Rental Income Index: LTR vs. STR by Market

On this page

• Is LTR or STR income higher in your market?
• Check whether the STR comparison is eligible
• Find the authority that governs your address
• What each index row will tell you
• LTR vs. STR income by market
• How LTR income is measured
• How STR income is measured
• When the answer is neither path yet
• What costs does each path actually carry?
• Run the low, base, and high model
• How reliable is each index row?
• Which landlord situation are you in?
• What to do after you find your market
• Choosing landlord and host tools at a glance
• Rental Income Index FAQs
• Verify one input, then rerun the comparison

Is LTR or STR income higher in your market?

The short answer: neither operating model wins everywhere, some properties should take neither path yet, and the comparison is decided before the arithmetic. Short-term rental use has to be legal and permitted at the specific address — city, county, and state rules, HOA or condo restrictions, lease, lender, and insurer — because an ineligible use has no income to compare. Where both paths are open, the Rental Income Index compares them at net operating income (NOI) before debt: property-level operating income after operating expenses, before mortgage payments and before income tax. The current release of the Index is the methodology, the eligibility gates, and the verified jurisdiction router below; market income rows are added market by market as each one passes the publication gates, and none has cleared them yet. On the illustrative three-bedroom house worked below — a hypothetical, not a market observation — the short-term path finishes $10,587 behind the long-term path in the low case and $7,168 ahead in the high case, and almost the whole gap is occupancy and nightly rate.

What works today: the eligibility check, the jurisdiction router that names who decides at your address, and the worked low, base, and high model with its published arithmetic. Your first action is to confirm your market's public and private gates, then replace the model's least certain input with a property-specific number. The index compares the two paths only when the comparison is honest — the same market boundary, the same property type, bedroom count, capacity, and quality band, and the same period on both sides, measured at the same income layer. For the broader question of which operating path fits your goals and tolerance for hospitality work, compare the operating paths — this page supplies the market math.

Where to start:

• Start with the long-term path if you cannot commit regular weekly hours to guest communication and turnovers, your building or market restricts short stays, or you want one lease and one tenant rather than a hospitality operation.
• Model the short-term path only if every public and private layer — city, county, state, HOA or condo, lease, lender, and insurer — permits the use in writing, and you can reliably staff or outsource cleaning and guest operations.
• Choose neither yet if any legality, tenancy, HOA or condo, lender, insurance, or data gate below is unresolved. An unpermitted or uninsured short-term rental is not an income strategy.
• Bring in a professional when the local ordinance is ambiguous for your property type or a tenant is in place (real-estate attorney), your tax picture involves mixed personal use, substantial guest services, entities, or multiple states (CPA or qualified tax professional), or your insurer will not confirm coverage for the intended use in writing (licensed insurance professional).

Check whether the STR comparison is eligible

Before reading any market figure — here or anywhere — run the Seven-Gate Eligibility Check below for your specific address. The index applies these gates to every market row before a value can publish; you apply them to your property before a value can matter. A platform listing is never proof that short-term rental use is legal at an address, and state law is not proof of a city's or county's rules: the strictest applicable layer, public or private, controls. For what each regulatory layer typically covers and how to locate your governing authority, see short-term rental regulations.

Gate	Pass condition
1. Public-law gate	City, county, and state use, zoning, permit or registration, caps, occupancy, safety, tax, and enforcement sources are current and exact for the address.
2. Private-rule gate	HOA or condo documents, lender terms, insurer requirements, and deed or lease terms permit the intended use.
3. Occupied-unit gate	If a tenant is in place, the lease term, your state's termination and notice requirements, and any local just-cause, rent-stabilization, or relocation-assistance rule govern whether and when the unit can change use. Just cause means a tenancy can be ended only for a reason the law lists — and in some states, taking the unit out of rental housing is itself one of those listed reasons, with its own payment and notice duties.
4. Comparable-cohort gate	The LTR and STR figures share the market boundary, property type, bedrooms and capacity, quality band, and comparison period.
5. Data-rights gate	Every published input has a source, a collection or access date, a sample description, and a publication or reuse right.
6. Completeness gate	Missing values are labeled; no blank implies zero, permission, or "not applicable."
7. Reader-fit gate	The figure is a planning benchmark, not a quote, appraisal, tax conclusion, or guarantee.

A tenancy is a contract with a third party who holds statutory rights you do not control. The conversion clock starts when those obligations are satisfied, not when you decide — which is why gate 3 sits ahead of the arithmetic rather than inside it.

California shows what gate 3 costs when it applies, and it is a state rule rather than a city one. Under the Tenant Protection Act, in force since January 1, 2020 and strengthened by Senate Bill 567 on April 1, 2024, withdrawing a unit from the rental market is one of four no-fault just causes, and the Attorney General's guidance gives using the building for a purpose other than rental housing as an example of exactly that withdrawal. A no-fault termination obliges the owner to pay the tenant the equivalent of one month's rent, or to waive the final month's rent in writing, under Civil Code section 1946.2. The consequence of getting it wrong is not administrative: the same guidance states that an owner who violates the just-cause provisions can be liable for the tenant's actual damages and attorney's fees, and up to three times damages where the owner acted willfully or with oppression, fraud, or malice. The Act does not reach every unit — just cause applies after twelve months of occupancy, and housing built within the last fifteen years is among the exemptions — and many California cities and counties add their own limits on removing a unit from the rental market, along with larger relocation payments. Other states and cities have their own versions and some have none at all. California is a worked example here, not a national rule: ask your own rent board or housing department whether your unit is covered before you model anything.

