STR vs LTR vs MTR Calculator
Side-by-Side Comparison
| Metric | STR | LTR | MTR |
|---|---|---|---|
| Annual Revenue | $43,890.00 | $33,600.00 | $33,600.00 |
| Annual Expenses | $54,200.40 | $37,068.00 | $42,384.00 |
| NOI | -$10,310.40 | -$3,468.00 | -$8,784.00 |
| After-Tax Return | -$10,310.40 | -$3,468.00 | -$8,784.00 |
| 5-Year Total | -$66,552.00 | -$17,340.00 | -$58,920.00 |
This calculator compares three rental strategies for the same property — short-term (STR, like Airbnb), mid-term (MTR, 30+ day furnished stays), and long-term (LTR, annual leases) — and ranks them by five-year after-tax return. It models STR revenue with seasonal occupancy across spring, summer, fall, and winter, applies strategy-specific expense profiles, and even reflects the STR tax advantage of active income that avoids the 3.8% net investment income tax.
Formula
STR revenue = nightly × Σ (seasonDays × seasonOccupancy); After-tax = NOI − NOI × effectiveRate
- seasonDays
- Days per season: spring 92, summer 92, fall 91, winter 90
- seasonOccupancy
- Occupancy fraction for that season (percent ÷ 100)
- NOI
- Annual revenue − annual expenses (including the full mortgage) for the strategy
- effectiveRate
- Your bracket for active STR income; bracket + 3.8% NIIT for passive LTR/MTR income
How it works
- Enter the monthly mortgage payment plus each strategy's revenue drivers: the STR nightly rate and per-season occupancy, the LTR monthly rent, and the MTR monthly rate and occupancy.
- Set management fee percentages, the furnished setup cost, your tax bracket, and whether you materially participate in the STR (which makes it active income rather than passive).
- The tool computes annual revenue, applies expense models (STR carries cleaning, platform, utility, and STR-insurance loads; LTR is leaner with a vacancy allowance), nets out an after-tax return per strategy, projects five years, and names the winner.
Worked example
A $400,000 property with an $1,800/mo mortgage: STR at $250/night (65/85/60/50% seasonal occupancy), LTR at $2,400/mo, MTR at $3,200/mo and 85% occupancy, 24% bracket, material STR participation, $12,000 furnishing, no management fees.
- STR revenue = 250 × (92×0.65 + 92×0.85 + 91×0.60 + 90×0.50) = $59,400.
- STR expenses = mortgage $21,600 + 13% cleaning/supplies + 3% platform + 15%/5%/8% of mortgage for utilities/insurance/maintenance ≈ $37,152, so NOI ≈ $22,248.
- As active income (material participation), STR after-tax = 22,248 − 24% × 22,248 ≈ $16,908; five-year = 16,908 × 5 − 12,000 ≈ $72,542.
- LTR revenue $28,800 → NOI ≈ $3,816 → after-tax ≈ $2,755 (five-year ≈ $13,776); MTR five-year ≈ $6,368.
STR wins with about $72,542 over five years versus roughly $13,776 for LTR and $6,368 for MTR, driven by higher revenue and active-income tax treatment.
Frequently asked questions
- What is the short-term rental tax loophole?
- If you materially participate in an STR with an average guest stay of seven days or less, the IRS can treat the income as active rather than passive. This calculator reflects that by applying your ordinary bracket to STR income while adding the 3.8% net investment income tax to passive LTR and MTR income.
- How is seasonal occupancy modeled?
- STR revenue is computed quarter by quarter using days per season (92 spring, 92 summer, 91 fall, 90 winter) multiplied by each season's occupancy rate and the nightly rate. This captures the summer peaks and winter lulls that a flat annual occupancy would hide.
- Why are STR expenses higher than LTR expenses?
- Short-term rentals carry turnover costs that long-term leases do not: cleaning and supplies, platform fees, higher utilities and STR-specific insurance, and more frequent maintenance. The model loads roughly 16% of revenue plus mortgage-proportional operating costs onto the STR, while LTR mainly adds a vacancy allowance.
- Does the five-year total include appreciation or principal paydown?
- No. The five-year figure is the sum of annual after-tax operating returns minus furnishing setup cost for STR and MTR. It excludes property appreciation, loan principal paydown, and selling costs, so treat it as an operating-cash comparison rather than a total return.