Long-term rental vs Airbnb: when does STR actually make more money?

Category: Pricing & Revenue

By: Ryan Tanaka

Posted: 2026-01-17T04:39:53.061Z

I own a 2BR condo that I'm currently renting to a long-term tenant for $1,800/month. Lease expires in 3 months and I'm considering switching to Airbnb. Comparable Airbnb listings in my area (Charlotte, NC) seem to be getting $140-165/night. That's potentially $4,200-4,950/month at 100% occupancy. But obviously no one gets 100%. When does the math actually favor STR over long-term? What occupancy rate do I need to actually make more money?

Reply by Nolan Peters:

Great question. Here's the honest math framework: **Long-term tenant baseline:** - Gross: $1,800/month = $21,600/year - Expenses: PM fee if applicable ($180), maintenance ($100/mo), vacancy 1 month/year ($1,800) - Net: ~$17,220/year - Time investment: ~2 hours/month **STR scenario (realistic):** Let's use $150/night average: - At 50% occupancy: $2,250/month gross - At 60% occupancy: $2,700/month gross - At 70% occupancy: $3,150/month gross - At 80% occupancy: $3,600/month gross STR expenses (monthly): - Cleaning (assume turnover every 3 nights at $100): ~$1,000/mo at 70% occ - Utilities (host pays): $250 - Supplies: $50 - Platform fees (3%): ~$95 - Insurance: $100 - Software: $45 - Maintenance reserve: $160 - **Total STR expenses: ~$1,700/month** **Break-even calculation:** You match your LTR net income ($17,220/year = $1,435/month net) when: Revenue - $1,700 expenses = $1,435 → Revenue = $3,135/month → **70% occupancy at $150/night** **So you need 70% average occupancy at $150/night to MATCH your LTR income.** Above 70%, STR wins. Below 70%, you're making LESS while doing 10x the work. **Charlotte market reality:** Average STR occupancy in Charlotte is 62-68% depending on neighborhood. So it's borderline. **My recommendation:** STR makes clear financial sense when: - The STR-to-LTR revenue ratio is 2.5x or higher (your case: ~$3,600 / $1,800 = 2.0x — marginal) - You're in a high-tourism market with consistent demand - You enjoy the management aspect (or will automate it) At 2.0x, the juice may not be worth the squeeze. If your nightly rate were $180+ (common in uptown Charlotte or NoDa), the math gets much better.

Reply by Daniel Kowalski:

One thing missing from the pure math: **risk profile.** Long-term rental risks: - Bad tenant (eviction process can take months + lost rent + damage) - Below-market rent (long-term tenants lock in rates) - One income stream (if they stop paying, $0 income) STR risks: - Seasonality (bad months can be really bad) - Regulation changes (city could restrict STR) - Higher wear and tear - Many income streams (diversified across 10-20 guests/month) - More management overhead I converted 3 of my 5 rental properties from LTR to STR. The 2 I kept as LTR are the ones where the STR math was marginal (like your situation) or the property type wasn't ideal for STR (no parking, shared walls, etc.). Also consider a **hybrid approach:** Airbnb for 6-8 months during peak season, 30+ day rental during slow season. Some hosts get the best of both worlds this way.