The Real Costs of Running an Airbnb (That No One Talks About)

You’ve seen the dramatic headlines and posts online: “Airbnb is DEAD”.

But the truth is the market isn’t broken. The real reason some hosts never see high profits is that they never understood what it truly costs to run an Airbnb in the first place.  

If your Airbnb looks profitable on paper but your bank account tells a different story, you’re not alone. Most new hosts overlook the sneaky (but very real) expenses that slowly eat into their margins.

So let’s fix that.

In this guide, we’re breaking down the real costs of running a short-term rental. Now you can plan smarter and create a high-profit listing.

Real Estate Budgets: Short-Term Rentals vs Long-Term Rentals

Sure, short-term rentals (STRs) promise higher income than long-term rentals. But they also come with more expenses and responsibility.

With a long-term rental, tenants usually cover utilities, handle minor repairs and bring their own furniture. You collect rent monthly and deal with maintenance as needed.

But with STRs, you're running a mini hotel.

As the host, you cover everything: utilities, internet, landscaping, cleaning, repairs and furniture replacements. And every little item that magically disappears with guests—like wine glasses, batteries, and remote controls.

STR expenses aren’t just higher—they’re more variable. That’s why understanding the full financial picture is critical before you buy, launch, or scale.

Ready to dive in?

Fixed Costs: The Ones You Can’t Escape

No matter how many bookings you get, these bills show up every month; they usually don’t change month-to-month.

Mortgage (PITI)

Buying a property for your Airbnb? Your Principal, Interest, Taxes, and Insurance are the foundation of your financial commitment.

For a $500,000 property, expect this to hover around $3,500/month. This will depend on your interest rate, insurance and loan period.

HOA Fees (If Applicable)

Some properties have no Home Owners Association fees. Others come with steep monthly fees or surprise assessments.

If you can, avoid buying properties with an HOA to cut down expenses (and unnecessary drama).

Capital Expenditures (CapEx)

These are the big-ticket repairs: roofs, water heaters, HVAC and appliances. Budget 1% of the property value every year to handle these without panic.

Be prepared, the AC doesn’t care if it’s not in the budget.

Maintenance

While technically variable, it's smart to treat maintenance as a fixed expense.

Short-term rentals experience way more wear and tear than long-term rentals. Budget 3–5% of monthly revenue to keep things in working order and guests happy.

Variable Costs: The Silent Profit Killers

These fluctuate based on occupancy, season, location and guest behavior. They’re also very easy to underestimate.

Utilities

You’re footing the bill for water, gas, electricity, and internet. And STR guests aren’t known for energy efficiency.

Expect high usage, especially in extreme seasons. If it’s summer and your guest cranks the AC to 65°F throughout the day, that $500 bill is coming your way.

Budget 15–20% of gross income, then adjust when you have more data.

Your utility costs will also depend on the size of your property and the amenities you offer.

Cleaning

Even if guests pay the Airbnb cleaning fee, you still pay your cleaners upfront.

A high turnover property might run around $1500 in cleaning alone. This will depend on how much you pay your cleaning crew, and the number of bookings or average length of stay.

If you’re looking to cut costs, look elsewhere. Your cleaners' pay is the most important expense in your business. Pay them well. Great cleaners lead to great ratings and more bookings.

Restocking & Supplies

Toilet paper, coffee pods, trash bags, soap, batteries and welcome gifts—the list never ends. Budget around $75 per room every month to keep things stocked.

Not sure what to buy? Download our FREE Airbnb shopping list to make setup and budgeting easier.

OTA Platform Fees

Airbnb takes 3%, Vrbo takes 8%. Most hosts get 80% of their bookings from Airbnb and the rest from platforms like VRBO. To simplify things, you can budget 4% of gross revenue for platform fees.

Refunds

Even great hosts get hit with refund requests. A lukewarm hot tub, a noisy neighbor, a missing remote...all reasons guests might ask for a refund.

Budget $50–$100/month just in case. If your refund expenses are running high, there might be a bigger problem you need to address.

Hot Tub & Pool Maintenance

Hot tubs and pools are high maintenance, but they can also give your revenue a huge boost.

Expect to pay $150–$300/month, depending on location, usage and how often you clean.

Management Fees (Optional)

If you're not self-managing, expect to pay 10–20% of your income to a property manager or co-host.

Startup Costs For New Airbnb Hosts

Key expenses you’ll need to budget for if you’re starting a new Airbnb.

• Furniture & Decor: $15K–$40K depending on property size and design goals.
• Smart Home Upgrades: Smart locks, thermostats, security systems.
• Photography & Branding: Professional images are a must for scroll-stopping stays.
• Legal & Licensing: Local permits, STR licenses, and zoning compliance costs.

A full Airbnb setup can run $20K– $60K+ before you even go live.

Want to stand out on the feed and get booked? Investing in unique design and staging can boost your nightly rate and occupancy by up to 50%.

Creating a Budget for Your Unique STR

An affordable property in a great location can look like a win. But after you factor in sneaky expenses like CapEx, refunds and cleaning fees—it might be a money pit in disguise.

And that’s the trap so many new hosts fall into.

Unique stays, like glamping units or container homes, can have their own unexpected expenses. Research the stay you’re creating and plan for any other costs that may come up for your specific property.

How to Avoid Airbnb Budget Regret

Here’s your action plan:

✅ Build a detailed expense budget before buying or launching.

✅ Budget for both fixed and variable costs—add the costs unique to your listing and location, too.

✅ Use tools like AirDNA for accurate revenue forecasts.

✅ Start small and self-manage if you’re new.

✅ Track your numbers monthly—and adjust your budget often.

✅ Download our free Airbnb Analysis Spreadsheet to run your numbers like a pro.

Final Thought: Know the Game You’re Playing

Short-term rentals can be wildly profitable. But only if you treat them like a business and budget like a boss.

So before you launch your dream Airbnb, check that it’s backed by real math, not just hope.

Create a proper budget. Run the numbers. And build a business that’s worth your time and money.

Need some help analyzing a property before you invest?

Download our free Airbnb Calculator spreadsheet here.