Enter the price, the loan and the nightly rate. See the cash-on-cash return, the cap rate and five years of total return.
No account needed·Free PDF report
Cash-on-cash returnExample
-0.2%Cash-on-cash returnTarget 10.0%
$149,000Total cash invested
6.17%Cap rate
Examples computed by this calculator on sample inputs. Not market data.
No account needed
Airbnb fees per Help Center article 1857
Every formula shown, sources dated
Free PDF report with every chart
How it works
Three steps. About a minute.
1
Step 1: Enter the deal
Price, down payment, loan rate and the nightly rate you expect. Every other input starts on a sensible sample you can edit.
2
Step 2: See your return
Cash-on-cash return, cap rate, the loan constant and DSCR, with a verdict on whether the loan helps or hurts.
3
Step 3: Keep the report
Download the PDF with the five-year return and a grid of returns at other rates and occupancies.
Your report
What you'll get
MagicBNB reportROI calculator · 1 of 5
Cash-on-cash returnFrom the sample
-0.2%
Cash-on-cash return
THE HEADLINE
What your cash earns in year one
Annual cash flow divided by every dollar you put in: down payment, closing and furnishing. Compare it with what the same cash earns doing nothing.
Cash-on-cash return
Total cash invested
Annual cash flow
MagicBNB reportROI calculator · 2 of 5
Debt and DSCRFrom the sample
MeasureValue
Annual debt service$26,484
Year-1 interest$23,487
Year-1 principal$2,996
NOI / debt service (DSCR)0.99
Payback on cash investedNever at this cash flow
DEBT
Whether the loan helps or hurts your return
Cap rate against the loan constant, and NOI against debt service. When the loan costs more than the property yields, borrowing lowers your return.
Cap rate and loan constant
NOI DSCR
Debt and DSCR table
MagicBNB reportROI calculator · 3 of 5
Return by yearFrom the sample
$0$1k$2k$3k$4k
$2,746
$2,975
$3,222
$3,488
$3,774
Year 1Year 2Year 3Year 4Year 5
HOLD PERIOD
Five years of cash flow, paydown and appreciation
The return split by year into cash flow, principal paydown and appreciation. Only the first reaches your account, so read it before the total.
Return by year, stacked
Year-1 return with and without appreciation
5-year return table
MagicBNB reportROI calculator · 4 of 5
Loan balance and equity by yearFrom the sample
$0$100k$200k$300k$400k
Year 1Year 2Year 3Year 4Year 5
EquityLoan balance
EXIT
What selling at the end of year 5 returns
Sale price, selling costs, loan payoff and the internal rate of return across the hold. It tells you whether the deal works once the sale is counted.
5-year IRR, with sale
Loan balance and equity by year
Net proceeds after selling costs
MagicBNB reportROI calculator · 5 of 5
Cash-on-cash by ADR and occupancyFrom the sample
ADR \ Occupancy-10 pts-5 pts0 pts
-10%-6.9%-5.0%-3.0%
-5%-5.8%-3.7%-1.6%
0%-4.6%-2.4%-0.2%
+5%-3.5%-1.1%1.2%
+10%-2.3%0.2%2.6%
SENSITIVITY
Cash-on-cash at other rates and occupancies
Moves ADR up to 10% and occupancy up to 10 points each way. Read which corner of the grid you are actually likely to land in.
Cash-on-cash by ADR and occupancy
ADR needed for your target
Your inputs at the centre
Showing part 1 of 5: Cash-on-cash
Cash-on-cash return on every dollar you put in
Cap rate and loan constant side by side
The ADR, occupancy or price your target return needs
Five years of total return, cash flow and paydown
A five-year sale case with IRR and equity multiple
What cash-on-cash return measures
From the sample
Annual cash flow
-$250
÷
Total cash invested
$149,000
=
Cash-on-cash return
-0.2%
Cash-on-cash return is the year's cash flow after the mortgage, divided by every dollar you put in before the first guest arrived.
That means the down payment, closing costs and furnishing. Leave the furniture out and the return looks better than it is, because that cash is gone either way. Principal paydown and appreciation are real, but they do not pay the bills, so this calculator reports them separately as total return.
04
ROI mistakes this calculator catches
Most inflated ROI figures come from leaving cash out of the denominator or counting equity as income.
01Leaving furnishing out of cash invested
A $400,000 purchase at 25% down is $100,000. Add $12,000 closing and $25,000 furnishing and the real base is $137,000, which cuts a 10% return to about 7.3%.
02Counting appreciation as cash
Appreciation and principal paydown build equity. Neither pays a cleaner. The report shows year-1 return with and without appreciation for that reason.
