Short-Term vs Long-Term Rental 2027 Calculator
Short-term rental (Airbnb/Vrbo): 1.5-3x gross rent vs LTR but 30-50% expenses higher (cleaning, supplies, mgmt fee). LTR: predictable, lower margin but lower work. Tax: STR <14 days/year tax-free; STR substantial activity = active income (no passive loss limit). 7-day-or-less avg stay = no real estate professional status needed.
Gross Income Comparison
STR typically 1.5-3x LTR gross. But occupancy 50-75% typical (not 100%). High-tourist markets (Sedona, Asheville) 80%+. Mid-tier 55-65%.
Expense Differential
STR expenses 30-50% higher: cleaning $80-200/turnover, supplies $50-100/mo, platform fees 3-15%, professional mgmt 20-30% of revenue. LTR expenses 10-25% of rent.
Tax Treatment
STR with avg stay ≤7 days = active income. Passive activity loss rules do NOT apply. Deductions: depreciation, mortgage interest, all operating costs.
Source and Disclaimer
IRS Pub 527, AirDNA market reports. STR regulations vary by city — check local short-term rental ordinances.
Source: IRS Pub 527, AirDNA, biggerpockets.com. Last updated: May 2026.