How to calculate the real return on a short-term rental
Short-term rental yield is the metric every landlord should track regularly — yet most landlords are content with knowing how much comes into their account each month without understanding whether that number is good, average, or low compared to potential. Calculating and monitoring performance precisely is the first step to improving it.
How to calculate the gross and net return
The gross return is calculated as the percentage ratio of gross annual revenue to the property's value: Gross yield = (Gross annual revenue / Property value) × 100. Example: a €200,000 property generating €15,000/year in gross revenue → a gross yield of 7.5%. The net return is more meaningful because it accounts for all costs: Net yield = (Gross revenue − OTA commissions − PM commissions − cleaning − flat-rate tax − maintenance − utilities − insurance) / Property value × 100. Typically, total operating costs account for 40–55% of gross revenue, bringing net yield to 3–5% in major urban markets and up to 7–9% in emerging destinations with lower-cost properties.
The parameters that determine performance
The three main drivers of short-term rental yields are: Employment rate — how many nights per year the property is rented. A rate of 65% vs 80% makes a difference of approximately 15 days of additional revenue per year. Average rate per night (ADR) — the Average Daily Rate. An ADR of €100 vs €80 on 200 occupied nights is worth €4,000 in annual difference. Operating costs — optimizing costs without reducing the quality of the service (negotiating better prices for cleaning, using long-lasting linen, reducing energy consumption) improves net returns without affecting revenues.
Benchmarking: how to understand if your property is performing well
To understand if the performance of your property is normal, compare it with direct competitors in the same area. Useful tools: AirDNA (Airbnb market data by area), Mashvisor, market reports from the main property management companies. If your RevPAR (Revenue Per Available Room) is 20%+ below the area average, there is room for improvement — often in pricing, advertising, or cross-platform distribution.
The parameters that determine performance and how to optimize them
Are you optimizing the performance of your property to its full potential? YouBnb analyzes the performance of your apartment for free and shows you where there is room for improvement. Request one Free Evaluation.
Content reproduced from the current YouBnB website for this preview. Figures, returns and regulatory information have not been verified or updated in this version.
