Short-let vs long-let calculator
A short-let in a typical UK city needs roughly 58.2% occupancy to beat a long-let tenancy. On the figures below — £120 a night at 62% occupancy against £1,300 a month of rent — short-letting nets £13,352 and the tenancy nets £12,168, so short-letting wins by £1,184 a year. That is about 10% more, for considerably more work.
Below 58.2% occupancy the tenancy is ahead. Equivalently, a landlord would need £1,427 a month on a long let to match this short-let income — for a fraction of the work.
The formula
Both strategies are reduced to one comparable number: net income per year, after the costs that each strategy actually carries. Short lets earn per night and pay for cleaning, platform fees and their own utilities. Long lets earn per month and pay an agent, absorb void periods, and hand the utility bills to the tenant.
The last line is the one that actually settles the argument. Rearranging the short-let equation to find the occupancy at which the two net the same amount gives you a single threshold to test your market against — on the defaults that threshold is 58.2%.
Worked example
The same two-bed city flat, run two ways. These are the numbers pre-filled in the calculator above.
Note how the headline gap collapses. Short-letting brings in £27,156against the tenancy’s £15,600 — 74% more revenue, which is the number that gets quoted in every “switch to Airbnb” article. After costs the advantage is £1,184, or 10%. Put the other way round: a landlord would only need £1,427 a month — £127 above the assumed rent — to match the short let with none of the operational work.
How this is calculated
Questions about short-let vs long-let
At what occupancy does short-letting beat a long let?
On the defaults here, 58.2%. Below that the tenancy nets more; above it the short let pulls ahead, and every additional point of occupancy is worth roughly £315 a year. The threshold is specific to your numbers — a higher nightly rate drags it down, higher fixed costs or a stronger local rent push it up — but for mainstream UK city flats it tends to land somewhere in the 55–65% band. That is uncomfortably close to what those markets actually achieve, which is exactly why the decision is genuinely marginal for most properties rather than the obvious win it is usually presented as.
Why is the short-let advantage smaller than people expect?
Because the comparison people carry in their heads is short-let gross against long-let net. Here the short let takes 74% more revenue but keeps only 10% more profit. Three things eat the difference: commission and cleaning scale with every booking, the property sits empty for 138.7 nights a year and still costs money on each of them, and the short let pays its own utilities and council tax, which a tenant would otherwise cover.
None of that makes short-letting a bad idea. It makes it a business rather than an investment — the returns are real, but they are earned rather than collected.
Does this account for the extra work?
No, and you should price it in yourself before deciding. A managed short let still means guest queries, review management, pricing decisions, restocking and dealing with the occasional bad stay; self-managing is a part-time job. If the calculator says short-letting wins by £1,184 a year and you expect to spend four hours a week on it, that is roughly £6 an hour before tax. Some people find that excellent and some find it insulting, but it is a much better basis for the decision than the annual figure alone.
What about mortgage, insurance and tax differences?
They can be decisive, and they are not in this calculation. A standard buy-to-let mortgage frequently prohibits short-letting outright, so the switch may require a different — usually more expensive — product, and standard landlord insurance rarely covers paying guests. On tax, UK furnished holiday letting lost its separate privileged regime from April 2025, which removed the mortgage-interest and capital-allowance advantages short lets used to enjoy over ordinary lettings. Leaseholders should also check the lease itself: many prohibit lettings under six months regardless of what the numbers say. Confirm all of this with a broker and an accountant before committing — none of it is advice, and it moves the answer more than a few points of occupancy do.
What if my city limits short lets?
Then the comparison may already be settled for you. London’s 90-night annual cap on entire-home short lets without planning permission places a hard ceiling of about 25% occupancy on a compliant listing, far below the 58.2% threshold above — which is why compliant London whole-flat short-letting rarely beats a tenancy on the numbers. Scotland requires a licence everywhere and operates control zones; a growing number of English councils are consulting on similar rules. Check your market before you model it: our short-let rules pages cover the position city by city.
Which strategy is less risky?
The long let, clearly. Its income is contracted and predictable, its costs are known, and its main risks are void periods and non-payment. Short-let income is seasonal, sensitive to competitor supply, exposed to a regulatory change that can arrive with little notice, and dependent on continuing to rank well on a platform you don’t control. The short let’s £1,184 advantage here is the premium you are being paid for carrying that risk and doing that work — judge whether it is enough, and use the break-even calculator to see how much cushion you have before a soft season turns the answer negative.
Use real market numbers
This comparison is only as good as the nightly rate, occupancy and local rent you type in — and the first two are where buyers go wrong, because city averages hide big street-level differences. A HostPal Invest report measures achieved rate, real occupancy and regulation risk for one address or an area you draw, so the comparison rests on data rather than hope.