If any gate fails or cannot be verified, the honest result is Blocked: do not use the row — or your own projection — for an operating decision yet. Go get the missing verification first: the ordinance or permit office for public rules, your governing documents and lender for private ones, your insurer in writing for coverage. Where the ordinance is ambiguous for your property type — a duplex classified differently from a single-family home, an accessory dwelling unit, a parcel split across zoning districts, or a unit with a tenant in it — ask the zoning authority for a written determination and bring in a real-estate attorney before you rely on your own reading. A Blocked outcome is not a detour from the analysis; it is the analysis working. The same rule governs the dataset itself: a candidate market missing a legal, license, or data-rights input publishes as Blocked, not as a number.

Find the authority that governs your address

A rental income comparison by city is only as good as the legality question underneath it, and that question is almost never answered at the state level. The table below names which level of government decides each rule class, which authority to contact, and what to ask for in writing. It applies to every U.S. address, including those not named further down this page.

Rule class	Level that governs	Authority to contact	What to ask for in writing
Whether short-term use is allowed at all	City or county zoning	Planning or zoning department	The zoning designation for the parcel and whether transient occupancy is a permitted use there
Permit, licence, or registration	City, sometimes county	Permit office, code department, or business licensing	The application, the current fee, the renewal cycle, and any cap, waitlist, or lottery
Night caps, minimum stays, occupancy limits	City	Same authority as the permit	The limit as it applies to your property class, not the citywide summary
Lodging, sales, and occupancy tax	State revenue department plus county or city tax collector	Both, separately	Your own registration and filing duty, and exactly which taxes the platform remits on your behalf
State licensing or registration	State agency	The agency itself	Whether a state licence exists, and confirmation that it does not resolve local zoning
Rent regulation, just cause, relocation, conversion	City, sometimes state	Rent board or housing department	Whether the unit is covered and what a change of use requires
Private restrictions	Not government	HOA or condo board, lender, insurer	Written confirmation that the intended use is permitted under the governing documents, loan terms, and policy

The eight markets below are the named-market set this page currently covers, listed alphabetically rather than ranked. Each links to the authority that decides whether short-term use is permitted at a specific address in that jurisdiction. The set is not exhaustive and does not claim to be; for any address outside it, the rule-class table above names the governing level and the authority type to contact. To reach that authority by name, start at your own municipality's website and look for short-term rental, zoning, and business licensing pages together rather than separately, since the three answers usually sit in different departments. Where the municipality has no such page, or the address is unincorporated, the county planning or zoning department holds the zoning answer and the county clerk or tax collector holds the registration and lodging-tax answer.

The third column carries the detail this page could verify directly against the linked authority on August 10, 2026, using the same six verification statuses the index applies to its own dataset. Three rows read Blocked, and that label is doing real work: it means the routing link is live and correct but no rule detail from it is published here, so you must read the authority yourself rather than treat this page as a summary of it. Depth is uneven across the eight markets, and saying so is more useful than pretending otherwise.

Market	Authority that decides short-term eligibility	Verified detail as of August 10, 2026
Austin, TX	Austin Development Services Code Compliance	Verified with limitation. All STR owners must be licensed by the city; the license term is two years per the city's October 2025 change statement, though other city pages still describe licensing as annual. Platforms have collected and remitted hotel occupancy tax on owners' behalf since April 1, 2025, and owners still file a quarterly report recording what each platform remitted.
Chicago, IL	Department of Business Affairs and Consumer Protection	Verified. A unit needs an approved shared housing registration number before it may be listed on a platform. Each unit registers separately, registrations renew annually, and a host approved for more than one registration also needs a Shared Housing Unit Operator License.
Denver, CO	Department of Excise and Licenses	Blocked. Routing link confirmed live; the city's licensing terms could not be machine-verified from the official source on this check. Read the licence conditions at the authority and note your own read date.
Honolulu, HI	Department of Planning and Permitting	Blocked. Routing link confirmed live; address-level eligibility, permitted zones, and the minimum-stay rule could not be verified to a primary source on this check. Use the department's own eligibility map rather than any secondary summary.
Nashville–Davidson County, TN	Metro Codes Department	Verified. Permit types are set by zoning district, with an address-level eligibility viewer. A permit expires 365 days after issue unless renewed first, cannot be transferred or assigned to another person, entity, or address, and is cancelled by a change in property ownership.
New Orleans, LA	Short Term Rental Administration, Department of Safety and Permits	Blocked. Routing link confirmed live; current residential permit conditions could not be verified to a primary source on this check, and published secondary accounts disagree. Ask the administration directly what applies to your square and property class.
San Diego, CA	Office of the City Treasurer	Verified. Four licence tiers, with separate tax registrations and right-to-occupy documentation required at application. A host may hold only one licence at a time, and the Tier 4 whole-home category in Mission Beach is allocated by waitlist and random lottery.
Scottsdale, AZ	City of Scottsdale vacation and short-term rentals	Verified. A city licence is required, with neighbour-notification and insurance conditions attached, and the city's own process guide sets out three separate registrations at three levels of government.

