099 | 289.6% |
| 13 | $64,691 | $30,235 | $34,457 | $16,793 | $433,217 | $175,307 | $257,911 | 324.3% |
| 14 | $65,985 | $31,045 | $34,941 | $17,277 | $446,214 | $169,738 | $276,476 | 360.2% |
| 15 | $67,305 | $31,877 | $35,428 | $17,764 | $459,600 | $163,767 | $295,834 | 397.5% |

## How investors usually read these numbers

| Metric | Often strong | Watch out | Why it matters |
|---|---|---|---|
| Occupancy | 60% to 75%+ | Below 45% | Short-term rental revenue depends on both nightly rate and booked nights. |
| Expense ratio | Below 55% of revenue | Above 70% of revenue | STRs often have higher utilities, supplies, cleaning, and management costs than long-term rentals. |
| Cash-on-cash return | 10% to 15%+ | Below 6% | Compares annual profit with down payment, closing costs, and setup budget. |
| Break-even occupancy | 15+ points below expected occupancy | Near expected occupancy | Shows how much occupancy can fall before the property stops cash flowing. |

## How to run a airbnb analysis

1. **Enter the property and setup costs**: Add purchase price, closing costs, and a realistic furnishing budget for an STR (often $15,000 to $50,000).

2. **Estimate revenue**: Use comps from AirDNA, Rabbu, or local hosts. Set average daily rate, occupancy, and any cleaning fees you collect from guests.

3. **Add operating expenses**: Include utilities, supplies, taxes, insurance, repairs, HOA, and reserves. Add cleaning costs separately if you do not pass them through.

4. **Add platform and management fees**: Marketplace fees are usually 3% for hosts and management is often 15% to 25% of revenue. Co-hosting can be lower.

5. **Set financing terms**: STR loans usually require 15% to 25% down. Use a higher rate if you plan to use a DSCR loan.

6. **Read the snapshot and projection**: Review monthly cash flow, RevPAN, expense ratio, break-even occupancy, and the year-by-year cash flow.

## The math behind the result

### Core formulas

- Monthly revenue = (ADR x 365 x occupancy) / 12 + cleaning fees collected per stay.
- Monthly cash flow = revenue - operating expenses - cleaning - platform fees - management fees - mortgage payment.
- RevPAN = ADR x occupancy. The core revenue-per-available-night metric STR investors track.
- Cash-on-cash return = annual cash flow / cash invested (down payment + closing + furnishing).
- Break-even occupancy = fixed annual costs and debt / (((ADR + cleaning fee per-night equivalent) x 365) x (1 - platform and management fees)).

### Expert takeaways

- Most Airbnb calculators only estimate revenue. Without expenses, financing, and setup costs, a high revenue can still produce a poor cash-on-cash return.
- ADR and occupancy move together. Pricing for higher ADR can drop occupancy, and aggressive discounting can hurt RevPAN.
- Furnishing and setup costs commonly run $15,000 to $50,000. They drag on cash-on-cash return but are easy to forget.
- Local short-term rental regulations are real risk. Cities can cap permits, require primary residency, or ban STRs outright.

## Key terms in plain English

- **ADR** Average daily rate per booked night. Average daily rate is the average nightly rate paid by guests, before fees. ADR x occupancy = RevPAN, which is the core revenue metric for short-term rentals.
- **Occupancy** Share of available nights booked. Occupancy is the percentage of available nights that are booked by paying guests. Most short-term rental markets average 50% to 70% occupancy across the year.
- **RevPAN** ADR x occupancy. Revenue per available night equals ADR multiplied by occupancy. It captures both pricing power and demand in a single number, which is why short-term rental hosts focus on it instead of ADR alone.
- **Break-even occupancy** Occupancy needed to cover all costs. Break-even occupancy is the share of nights you must book to cover operating costs, fees, and mortgage. The bigger the cushion between break-even and expected occupancy, the safer the deal.
- **Expense ratio** Costs as a percent of revenue. Expense ratio divides total operating costs by total revenue. Healthy short-term rentals usually run 45% to 60%. Above 70% is a warning sign that the property barely covers costs in a normal year.