Short-Term Rental Break-Even Analysis: $531k Monthly Revenue

Fixed costs $22.7K/mo fixed overhead only

Contribution margin 82% after variable costs

Break-even revenue $27.7K/mo monthly target

Break-even timing Month 1 model break-even

Break-even calculator

Use this to test monthly revenue, variable costs, and fixed overhead against break-even for a short-stay rental.

Lean Base Full

Monthly revenue Revenue is the money that covers direct costs and fixed overhead. $ Low sales Peak sales Variable expenses These are direct costs that move with bookings and occupancy. $ Light costs Heavy costs

Money available to cover fixed costs $115,605 $131,814 revenue - $16,209 variable expenses

Margin ratio

88%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even must cover. $ Lean overhead High overhead

Break-even chart Revenue Total costs

Which short-term rental expenses are fixed, and which move with bookings?

Cost classification

Break-even is reliable only if the $21,500 monthly fixed overhead, the $1,200 utility base, and guest-linked percentages stay separate. Don’t load the $340,000 startup spend into monthly break-even; it belongs in cash runway.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Lease Payments	Fixed	Add $15,000 per month from Month 1 through Month 60.	Loading renovation, furniture, equipment, linens, and website spend into monthly rent.
Property Tax & Insurance	Fixed	Add $2,500 per month to the base overhead hurdle.	Treating this as a booking-linked charge when it doesn’t move with occupied nights.
PMS & Channel Manager Subscriptions	Fixed	Add $800 per month before calculating required room revenue.	Netting it against commissions instead of showing it as fixed software overhead.
Marketing Retainer	Fixed	Add $1,500 per month unless the plan ties spend directly to bookings.	Assuming every marketing dollar flexes with occupancy.
OTA Commissions	Variable	Apply 10.0% of sales in the first year, stepping down to 8.0% by the mature year.	Putting commissions in fixed overhead, which overstates break-even at low volume.
Professional Cleaning	Variable	Apply 3.0% of sales in the first year, falling to 2.2% by the mature year.	Ignoring turnover activity and spreading cleaning evenly across all rooms.
Base Utilities	Semi-variable	Include the $1,200 monthly base, then track added usage if occupied nights rise.	Treating the full utilities line as fixed even when guest use drives extra spend.
Housekeeping Staff	Semi-fixed	Step labor from 2.0 FTE in the first year to 6.0 FTE by the mature year.	Flexing payroll as a perfect revenue percentage instead of adding staff in blocks.

How does break-even change from the lean case to the base case and the full case for this Airbnb business?

Scenario table

Break-even gets easier as the mix moves from 25 rooms at 60% occupancy to 54 rooms at 82%, because revenue rises faster than fixed overhead. The real test is revenue cushion above break-even, not occupancy alone.

Planning cases only: actual occupancy, rates, and costs can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean operating case	$906k	$163k	$435k	82.0%	$308k	Positive cushion, but a small occupancy drop can hurt fast.
Base operating case	$1,894k	$297k	$615k	84.3%	$982k	Best reference point; revenue is well above break-even.
Full operating case	$3,245k	$441k	$673k	86.4%	$2,131k	Strong cushion; break-even risk stays low unless revenue slips hard.

What breaks the break-even plan if occupancy, fees, or fixed costs worsen?

Stress test

The base plan clears break-even, but the cushion tightens fast if revenue slips, commission and cleaning costs creep up, or lease and utility costs rise. A mixed hit can still stay above zero, but the room for error gets thin.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$530k	$376k cushion	Base case stays well above break-even.
Revenue shortfall	Monthly revenue drops 15% to about $770k.	$530k	$240k cushion	Still profitable, but the buffer shrinks fast.
Fixed-cost pressure	Monthly fixed overhead rises by $10k.	$543k	$363k cushion	Higher lease or utility burden lifts the floor.
Margin pressure	Contribution margin falls 3 points to 79%.	$551k	$355k cushion	Commission creep or cleaning shortages eat contribution.
Combined pressure	Revenue drops 15%, fixed overhead rises $10k, and margin falls 3 points.	$563k	$207k cushion	Still above break-even, but one more hit tightens cash.

Can this short-term rental plan really clear break-even before you sign the lease and start hiring?

Founder checklist

Test the lease against real demand, not the slide deck. The model needs about $531K in monthly revenue, while Year 1 occupancy is only 60%, so you need proof that rate, mix, and booking volume can close the gap before you commit cash, hire, or furnish.

1Revenue floor$531K/mo

Confirm the booking engine can reach this monthly revenue, because the Year 1 60% occupancy plan sits far below the implied 352% break-even occupancy.

2Monthly overhead$43.5K/mo

Add the $22.7K in fixed costs to about $20.8K in Year 1 wages, and make sure the business can carry that load before one unit is booked.

3Variable load15% variable

Verify that OTA commissions at 10% and cleaning at 3%, plus small guest-supply and F&B costs, keep variable load near 15% so each stay still covers fixed costs.

4Room mix25 units

Check that 10 studios, 8 one-beds, 5 two-beds, and 2 penthouses can be turned by the Year 1 team without late cleanings or missed check-ins.

5Cash trough$813K cash

Keep at least this reserve in hand, since the model's minimum cash lands in Month 7 even though break-even shows in Month 1.

6Occupancy gap60% to 352%

Build launch demand to move from the Year 1 60% occupancy plan toward the implied 352% break-even occupancy, or the lease is too large.