Two of these markets show why a single "is it legal" answer is never enough. Austin requires a city licence — two years per the city's October 2025 change statement, though other city pages still describe licensing as annual — and also tells owners that even where platforms collect and remit hotel occupancy tax on their behalf, the owner still files a quarterly report with the city recording what each platform remitted; the city further warns that from July 1, 2026 it began asking platforms to remove unlicensed properties, which turns an unfinished licence application into a revenue interruption rather than a paperwork risk. Scottsdale's own licensing process guide walks owners through three separate registrations at three levels of government — a state transaction privilege tax licence, the city licence, and county registration under Arizona statute. Neither obligation shows up in a nightly rate.

A second reason to start here rather than with a spreadsheet: permits are attached to conditions that survive the purchase. Nashville's Metro Codes rules state that a change in the ownership of a property cancels the permit, including a transfer from a person to a trust or an LLC, and that the permit cannot be transferred or assigned at all. An income model built on a permit that does not transfer is measuring a business the next owner cannot operate.

Every authority page linked above was checked on August 10, 2026. This page routes to authorities; it does not restate their rules, and permit fees, caps, and stay minimums change faster than any article. Read each rule at its source and note the date you read it.

What each index row will tell you

Every row in the index is one defined market, one comparable property cohort, and one stated period — for example, a single property type with a fixed bedroom count, capacity, and quality band, measured over the same trailing twelve months on both sides. A row shows six things: the LTR result, the STR result, the primary comparable output (NOI before debt), a confidence label, a legality status for the STR path, and a source note with its as-of date. A market value is a planning benchmark, not a property quote: your unit's rent, nightly rate, occupancy, and costs can sit anywhere inside — or outside — a published range. Treat each row as the starting inputs for the low, base, and high model below, then replace one uncertain input at a time with a property-specific value, beginning with local STR eligibility and a genuinely comparable current LTR rent.

Which income numbers are actually comparable

The index uses the Income Layer Ladder below to fix a label to each income layer, because most bad comparisons are simply two numbers from different layers.

Measure	What it is	What it is not	Who defines it	What it changes for the decision
Asking rent	Advertised LTR price	Not signed, effective, or collected rent	Listing source	A starting LTR input only
ADR and occupancy	STR revenue per booked night; booked share of available nights	Not a monthly income figure	Data provider or platform definitions	Not directly comparable to monthly rent
Gross booking value	Guest charges before fees, costs, and taxes	Not money you receive	Platform	Never comparable to any net figure
Host payout	Booking value after platform deductions	Not income after operating costs	Platform	Still gross-side; not NOI
Effective gross income	Income after vacancy, concessions, or booking adjustments	Not profit	Rental Income HQ editorial definition	The first comparable gross layer
NOI before debt	Effective income minus operating expenses	Not cash flow, and not a forecast	Rental Income HQ editorial definition	The index's comparable output
Pre-tax cash flow after debt	NOI minus the owner's debt service	Not a market metric	Owner-specific input	Decision-relevant for you; never used to compare markets
Owner economic return including time	Cash flow minus valued owner hours	Not an audited figure	Reader-set assumption	Makes STR labor visible

Only figures from the same layer are comparable, and the index never compares STR gross booking value with LTR net operating income. Any field whose definition cannot be tied to its source is labeled Not verified rather than approximated.

This is where the index parts company with most of the published corpus, and the divergence is worth naming rather than leaving implied. Competing pages routinely answer "how much more does a short-term rental earn" with a single national multiple. One current example: a vacation-rental management company publishes a national figure of 30 to 80 percent more gross revenue for short-term rentals, with a net advantage of 20 to 35 percent after expenses, accessed August 10, 2026. The index does not adopt that figure, and the reason is method rather than a disagreement about direction: the page states no property cohort behind either range, no measurement period, and no sample, and it sets a gross-revenue range beside a net range without defining the net measure. Each of those gaps moves an answer more than the answer itself. Where an outside source discloses its cohort, layer, period, and sample, the index will cite it and say so.

LTR vs. STR income by market

Rental Income Index dataset status as of August 10, 2026.

Dataset status as of August 10, 2026: the verification statuses, the router above, and the publication rules below are the current release. Market income rows publish here only after every input passes the publication gates, and no market row currently meets that gate.

As rows publish, every market carries the same fields, so any two rows can be read the same way:

Row section	What it shows
Market and cohort	All applicable jurisdiction levels, the exact market boundary, property type, bedrooms and capacity, quality band, comparison period, and currency and units
Legality and private rules	Public-law status — permitted, prohibited, conditional, or unresolved — with the governing authority and its source; permit or registration name, fee, and renewal; lodging and occupancy taxes and who remits them; HOA or condo, lender, and insurance status, each verified or explicitly marked unknown
LTR result	The rent basis used (asking or signed and effective), vacancy and concessions, effective gross income, and NOI before debt
STR result	The available-night and occupancy definitions used, the ADR basis including cleaning-fee treatment, effective operating income, and NOI before debt
Comparison outputs	The NOI difference or range, break-even occupancy, break-even ADR, and the confidence label
Provenance	Source type and identifier, license or reuse right, collection date, sample size and coverage, missing-value notes, verification status, and next review date

The publication rules are strict on purpose. Only rows whose material fields are Verified or Verified with limitation enter the comparison; Partial and Blocked rows display their status and are excluded from any comparative language. Rows are ordered alphabetically or geographically — never as a "best markets" ranking, because a ranking built on modeled NOI under stated assumptions would inevitably be quoted without the assumptions. Values publish as medians with ranges where the licensed source and sample permit; a single point figure is never presented as typical. A blank cell never means zero, no rule, or permission — every missing value states what is missing and why. Each release will ship as accessible HTML with a matching CSV under one shared version identifier (pattern RII-v1.0-YYYY-MM-DD), plus an update log recording what changed, which rows were affected, and the next review date.