03Borrowing above the cap rate
When the loan constant is higher than the cap rate, each borrowed dollar costs more than it earns. The loan test flags it before you pick a down payment.
04Skipping the exit
A thin cash-on-cash can still be a fine deal after a sale, and a high one can be a poor one. The 5-year IRR includes selling costs.
When the loan lowers your return
From the sample
What the property earns
Cap rate
6.17%
Net operating income
$26,233
What the loan costs
The loan costs more
Loan constant
8.31%
Debt coverage
0.99
Compare two numbers. The cap rate is what the property earns on its price before any debt. The loan constant is what the loan costs each year as a share of the amount borrowed.
When the loan constant is higher, every borrowed dollar costs more than it earns, and a smaller down payment makes the return worse. The sample sits in exactly that spot. The fix is a better rate, a lower price, or more cash in the deal.
What good looks like
Set your bar before you look at listings.
OutputWeakOkayGood
Cash-on-cash returnRule of thumb used by this calculator's verdict.WeakUnder 6%Okay6% to 10%Good10% or more
NOI DSCRRule of thumb used by this calculator. Lenders set their own minimum, often between 1.0 and 1.25.WeakUnder 1.0Okay1.0 to 1.25Good1.25 or more
Cap rate against loan constantArithmetic: above means the loan raises your return.WeakCap rate belowOkayWithin 0.25 pointsGoodCap rate above
How to read your result
Cash-on-cash returnFrom the sample
Sample -0.2%
-5%6%10%20%
WeakOkayGood
The scale shows how this calculator reads the result, from weak to good. A short-term rental is a part-time job, so it should beat what the same cash earns with no work at all.
Set your bar before you look at listings. MagicBNB's Deal Analyzer keeps every analysis you save and ranks them side by side against your target return, so each new listing is judged against the last one.
How operators use it
01
Investor choosing a down payment
Can put 20% or 30% down on the same property.
Runs both, sees the loan constant sits above the cap rate, and puts more down because borrowing lowers the return.
02
Operator adding a purchase to a rental-arbitrage book
Used to judging units on monthly cash flow only.
Reads cash-on-cash and IRR side by side and sees the purchase pays mostly through equity, so plans cash reserves accordingly.
Airbnb ROI, worked through
Why is my Airbnb cash-on-cash return negative?
Because the mortgage costs more than the property earns before debt. The sample makes $26,233 of NOI, pays $26,484 on the loan, and returns -0.2% on $149,000 of cash.
Cash-on-cash divides annual cash flow by every dollar you put in. When cash flow is negative, no amount of cash invested makes the ratio positive. The fix has to come from income, price or the loan.
The 'what has to be true' table puts numbers on each fix. For a 10% return the sample needs an ADR of $351.50 at today's occupancy, or 83.9% occupancy at today's rate, or a purchase price of $276,923 on the same loan terms.
Sample purchase: $425,000, 25% down, 7.4%, 30 years
Down payment $106,250 + closing $12,750 + furnishing $30,000$149,000 invested
NOI before debt$26,233
Annual principal and interest-$26,484
Annual cash flow-$250
Cash-on-cash-$250 / $149,000 = -0.2%
What is negative leverage on a short-term rental?
When the loan's yearly cost per dollar borrowed is higher than the property's cap rate. Each borrowed dollar then earns less than it costs, so more debt lowers your return.
Compare two percentages. The cap rate is NOI over price: 6.17% on the sample. The loan constant is the yearly payment over the loan amount: 8.31% at 7.4% over 30 years. The loan costs 2.14 points more than the property yields.
Under negative leverage, putting more down raises cash-on-cash and borrowing more lowers it. That runs against the usual advice to finance as much as possible, which only holds when the cap rate is above the loan constant.
Sample deal
Cap rate$26,233 / $425,000 = 6.17%
Loan constant$26,484 / $318,750 = 8.31%
Gap2.14 points against you on every borrowed dollar
What price should I pay for a 10% cash-on-cash return on an Airbnb?
Work backwards from NOI and your loan terms. On the sample's income, a 10% return needs a price of $276,923, about 35% below the $425,000 ask.
Most buyers start with the asking price and see what return comes out. Starting from the return you want gives you an offer price instead. That number is often far from the ask, and the gap tells you whether the deal is a negotiation or a pass.
The valuation calculator builds a full offer ladder from the same idea, at several cash-on-cash and DSCR targets.
How do you calculate IRR on an Airbnb with a sale?
Take every year's cash flow plus the net proceeds of a sale at the end, against the cash you put in, and find the single yearly rate that makes them balance. The sample's 5-year IRR is -8.2%.
