The honest answer is that gross revenue is the least useful number in this business, and it is the only one most people quote. What matters is what reaches your account after the full expense stack, and that gap is larger than new owners expect.
What the properties we underwrite actually produce
Internal averages across markets we buy in, expressed as monthly gross revenue against average purchase price:
- Sevierville and Pigeon Forge, Tennessee: roughly $16,200 monthly on a $975,000 average.
- Scottsdale, Arizona: roughly $15,400 on $1.15 million.
- Destin, Florida: roughly $13,500 on $895,000.
- Broken Bow, Oklahoma: roughly $9,200 on $495,000.
- Branson, Missouri: roughly $8,400 on $465,000.
- Johnson City, Tennessee: roughly $5,900 on $385,000.
Note what those pairs show: revenue tracks price far more closely than most people assume. A property producing $16,000 a month costs roughly twice what one producing $9,000 costs. There is no market where a $400,000 property reliably produces $16,000 monthly, and any pitch suggesting otherwise deserves scrutiny.
The stack between gross and net
- Platform fees on every booking.
- Cleaning, which is per turnover, not a percentage. A property with sixty turnovers has a very different cost base than one with twenty five at the same revenue.
- Management or co-host fees, commonly fifteen to twenty five percent of gross for full service and materially less for a co-host.
- Utilities, internet, and streaming, all higher than a long term rental because you pay them year round for a property with heavy guest use.
- Insurance, written for short-term rental use, which in coastal markets is one of the largest line items. See the insurance guide.
- Property tax, at the post sale reassessed value.
- Supplies and consumables, which scale with turnovers.
- Maintenance and replacement, at short-term rental wear rates, which are faster than long term rental rates.
- Debt service, which does not care about your occupancy.
Revenue is the easy half of the question
We model revenue and the full expense stack on every deal, because what an owner keeps is a different number from what a listing earns.
Apply NowWhat owners actually keep
Cash-on-cash return is the honest measure: annual pre tax cash flow divided by total cash invested including down payment, closing costs, furnishing, and reserves. Across the markets we underwrite, the ranges we model run from roughly 11 to 21 percent depending on market, basis, and management structure.
That range is wide for a reason. The same property under full service management at twenty percent of gross and under a co-host arrangement produces materially different net figures, which is why the management decision is an investment decision and not just an operational one. See co-hosting versus self managing and how to calculate cash-on-cash correctly.
Year one is not year three
A new listing has no reviews, no ranking history, and no repeat guests. First year performance typically lands below the stabilized comparable set, which is why underwriting year one at comparable performance is one of the most common modeling errors we see. See revenue projections that hold up.
The number that changes the arithmetic
For high income owners, the cash flow figure is not the whole return. A short-term rental that clears the seven day average period of customer use test with material participation, paired with a cost segregation study, can produce a first year deduction commonly in the range of 25 to 35 percent of purchase price reclassified into shorter recovery periods.
For a household at top marginal rates, that first year tax effect frequently exceeds several years of cash flow. It happens once, it depends entirely on individual facts, and it is why the same property is a different investment for two different buyers. See the complete STR tax savings guide and our partner firm's material on short-term rental tax strategy.
My BnB Accelerator, LLC is a real estate acquisition firm, not a CPA firm, and nothing here is tax advice. Figures are internal underwriting averages, not guarantees. Our tax partner is AE Tax Advisors, an independent firm.
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Frequently asked questions
How much does an Airbnb make per month?
It tracks purchase price more closely than most people expect. In our underwriting, a $975,000 Smokies cabin averages roughly $16,200 monthly, a $495,000 Broken Bow cabin roughly $9,200, and a $385,000 Johnson City property roughly $5,900. There is no market where a low basis property reliably produces high basis revenue.
What is a realistic cash-on-cash return on a short-term rental?
Across the markets we underwrite, modeled ranges run from roughly 11 to 21 percent depending on market, basis, and management structure. The management decision alone moves the figure substantially, since full service management commonly costs fifteen to twenty five percent of gross.
What expenses reduce Airbnb income?
Platform fees, cleaning charged per turnover rather than as a percentage, management or co-host fees, year round utilities and internet, insurance written for short-term rental use, property tax at the reassessed value, supplies, maintenance at short-term rental wear rates, and debt service.
Does the first year underperform?
Typically yes. A new listing has no reviews, no ranking history, and no repeat guests, so first year performance usually lands below the stabilized comparable set. Underwriting year one at comparable performance is one of the most common modeling errors.