The first market-row release targets roughly ten U.S. markets mixing urban, suburban, and destination contexts, each with one consistent property cohort — subject to evidence completeness, with no market added merely to reach a count. Current market observations will come from licensed commercial or official sources, and the index publishes no proprietary values without documented publication rights; unresolved rights are one reason a candidate market can remain Blocked. In the meantime, the method is not waiting on the data: take your least certain decisive input and replace it with a property-specific value in the worked model below.

How LTR income is measured

The first decision on the long-term side is the rent basis, because "market rent" is several different numbers. Asking rent is an advertised price; signed or effective rent reflects executed leases and concessions; collected rent exists only where actual property accounting exists. The index states which basis each row uses and never treats one as another.

Official benchmarks are context, not substitutes for current cohort-matched rent. The Census Bureau's American Community Survey publishes median gross rent, where gross rent is defined as contract rent plus the estimated average monthly cost of utilities and fuels paid by the renter; the published figure, such as ACS table B25064, is a survey estimate carrying a stated estimate year and margin of error, and it lags the current market. HUD's Fair Market Rents are program benchmarks — generally set near the 40th percentile of gross rents for standard-quality units to administer HUD programs — not asking-rent quotes for a specific property. Where a row shows either figure, it is labeled a benchmark with its year, never presented as what your unit rents for today.

One comparability caveat belongs on the page rather than in a methodology footnote. Beginning with 2024 data the Census Bureau raised the maximum recorded monthly contract rent to $20,000, from $10,000 for 2020 through 2023 and $4,000 before that, and advises caution when comparing contract and gross rent to earlier years in high-rent areas. Any index row whose comparison period spans that boundary will say so in the row rather than quietly reporting a trend that is partly an artifact of the cutoff.

The expense side is itemized, dated, and sourced. Vacancy and concessions are separate inputs rather than one combined haircut, and owner-paid utilities are named individually, since who pays what varies by lease and property type. Management is a percentage or fixed fee with its source. Maintenance and repair is a recurring assumption kept separate from capital improvements, and the capital reserve is shown transparently rather than hidden inside maintenance.

Turnover carries make-ready, advertising, and leasing costs at an expected lease-turnover frequency. Because deposit handling at turnover is state-specific, the row does not restate law; see security deposit rules by state for the owning matrix. Insurance and property tax enter as dated, property-assumption-labeled inputs, and any sampled quote is labeled a sample, never a market average.

For the long-term path specifically: the owner bears vacancy and credit risk but hands off day-to-day occupancy management to a single tenant under a single contract. The legal exposure it creates is landlord-tenant law — habitability, notice, entry, deposit handling, and termination — which is set by state statute and often modified by city ordinance. The model does not cover appreciation, tax shield, principal paydown, or the option value of selling with the unit vacant. Before committing, confirm three things in writing: the signed rent your comparables actually achieved rather than their asking price, whether your city requires a long-term rental registration or inspection, and what your insurer needs to move the property from an owner-occupied policy to a landlord or dwelling policy. Revisit the comparison when the lease comes up for renewal, when the rent basis in your row changes, or when a local rent-regulation or registration rule is enacted. Not ideal for an owner whose carrying cost needs the higher ceiling a strong short-term market can produce, who can reliably staff or outsource turnovers, and whose address clears every gate. Evidence confidence: the rent-basis and benchmark treatment here is verified against Census and HUD documentation; the cost figures in the worked example are illustrative and unverified by design.

How STR income is measured

How occupancy and ADR are defined, and why sources disagree

Short-term revenue metrics are only as good as their definitions, and definitions differ by provider. Available nights are the nights genuinely open to book under the source's definition, with owner-blocked nights disclosed and handled explicitly — a listing blocked half the year at "80 percent occupancy" is a different business from one open year-round at the same rate. Occupancy is booked nights divided by that stated available-night denominator, so two sources can report different occupancy for the same market simply by counting nights differently. ADR is revenue per booked night under the provider's definition, and providers differ on whether guest-paid cleaning fees are included in ADR and revenue. The index does not blend definitions: as market rows publish, each row names the licensed source and links its exact metric methodology.

What Airbnb's fee structure does to your model

The gross-to-net path matters just as much. Gross booking value is guest charges before deductions, with taxes scoped separately. Host payout is what remains after the platform's defined deductions — and whether cleaning and service fees pass through depends on the fee model. Airbnb, for example, documents two fee structures as of August 10, 2026: a split fee, under which most hosts pay 3 percent of the booking subtotal (4 percent for listings in Brazil and Mexico) while the guest pays a separate service fee of 14.1 to 16.5 percent, and a single fee deducted entirely from the host payout, which most hosts pay at 15.5 percent, with remaining hosts typically at 14 to 16 percent and 16 percent for listings in Brazil and Mexico.

The consequential detail is who gets to choose. Airbnb's documentation states that the single fee is mandatory for certain hosts, including those who use property management software, and that the split-fee structure will no longer be available to certain hosts, who migrate to the single fee. Adopting a management tool can therefore change the platform-fee line before it changes anything else — a difference of roughly twelve percentage points of the booking subtotal, deducted before any of the savings the tool was bought for. Model the fee structure you will actually be on, not the one you are on today, and record each row's actual fee structure and date rather than assuming one universal rate.

