Vacation Rental ROI Calculator: Return on a Short-Term Rental
See whether a vacation rental property paid off — by comparing the cash invested at purchase against net rental income and appreciation over the years you owned it.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year value projection
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Total ROI | Annualized ROI | Net profit |
|---|---|---|---|
| $250k all-in · $400k net · 10yr | 60.00% | 4.81% | $150,000.00 |
| $100k · $200k · 8yr | 100.00% | 9.05% | $100,000.00 |
| $500k · $1.5M · 15yr | 200.00% | 7.60% | $1,000,000.00 |
| $180k · $120k · 5yr (underperform) | -33.33% | -7.79% | -$60,000.00 |
How This Calculator Works
Enter the all-in purchase cost (down payment + closing + furnishing), the total net proceeds (cumulative net rental income plus any sale proceeds, less all expenses), and the years held. The calculator reports total ROI, net profit, and the annualized rate.
The Formula
Return on Investment
V_start = amount invested, V_end = amount returned; annualized ROI = (V_end / V_start)^(1/n) − 1
Worked Example
A vacation rental with $250,000 all-in purchase cost producing $400,000 of total net proceeds over 10 years posts a 60% total ROI — about 4.8% a year annualized. That sits below long-run stock-market returns, which is typical: vacation rentals trade liquidity and effort for the chance to capture both yield and appreciation in one asset.
Key Insight
Vacation rental ROI looks better on a spreadsheet than in practice because most owners underestimate operating costs. Cleaning, platform fees (Airbnb's 14% + host fee), maintenance, utilities during vacancy, and seasonal demand swings routinely consume 30% to 40% of gross rent. The properties that actually outperform are in supply-constrained markets where appreciation does most of the work — not in oversupplied STR markets where regulations and competition compress yield.
Frequently Asked Questions
What goes into purchase cost?
Down payment + closing costs + initial furnishing (often $10,000 to $50,000 for a turnkey STR). Use cash invested, not the financed amount — the loan principal isn't your equity at risk.
What gets deducted from gross rent?
Operating expenses (insurance, property tax, utilities, internet, supplies), management fees (10% to 30% of revenue), cleaning costs, platform commission (typically 3% to 15%), and mortgage interest. What's left is what flows to ROI.
Should I include appreciation?
Yes if you sold. Total proceeds = cumulative net rental + sale price minus selling costs. For current holdings, use a current appraised value as the implied sale proceeds for an unrealized ROI figure.
What is a good vacation rental ROI?
Stabilized properties often clear 6% to 12% annualized including appreciation. Top performers in scarcity markets reach 15%+; oversupplied STR markets often return below market index levels once honest costs are counted.
Are STR regulations a risk?
Yes — and rising. Many cities have restricted or banned short-term rentals (NYC, San Francisco, large parts of Europe). Regulatory risk now factors heavily into STR underwriting; assume the regulation can tighten any time.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Methodology & Review
Return is net rental proceeds (gross rent less operating expenses, management fees, mortgage interest, and platform fees) against the all-in purchase cost. The annualized rate spreads the return across the years held. Appreciation at sale should be included in the proceeds figure if sold.
Written by Ugo Candido · Last updated May 17, 2026.