Airbnb vs Long-Term Let
Short-term letting platforms like Airbnb can generate significantly higher gross income than a traditional assured shorthold tenancy — in the right location and with the right property. But after platform fees, cleaning costs, higher management overhead, and occupancy risk, the net advantage is often smaller than expected. This calculator compares the annual net income from both strategies using your specific numbers.
Why this matters
Many landlords over-estimate Airbnb income by focusing on nightly rates without modelling realistic occupancy and costs. This calculator puts both strategies on the same financial footing.
Key points
- Airbnb platform fees are typically 14–16% of the booking amount
- Realistic occupancy for a non-peak London property is 60–75%; popular tourist areas can be higher
- Cleaning costs per stay add up quickly — especially for shorter bookings
- Airbnb income is taxed differently: if it qualifies as a Furnished Holiday Let, advantageous FHL rules apply
- In London, short-term letting is restricted to 90 days per year unless you have planning permission
- Mortgage lenders typically prohibit short-term letting — check your mortgage terms
Frequently asked questions
Is Airbnb income taxed the same as rental income?
Short-term letting income is generally taxed as rental income. However, if it qualifies as a Furnished Holiday Let (FHL), you benefit from FHL tax advantages: full mortgage interest deduction, capital allowances, and pension contribution eligibility. Check HMRC's FHL rules carefully.
Can I Airbnb my buy-to-let property?
Not without checking your mortgage terms — most buy-to-let mortgages prohibit short-term letting. You may need a specific holiday let mortgage. In London, short-term letting is limited to 90 nights per year without planning permission. Check local council rules elsewhere.
What is a realistic Airbnb occupancy rate?
Occupancy varies enormously by location, property, and time of year. In popular tourist areas or city centres, 70–85% is achievable with good management. In secondary locations, 50–65% is more realistic. Always model a conservative occupancy rate for the base case.
What are the Airbnb platform fees?
Airbnb charges hosts between 3% and 16% depending on the service level. The basic 'simplified pricing' model charges hosts around 14–16%. When you factor in payment processing and local taxes, the effective take rate can be higher.