Cleaning is two fields, not one: guest-paid cleaning revenue and the actual cost of each turnover. Average stay length drives cleaning frequency, so two listings with identical occupancy can have very different cleaning economics. Seasonality is why the index uses full annual periods — one strong month annualized is a projection error, not a result. Utilities, internet, supplies, and linens are annualized from dated assumptions, since short-term guests rarely pay any of them.

Why platform tax collection is not tax compliance

Platform tax collection never establishes that every tax, registration, or return is handled. Collection and remittance scope varies by tax, jurisdiction, and booking channel, and registration and filing duties can remain with the owner — as Austin's quarterly filing requirement above shows in one named market. The index stores each row's tax cost and verification fields and routes the explanation to Airbnb taxes explained. Owner hours are tracked by task with a reader-chosen hourly value and shown outside NOI, so hospitality labor is a visible number rather than a free input.

For the short-term path specifically: the owner bears both the work and the regulatory risk, continuously, and vacancy is repriced every night rather than once a year. The legal exposure it creates is a permit, registration, safety, occupancy, and multi-level tax obligation with residual owner liability, plus enforcement and penalty risk — and where a tenant is in place, the termination and just-cause obligations in gate 3. The model does not cover appreciation, tax shield, principal paydown, or the value of personal use of the property. Before committing, confirm three things in writing: whether a permit is available for your property class at your address and whether it survives a sale or transfer, which taxes you must register and file for yourself regardless of what the platform remits, and whether your insurer will cover transient occupancy at the limits your permit requires. Revisit the comparison at any ordinance or tax change, at permit renewal, at a platform fee-structure migration, when cleaning or management costs move more than about 15 percent, or after two consecutive quarters below your base-case break-even occupancy. Not ideal for an owner who cannot commit weekly hours or reliably buy them, who needs predictable monthly income, or who could not absorb an ordinance or permit change part-way through a year. Evidence confidence: platform fee structures are verified against Airbnb's own documentation as of August 10, 2026, and permit and tax rules are verified per named market only, three of the eight markets above being Blocked; the cost figures in the worked example are illustrative and unverified by design.

When the answer is neither path yet

Neither yet is a status with a defined exit, not a refusal to answer. It means the property is held without a new use committed while at least one of the seven gates is unresolved, and the exit condition is a verification rather than a date. It belongs in the comparison as a third option because for a large share of readers it is the correct one, and because pricing it honestly is the only way to know whether waiting is cheaper than being wrong.

The owner bears this one alone and immediately. There is no tenant and no guest to share the timeline, the work is administrative rather than operational — obtaining determinations, governing documents, and written positions — and the risk is that the wait ends in a no. On cost basis it is the only position in this article with no revenue side: mortgage, property tax, insurance, utilities, and minimum maintenance run at full rate against zero effective gross income. Price the wait in months against your own carrying cost, using the same expense lines the model below already carries.

What choosing it changes is the shape of the question. It converts an income problem into an evidence problem, and it moves the cost of being wrong from an operating loss to a carrying cost. The legal exposure it removes is the expensive kind: unpermitted operation and its penalties, breach of a lease, covenant, or loan term, a coverage denial for a use the insurer never underwrote, and — where a tenant is in place — an unlawful or premature termination and the damages that follow it. What it does not cover is strategy. It resolves eligibility, not whether you should own the property at all.

Before committing to the wait, confirm three things in writing: the zoning determination for your parcel and property class from the planning or zoning authority, the HOA, condominium, lease, and lender position on the intended use, and your insurer's written position on that use at the limits any permit would require. Then ask four questions: what specifically is unresolved and who resolves it, what the stated processing time is and whether it binds the authority, whether a variance, appeal, or waiver path exists and what it costs, and what your own carrying cost per month is while this runs.

Evidence confidence for this option is high as a decision rule and does not depend on any dataset row: it follows from the Seven-Gate Eligibility Check rather than from market data. Revisit it the moment the last open gate returns a written answer — or the moment carrying cost over the expected remaining wait exceeds the NOI gap the model shows between the two operating paths, at which point the honest comparison has become hold versus sell rather than long-term versus short-term. Neither yet is not ideal for one owner in particular: the owner whose carrying cost cannot absorb the wait. That owner needs the hold, improve, or sell conversation now, not after the determination arrives.

What costs does each path actually carry?

The comparison happens at NOI before debt because that is where the two cost structures actually diverge. A gross-side gap between the paths can narrow, hold, or invert once each side carries its own full cost stack. The index therefore compares no gross figures at all. The Two-Wing Cost Stack is organized the same way in every row:

Cost layer	LTR treatment	STR treatment
Shared property costs	Property tax, insurance, maintenance, and a capital reserve; the insurance product is a landlord or dwelling policy	Same categories with STR-appropriate products, such as an STR endorsement or commercial coverage, from dated quotes
Income adjustments	Vacancy and concessions, as separate dated inputs	Unbooked nights already captured in occupancy; discounts and refunds deducted separately
Turnover	Make-ready, advertising, and leasing at lease-turnover frequency	Cleaning expense, supplies, and linens at per-stay frequency
Utilities and connectivity	Often tenant-paid; each row states which are owner-paid	Typically owner-paid, including internet
Management and software	Management percentage or fixed fee; where the owner self-manages, the market rate is still carried, as an explicit opportunity cost	Management, pricing, and messaging software plus platform and payment fees
Use-specific costs	Rental licensing or registration where the jurisdiction requires it for long-term rentals	Permit, registration, and inspection fees; lodging and occupancy taxes the owner remits; furnishing and replacement amortization, with the one-time cash outlay disclosed separately
Kept out of NOI	Debt service, income tax, and owner time — shown as separate layers	The same three layers, shown separately

