What nightly rate do I need to break even on my Airbnb?

The basics

The break-even rate is the lowest nightly price that covers everything the rental costs you in a month, at the number of nights you expect to book. Below it, each month loses money. Above it, the rental starts to earn.

This is a floor, not a pricing recommendation. What you can actually charge depends on demand in your market, the season and how your listing compares with others.

The formula

1. Stays per month = booked nights ÷ average stay length.
2. Monthly costs = fixed costs + stays × turnover cost + booked nights × per-night cost + target profit.
3. Cleaning fee net = stays × cleaning fee × (1 − fee rate), if the platform fee applies to cleaning. If it does not, leave out the (1 − fee rate) part.
4. Minimum nightly rate = (monthly costs − cleaning fee net) ÷ (booked nights × (1 − fee rate)).

Round the result up to the next cent so it always covers your costs.

Fixed costs are what you pay whether or not anyone books: mortgage or rent, insurance, internet, software and utilities that don't change much. Turnover cost is cleaner pay, laundry and restock per stay. Per-night cost is what each occupied night adds, such as extra power, water and consumables.

A worked example

Hypothetical numbers for one rental:

Step by step:

1. Stays: 18 ÷ 3 = 6 stays.
2. Turnovers: 6 × $110 = $660.
3. Per-night costs: 18 × $12 = $216.
4. Monthly costs: $1,800 + $660 + $216 + $0 = $2,676.
5. Cleaning fee net: 6 × $120 × 0.845 = $608.40.
6. Needed from nightly rates: $2,676 − $608.40 = $2,067.60.
7. Net share of booked nights: 18 × 0.845 = 15.21.
8. Minimum rate: $2,067.60 ÷ 15.21 = $135.9369, rounded up to $135.94.

Check: 18 nights at $135.94 is $2,446.92. Add $720 in cleaning fees for a total of $3,166.92. A 15.5% fee takes $490.87, which leaves $2,676.05. That covers the $2,676 in costs.

How booked nights change the answer

Fixed costs spread over fewer nights push the floor up. Same example, with 3-night average stays:

This is why a slow month can feel so different from a busy one. Your break-even rate is not one number for the year. Work it out for a slow, typical and busy month.

Adding a target profit

Break-even means you make nothing. To see the rate that leaves you something, add a monthly target to your costs. In the example, a $500 target raises monthly costs to $3,176, and the minimum rate becomes $168.81.

What the number tells you

• If your market rate is well above it, you have room for slow periods and price drops.
• If it's close, small changes in occupancy or costs can tip the month into a loss.
• If it's above what similar listings charge, look at your fixed costs, your cleaning fee and your minimum stay before you count on higher prices.

To see what a single booking leaves you, use the stay profit calculator. For setting the cleaning fee itself, see how much to charge for a cleaning fee. The break-even rate calculator runs the full formula with your numbers.