United States · Short-term rental
Rental arbitrage startup cost and payback calculator.
Add furnishing, security deposit, first and last month rent and a reserve to see the cash tied up before opening, then how many months the furnishing takes to pay back at the occupancy you assume.
Your assumptions
The starting figures are illustrative placeholders, not market averages. Replace every one with your own. Nothing is looked up by address and nothing leaves your browser.
Result
What counts as startup cost
Four items need cash before the first guest: furnishing and supplies, the security deposit, first (and sometimes last) month’s rent, and a reserve for slow months. This page separates what is spent from what is only tied up. Furnishing and non-refundable setup fees are spent. The deposit is cash you may get back under your lease, and prepaid rent is rent you would owe anyway, so neither is part of payback. The reserve is a choice: months of fixed costs you hold in cash so a thin month is not an emergency.
Formulas. Cash needed = furnishing + deposit + first and last rent + setup fees + reserve months × fixed monthly costs. Payback months = (furnishing + setup fees) ÷ net monthly profit at your assumed occupancy; if net monthly profit is zero or negative there is no payback and the page says so. The comparison table repeats payback at 10 and 20 points lower occupancy.
Worked example (illustrative inputs)
Furnishing $8,000, deposit $2,000, first and last rent $2,000, setup fees $500 and a 3-month reserve on $2,310 of monthly fixed costs gives $19,430 of cash before the first guest, of which $8,500 is spent and $6,930 is reserve. At 75% occupancy with the other illustrative inputs, net is $381 a month, so payback is 22.3 months. At 60% the net is -$157 and the furnishing never pays back. That swing, from about 22 months to never, is why the page shows lower-occupancy cases next to the base case.
Why a reserve belongs in the number
Rent keeps falling due in an empty month. A reserve of three months of fixed costs does not make a weak unit profitable, but it sets how long you can be wrong before the money runs out. For hosts who own the property, the short-term rental startup payback calculator covers furnishing payback without a lease. Before signing anything, check the lease and permit checklist.
Sources
Airbnb Help Center, "Airbnb service fees" (article 1857). Retrieved 2026-10.
What this does not cover
- Whether your lease allows subletting or short stays, which only your lease, your landlord and local law can settle.
- Market data: there is no address lookup, no comparable listings and no occupancy or rate forecast.
- Platform ranking, seasonality, guest reviews or demand shifts, which you would need to put into your occupancy assumptions yourself.
- Income tax: the model stops at profit before income tax. See the tax explainer for how the IRS describes reporting.
- Financing costs on furnishing, the resale value of furniture, depreciation, or any lease buy-out or early-termination cost.
Frequently asked questions
How much money do you need to start rental arbitrage?
It is the sum of furnishing, deposit, prepaid rent, setup fees and the reserve you choose, and it varies enormously with the unit and city. Enter your own quotes; the page totals them and shows the portion that is reserve.
How long does rental arbitrage take to pay back?
Furnishing plus setup fees divided by net monthly profit at the occupancy you assume. If net profit is zero or negative, it never pays back, and the page shows lower-occupancy cases so you can see how fast that changes.
Is the security deposit part of payback?
No. It is treated as refundable cash tied up, subject to your lease. Prepaid rent is also excluded because it is rent you would owe anyway.
How big should the reserve be?
That is your call. The model expresses it in months of fixed costs so you can see how many bad months it covers.
Is 15.5% my platform fee?
It is a starting input. Airbnb's help article states that most hosts on the single-fee structure pay 15.5% and most on the split-fee structure pay 3%, with some paying more. The fee box is editable, so enter the figure on your own account.
Disclaimer
This is an educational model that runs on assumptions you enter. Results vary, nothing here is a prediction or a promise of income, and it is not tax, legal or financial advice. Confirm every figure with the official source, your lease and a qualified professional. Nothing you enter is sent anywhere.