Three rules keep the stack honest. First, sampled premiums, management rates, and cleaning quotes are labeled samples with their property and date assumptions; they are never promoted to market averages. Second, income tax is never deducted inside NOI — the index reports operating results, not tax outcomes. The operating-expense categories are consistent with the federal rental framework in IRS Publication 527 (2025), the current revision as of August 10, 2026, but mixed personal use, substantial guest services, depreciation, losses, entities, or multistate operation belong with a qualified tax professional, not a market table. Third, debt service is shown separately so the market comparison is not distorted by one owner's financing; your rate and leverage change your cash flow, not the market's operating economics.

Above those layers sits owner economic return including time: pre-tax cash flow after debt minus your hours multiplied by your chosen hourly value. It is explicitly a reader-set assumption, and it is the layer where a short-term operation that "makes more" while consuming ten unpaid hours a week finally has to say so in numbers.

Run the low, base, and high model

The model below is complete and works today with your own inputs. Every formula is published here rather than hidden inside a tool, and low, base, and high cases are required, not optional.

Gather these inputs, each with its source and date: comparable LTR monthly rent; vacancy and concessions; STR available nights, occupancy, and nightly rate with its cleaning-fee basis stated; platform and payment fees; guest-paid cleaning revenue and actual per-turnover cost; utilities and internet; management and software; maintenance and turnover reserve; insurance; property taxes, permits, and licenses; furnishing and startup amortization; owner hours and your hourly value; and, optionally, your debt service, entered separately.

Output	Formula
LTR gross scheduled income	Comparable monthly rent × 12
LTR effective gross income	Gross scheduled income − vacancy loss − concessions + other operating income
LTR NOI before debt	Effective gross income − owner-paid operating expenses
STR occupied nights	Available nights × occupancy rate
STR booking revenue	Occupied nights × nightly rate, with cleaning and mandatory fees in separately labeled fields
STR effective operating income	Booking revenue + owner-collected fees − discounts and refunds − platform and payment fees
STR NOI before debt	Effective operating income − cleaning expense − utilities − supplies − management − software − maintenance and reserve − insurance − owner-paid permits and taxes − furnishing amortization
Pre-tax cash flow after debt	NOI before debt − debt service, only when you enter property-specific debt
Owner economic return including time	Cash flow after debt − (owner hours × your chosen hourly value)
Break-even occupancy	The occupancy at which STR NOI equals LTR NOI under the full fixed and variable cost model
Break-even ADR	The nightly rate at which STR NOI equals LTR NOI at your chosen occupancy and stay-length assumptions

Run three cases every time. Set the low case with conservative occupancy and rate and the full cost stack; set the high case with strong but sourced values, never aspiration. Work in annual figures with monthly equivalents, keep rounding consistent, and read the break-evens as thresholds: break-even occupancy is not nightly rate times 365 — it solves the full cost model, including the costs that scale with each stay. Every output is an estimate on your stated assumptions — never typical, average, or guaranteed income — and the legality, tenancy, insurance, lender, HOA or condo, and tax gates override the economics.

Worked example: one illustrative property

Every number in this example is illustrative. The inputs are a single hypothetical three-bedroom single-family house. They are not a market observation, not sourced from any market, not a benchmark, and not a Rental Income Index value. They exist to show the arithmetic end to end so you can replace every line with your own sourced figure. Both sides expense management at a market rate so the paths are comparable as investments; the self-managed variant follows the table. The STR side assumes the single platform fee structure at 15.5 percent, because the model already carries a software line. No debt is entered, so NOI before debt and cash flow after debt are the same figure here.

Long-term path	Low	Base	High
Comparable monthly rent	$2,200	$2,400	$2,600
Gross scheduled income	$26,400	$28,800	$31,200
Vacancy and concessions	−$2,112 (8%)	−$1,728 (6%)	−$1,248 (4%)
Effective gross income	$24,288	$27,072	$29,952
Management, 8% of effective gross income	−$1,943	−$2,166	−$2,396
Maintenance and repairs	−$2,000	−$1,700	−$1,400
Capital reserve	−$2,000	−$1,700	−$1,400
Turnover, annualized	−$1,200	−$900	−$700
Insurance, landlord or dwelling policy	−$1,900	−$1,600	−$1,400
Property tax	−$4,200	−$4,200	−$4,200
LTR NOI before debt	$11,045	$14,806	$18,456

Two of those lines are the ones competing pro formas most often drop. The vacancy allowance is the share of the year the unit is not producing rent, taken off gross scheduled income before any expense; the capital reserve is money set aside each year against the roof, HVAC, and appliances that will eventually need replacing, and it is kept separate from maintenance because maintenance keeps the current asset working while the reserve replaces it.