The sale is usually where the return is decided. With no appreciation entered, the sample sells for what it cost, pays 6% in selling costs, and repays the loan balance. Five years of principal paydown does not make up for the selling costs and the negative cash flow.
Enter an appreciation rate you can defend. If the deal only works with appreciation, you are speculating on price, and the STR income is incidental.
Total profit over the hold-$52,044, equity multiple 0.65x, IRR -8.2%
Where it fits when you buy
1
Screen the deal
Enter the asking price and your financing. If cash-on-cash is under your bar at realistic occupancy, stop here.
2
Shape the offer
Try two down payments and two rates. Keep the structure where the loan test passes and the 5-year IRR clears your target after selling costs.
3
Keep the analysis alive
Save the deal in MagicBNB's Persistent analysis + multi-turn chat and ask follow-up questions as the seller's numbers change.
Terms on this page
Cash-on-cash return
Annual cash flow divided by all the cash you put in.
Cap rate
NOI divided by the purchase price, as if you paid cash.
Loan constant
Annual debt payments divided by the loan amount.
DSCR
Debt service coverage ratio: NOI divided by annual debt payments.
IRR
Internal rate of return: one yearly rate that sums up every cash flow, including the sale.
Principal paydown
The part of each payment that reduces the loan. Equity, not cash.
Questions
How do you calculate ROI on an Airbnb?
Cash-on-cash return is the usual measure: annual cash flow after the mortgage divided by every dollar you put in, meaning down payment, closing costs and furnishing. Add the year's principal paydown, and appreciation if you want it, for total return. Keep the two apart, because only cash flow pays the bills.
What is a good cash-on-cash return for a short-term rental?
This calculator reads 10% or more as good, 6% to 10% as okay and under 6% as weak. There is no reliable published STR benchmark, so treat those lines as a starting bar. An STR takes real work, so it should beat what the same cash earns sitting in a savings account.
What is the difference between cap rate and cash-on-cash return?
Cap rate is NOI divided by price and ignores the loan. Cash-on-cash is cash flow after the loan divided by the cash you put in. When the cap rate is below the loan constant (annual debt service divided by the loan), borrowing lowers your return.
Should furnishing costs count in Airbnb ROI?
Yes. Furnishing and setup is cash you spend before the first booking, the same as the down payment. Leaving it out flatters cash-on-cash. Closing costs belong in it too.
How does the mortgage rate change Airbnb ROI?
A higher rate raises the loan payment, which comes straight out of cash flow, and raises the loan constant. Once the loan constant passes the cap rate, more borrowing lowers the return. Freddie Mac's 30-year average was 7.40% on Oct 8 2026, and DSCR loans usually price higher, so enter your own quote.
Does this ROI include appreciation?
Only if you enter it. Appreciation starts at 0% because it is not cash flow and nobody can promise it. The five-year table shows cash flow, principal paydown and appreciation as separate layers, so you can see how much of the return depends on the market going up.
What nightly rate do I need for a 10% return?
Set your target cash-on-cash and the results solve for it three ways, each with everything else held: the ADR at today's occupancy, the occupancy at today's ADR, and the highest purchase price on the same loan. If the ADR needed is far above what comparable listings get, the price is the lever to negotiate, not the rate.
How much cash do I need to buy an Airbnb?
Down payment, closing costs and furnishing, plus a reserve. On the sample's $425,000 purchase that is $149,000 before any reserve, of which $30,000 is furnishing.
Is principal paydown part of Airbnb ROI?
It is part of total return, not cash-on-cash. The sample pays down $2,996 of principal in year one, which lifts year-1 total return to 1.8% while cash-on-cash stays at -0.2%.
What is an equity multiple?
Everything you get back divided by everything you put in. Under 1.0x you lost money: the sample's 0.65x means $0.65 back for every dollar invested over five years.
Does this ROI include tax savings from depreciation?
No. ROI here is before income tax. Depreciation can turn a small cash profit into a tax loss; the tax calculator estimates that separately.
Is a 5% cash-on-cash return good for an Airbnb?
This calculator reads under 6% as weak, because an STR is a part-time job and should beat what the same cash earns with no work. Compare it with the after-tax yield you could get elsewhere.
This calculator answers once per set of inputs. MagicBNB's Persistent analysis + multi-turn chat stores each analysis with its history, so days later you can ask what a $25 higher nightly rate does and get the recalculated return without re-entering anything.
Two more places this shows up in MagicBNB
Self-consistency verificationROI, returns and payback are worked through more than one solution path, and any difference is explained.
Deal AnalyzerSaved analyses side by side, scored and ranked against your own target ROI and risk tolerance.
This is the quick look at one deal. MagicBNB runs the same numbers in depth and in real time, property by property, in Property Detail once you own it.