Calculating Your Airbnb Net Yield: The Line-by-Line Method

The number that matters is neither the nightly rate nor the revenue shown by the platform: it is what you keep once everything has been paid. To compare short-term rental with a long-term lease, or two management offers with each other, you need to run the full calculation. Here is the method, line by line, along with the indicators to track every month.

Step 1: gross revenue

Gross revenue is what guests pay for the nights booked:

Gross revenue = number of nights booked × average nightly rate, plus any cleaning fees charged to guests.

Two precautions:

• count only the nights that are actually available to rent, excluding the dates you block for your own stays;
• always reason over twelve months, never over a single high-season month. In Tel Aviv, demand changes a great deal between the Jewish holidays, the summer and the winter.

Step 2: booking-related costs

These costs rise with the number of stays:

• the platform's service fees;
• the management company's fee, whether a commission or a flat fee (see how to read a management offer);
• cleaning and linen after each departure, if they are not fully covered by the cleaning fees paid by guests;
• guest amenities and consumables: soap, coffee, paper, cleaning products.

Step 3: the apartment's fixed costs

You pay these whether the apartment is rented or not:

• arnona, the municipal property tax;
• vaad bayit, the building committee fees;
• electricity, water and gas;
• internet and any TV subscriptions;
• home insurance suited to short-term rental.

Be careful when comparing: with a long-term lease, many of these costs are usually paid by the tenant. With short-term rental, they stay with you. It is one of the most frequently forgotten differences.

Step 4: maintenance and replacement

An apartment rented short-term wears out faster than one occupied by a single tenant:

• minor repairs and call-outs: plumber, electrician, air-conditioning technician;
• regular maintenance: cleaning the air-conditioning units, paint, grout and seals;
• replacing linen, bedding, tableware and small appliances.

Set aside a monthly provision rather than absorbing these expenses all at once.

Step 5: net income before tax

Net income before tax = gross revenue − booking-related costs − fixed costs − maintenance and replacement

This is the figure to compare with the net rent of a long-term lease (the rent, minus the costs that remain with the owner), or with another management offer. Tax then depends on your personal situation. Discuss it with an accountant or tax adviser familiar with both Israel and your country of residence.

The three indicators to track every month

Occupancy rate: nights booked ÷ nights available. The nights you block for yourself do not count as available.

Average nightly rate: revenue from nights ÷ nights booked.

Revenue per available night: revenue from nights ÷ nights available. This is the most useful indicator, because it combines the other two.

Why does it matter so much? Take an example with purely fictional figures. Rented 25 nights out of 30 at 100 per night, an apartment brings in 2,500. Rented 20 nights at 140, it brings in 2,800, with five fewer cleanings and less wear and tear. A high occupancy rate is therefore not a goal in itself: what counts is revenue per available night, and then net income.

The most common calculation mistakes

• Multiplying an August nightly rate by 365.
• Forgetting the nights blocked for your own use.
• Forgetting the costs a long-term tenant would pay instead of you.
• Not planning for the replacement of linen and equipment.
• Comparing gross revenue on one side with net rent on the other.

The right starting point: a realistic estimate

For gross revenue, everything depends on the apartment: neighborhood, view, floor, size, amenities, season (see the real factors behind Airbnb earnings). We prepare a personalized estimate based on comparable apartments around yours: all that is left is to apply the method above. To compare with a traditional lease, also read short-term vs. long-term rental in Tel Aviv.

👉 Get your free estimate: it only takes two minutes.