Short-term path	Low	Base	High
Available nights	350	350	350
Occupancy	45%	58%	68%
Occupied nights	157.5	203	238
Nightly rate, cleaning excluded	$215	$245	$285
Booking revenue	$33,862	$49,735	$67,830
Guest-paid cleaning revenue	$6,075	$7,830	$9,180
Platform and payment fees, 15.5%	−$6,190	−$8,923	−$11,937
STR effective operating income	$33,747	$48,642	$65,073
Cleaning expense, $115 per turnover	−$5,175	−$6,670	−$7,820
Supplies and linens	−$540	−$696	−$816
Utilities and internet	−$3,800	−$3,600	−$3,400
Management, 18% of effective operating income	−$6,074	−$8,756	−$11,713
Pricing and messaging software	−$1,800	−$1,800	−$1,800
Maintenance and repairs	−$2,600	−$2,200	−$1,900
Capital reserve	−$2,000	−$1,700	−$1,400
Insurance, STR endorsement or commercial	−$3,000	−$2,600	−$2,300
Property tax	−$4,200	−$4,200	−$4,200
Permit and registration fees	−$500	−$500	−$500
Furnishing amortization, $18,000 over 5 years	−$3,600	−$3,600	−$3,600
STR NOI before debt	$458	$12,320	$25,624

Occupied nights are carried unrounded, so 45 percent of 350 available nights is 157.5 rather than 158. That is deliberate: the stay count, the guest-paid cleaning revenue, and the cleaning expense all derive from the same number, and rounding the nights first would break the low case by roughly $100.

Result, NOI before debt	Low	Base	High
Long-term path	$11,045	$14,806	$18,456
Short-term path	$458	$12,320	$25,624
Short-term minus long-term	−$10,587	−$2,486	+$7,168

Other stated assumptions: average stay 3.5 nights, guest-paid cleaning charged at $135 per stay against a $115 cost, and 350 available nights rather than 365 to allow for owner blocks and maintenance days.

One line drives the entire gap. Short-term booking revenue moves $33,968 between the low and high cases — more than four times the $7,411 swing in the whole long-term result. Occupancy and nightly rate together decide this comparison; every other line is second order. That is also why the low case matters more than the high one: it is the case that tells you what happens when the two inputs you are least able to verify both come in soft.

Two thresholds follow from the base-case cost structure. At the base nightly rate, short-term NOI matches long-term NOI at roughly 62 percent occupancy — about 218 of the 350 available nights. At the base occupancy of 58 percent, the two paths match at a nightly rate of about $263. If your own low case favors the long-term path and only your high case favors the short-term path, the inputs separating them are the ones to verify next, not the ones to celebrate.

The self-managed variant changes the picture again. Adding back the management fee and subtracting owner hours at a chosen $30 per hour — 50 hours a year on the long-term path, 300 on the short-term path — gives an owner economic return including time of $11,488 low, $15,472 base, and $19,352 high on the long-term path, against −$2,468, $12,076, and $28,337 on the short-term path. Self-managing does not simply add the management fee back to the short-term side; it adds roughly 250 hours of work a year, and whether that trade is worth taking is a judgment the arithmetic can inform but not make. Change the hourly value and the answer changes with it. The input is exposed for that reason rather than fixed at an editorial default.

How reliable is each index row?

Every material field and row in the index carries one of six verification statuses on the Six-Status Verification Scale, and the status controls what the row is allowed to do. The same scale is applied to the eight-market router above, which is why three of its rows read Blocked.

Status	Meaning	Role in comparisons
Verified	Material fields tie to current primary or licensed sources	Enters the comparison
Verified with limitation	Sourced, with a stated boundary — for example, the local ordinance is current, but insurance and lender terms remain property-specific	Enters the comparison with the limitation shown
Partial	Some material fields are verified; others remain open	Displayed; excluded from comparative language
Blocked	A legal, license, or data-rights input cannot be confirmed	Displayed as Blocked; no values shown
Not applicable	The field does not apply to the row's cohort or jurisdiction	Stated explicitly, never left blank
Superseded	The underlying source or rule changed; a refresh is pending	Excluded until refreshed

On top of the statuses sits a confidence label — High, Medium, Low, or Blocked — reflecting completeness, recency, sample size and coverage, legal verification, and source rights. Confidence describes evidence quality, not certainty of future income: a High-confidence row means the inputs are well-sourced and current, not that your property will match the median.

Rows go stale on the schedule of their fastest-moving input: local short-term-rental ordinances and taxes at least quarterly and monthly for priority markets, market observations monthly to quarterly depending on the source, platform and provider terms at every data refresh, and federal tax context each tax year. Each row will display its own next review date so you can see whether it is current before you rely on it.

What this page is and is not: the Rental Income Index is an editorial research publication of Rental Income HQ. It is a planning and methodology resource for owners of roughly one to four units. It is not a legal, tax, insurance, lending, appraisal, or investment service, and nothing here is individualized advice about your property. The eight-market router above is a routing aid, not a substitute for reading your own ordinance. Corrections to this page can be sent to the site's corrections inbox, hello@rentalincomehq.com, and dataset changes will be recorded in the update log that ships with each release.

Which landlord situation are you in?

The paths below map the common starting positions to the option that fits, the thing that most often disqualifies it, the evidence still missing, and the next action. Find the row closest to your situation before running any numbers.

