Airbnb yield calculator
A £300,000 flat let at £120 a night at 62% occupancy grosses £27,156 a year and nets £13,352 after costs — a 4.5% net yield and a 22.5-year payback. Change any number below and the answer updates as you type.
Before mortgage interest and tax. A cash purchase earning 4.5% pays for itself in 22.5 years on income alone, ignoring capital growth.
The formula
Rental yield is annual income divided by what the property cost, expressed as a percentage. Gross yield uses revenue before any costs and is the number estate agents quote. Net yield uses profit after running costs and is the only one worth making a decision on — for a short let the gap between the two is enormous, because short-letting is an operating business with cleaning, platform fees and management on top of the usual landlord costs.
Occupancy is measured against all 365 nights of the year, not against the nights you choose to list. That matters: a host who blocks the property for three months and fills every remaining night has 75% availability-occupancy but only about 56% calendar occupancy, and it is the calendar figure that pays the mortgage.
Worked example
These are the numbers the calculator above is pre-filled with — a £300,000 two-bed flat in a mid-sized UK city, run through an agency at a typical 28% of revenue.
Read that as a sentence: the flat takes £27,156 across the counter, hands £7,604 of it to the platform, the cleaner and the managing agent, spends £6,200 on the bills that arrive whether or not anyone stays, and keeps £13,352. That is 4.5% on the capital — respectable for UK property, but roughly half the 9.1% headline figure. Anyone quoting the gross number at you is quoting the number that ignores every cost of running the business.
How this is calculated
Five inputs, and here is exactly what each one means and what the calculator assumes about it.
Questions about Airbnb yields
What is a good Airbnb yield?
As a rough guide for UK short lets: below 4% net is thin, 5–8% net is a solid performer, and anything above 10% net deserves a second look at the assumptions rather than a celebration — it usually means the occupancy or nightly rate has been set optimistically, or a cost has been left out. The worked example above lands at 4.5%, which is a realistic mid-market result.
The honest benchmark is not another property, though — it is what the money would earn elsewhere at no effort. If a net yield sits below what a savings account or gilt pays, the property is only worth buying for the capital growth, and you should be explicit with yourself that that is the bet you are making.
What is the difference between gross and net yield?
Gross yield divides total revenue by the purchase price and ignores every cost. Net yield subtracts the cost of running the property first. In the example above the same flat is 9.1% gross and 4.5%net — the costs eat roughly half the return. For long lets the two figures sit much closer together, because the tenant pays the utilities and there is no cleaning or platform fee, which is why comparing a short let’s gross yield to a long let’s net yield makes short-letting look far better than it is.
Should mortgage interest be included in the yield?
Not in the yield itself. Yield describes the asset; leverage describes your position in it. Keep them separate, then work out cash-on-cash return afterwards: take the net profit here, subtract a year of mortgage interest, and divide by the cash you actually put in rather than the full price. A leveraged purchase usually shows a highercash-on-cash return than the unlevered net yield whenever the net yield beats the mortgage rate, and a rapidly worse one when it doesn’t — which is the whole risk of borrowing against a short let.
What occupancy rate should I assume?
Not the one in the brochure. Mature urban UK markets typically run somewhere in the 55–70% band across the full calendar year, with seasonal and coastal markets swinging far wider — a Cornish cottage can clear 90% in August and 20% in February and average out below a city flat. New listings also start slow: a first year rarely matches a listing with two years of reviews behind it, so it is worth modelling year one several points below the market. Rather than guess, take the real occupancy for your market from our city guides and paste it in.
Does this include stamp duty and purchase costs?
Only if you add them to the purchase price field. The calculator deliberately doesn’t apply them automatically, because the rates depend on where the property is, whether it is an additional property, and whether you are buying personally or through a company — guessing on your behalf would produce a confidently wrong number. Add your actual acquisition costs to the price and both the net yield and the payback period will reflect the true amount of capital at work.
Why is the payback period so long?
Because payback here counts rental profit only. At £13,352 a year against £300,000 of capital, the income alone needs 22.5years to return the purchase price, and that is normal for UK property — yields of 4–6% imply payback periods of 17–25 years by definition. Most of the actual return on a UK property comes from capital appreciation and from paying down a mortgage with someone else’s money, neither of which appears in a yield figure. Treat the payback number as a stress-test of the income, not as a forecast of your total return.
Get the real inputs, not assumptions
This calculator is exact — but only about the numbers you give it, and the two that decide everything are nightly rate and occupancy. Those vary street by street far more than most buyers expect. A HostPal Invest report computes the achieved rate, real occupancy and regulation risk for one specific address or an area you draw on the map, so you can put measured figures into the boxes above instead of hopeful ones.