Situation	Best-fit option	Why	Not ideal when	Jurisdiction dependency	Evidence still needed	Next action
Accidental landlord, unit already vacant, no hospitality experience	Long-term path	One lease, one counterparty, no permit dependency	Carrying cost demands the higher ceiling and turnovers can be reliably outsourced	Low — state landlord-tenant law	A sourced signed comparable rent; whether the city requires long-term registration	Run the low case with a sourced signed rent; if it clears, move to the first-time landlord checklist
Converting a primary residence with a tenant still in place	Neither yet	The tenancy governs the timeline regardless of the economics	Never proceed on economics alone from this position	High, municipal and state — just cause, rent stabilization, relocation	The lease terms; whether the unit is covered; the notice period and the payment it triggers	Consult a real-estate attorney and read the lease before any model is run
Destination-market property, no tenant, short-term legality unknown	Neither yet, then model	Gate 1 controls; an ineligible use has no income to compare	Never model first	High, municipal — permit, cap, minimum stay, occupancy tax	The written zoning determination; whether a permit exists for your property class	Ask the authority in the router for a written zoning determination
Out-of-state owner, short-term use already permitted	Short-term path, conditional	Remote operation is viable if the stack carries full management	Management plus cleaning plus software exceed the NOI gap in your base case	Moderate — many permits require an in-market local contact	Two dated management quotes; whether a local-contact rule applies	Get two dated management quotes before setting the base case
Owner-occupant with occupancy-restricted financing	Neither yet	Loan occupancy terms can prohibit the use independently of local law	Never assume platform availability implies lender permission	Low for the loan, high for local rules	Written lender confirmation; the insurer's position on the intended use	Request written lender confirmation before furnishing anything
Owner of one to three long-term units weighing a conversion	Either — the model decides	Both paths are live; the gates and the cost stack resolve it	The gate fails, or only the high case favors the short-term path	High, municipal, on the short-term side only	The single input that moves your result most, sourced	Run all three cases and verify that input first
First intentional purchase, evaluating before closing	Neither yet, until transferability is confirmed	A permit attached to the seller may not survive the sale	The seller quotes gross revenue, or the permit is not verifiably transferable	High, municipal — transferability differs by city	Written confirmation on permit transferability and the gap after closing	Ask the permit authority in writing whether a permit survives a sale
Low case fails on both paths	Neither path	The property does not operate profitably at inputs you can defend	Not applicable — this is the failure path, not an option	None — the arithmetic fails before jurisdiction matters	A second sourced comparable on both sides before you accept the result	Re-examine hold, improve, or sell; this page cannot make that call for you

What to do after you find your market

Work the sequence in order, whichever wing you lean toward. First, verify the public and private gates for the actual address — ordinance and permit office, HOA or condo documents, lease, lender, and insurer in writing. Second, validate three to five property-level comparables in the same cohort and period where they exist; a market median plus your own comps beats either alone. Third, run the low, base, and high cases with your numbers and note which single input moves the result most. Fourth, choose the path checklist and execute.

On the long-term path, work through the first-time landlord checklist to move from decision to a screened tenant and signed lease. On the short-term path, start with short-term rental regulations — permits and restrictions come before furnishing, pricing, or software — then review Airbnb taxes explained so registration, collection, and filing duties are clear before the first booking. Whichever path survives your verification, how to rent out your house covers the full setup sequence from decision to first occupant.

Choosing landlord and host tools at a glance

The free and official steps come first: the eligibility gates above cost nothing beyond official fees, and no purchased tool can clear them for you. On the short-term side in particular, the legality gate precedes every pick below — software cannot create eligibility. This page names no vendors; the picks describe the documented characteristics worth shortlisting, and the linked hubs carry the named, evidenced comparisons.

• Best when any STR gate is unresolved: none yet — clear the city, county, tenancy, HOA or condo, lender, and insurance gates before paying for anything.
• Best for a self-managed long-term landlord with a few units: software with a documented free or low per-unit tier, pricing published with its unit basis, and screening with documented adverse-action support — compare options at best landlord software.
• Best for long-term tenant screening: a service with a documented applicant-consent workflow, FCRA adverse-action support, and published per-screening pricing, applied with the same written criteria for every applicant — which is what keeps screening fair-housing compliant. A growing number of states, counties, and cities also protect source of income, which makes refusing a housing voucher unlawful in those places, so check your own jurisdiction before you write your criteria. Compare at tenant screening services.
• Best for a permitted short-term host: management software with documented channel integrations and published monthly pricing that includes payment-processing costs — and confirmation of what adopting it does to your platform fee structure. Compare at best STR software, after the regulation check.
• Best for either wing on coverage: an insurer that writes landlord dwelling policies in your state — or documents a short-term rental endorsement — and will confirm the intended use in writing; see landlord insurance.

Your situation	Shortlist move	Confirm before you pay
One to three long-term units, self-managed	Long-term software with built-in screening	The price and its unit basis per month and per screening; adverse-action notice support; that the service supports written, consistently applied criteria, since screening design is a fair-housing question before it is a software question; state availability; data export if you cancel
Short-term intended, gate not yet cleared	No tools yet — verification only	Which authority governs the address; whether a permit or registration is required and its current fee; whether HOA, condo, or lease terms allow the use; whether your insurer will confirm coverage in writing
Short-term permitted, self-managed or remote	Short-term management software	Total recurring cost including payment processing; whether the tool moves you to a mandatory platform fee structure and at what rate; documented channel integrations; contract and cancellation terms; that nothing in the tool assumes a legality it cannot create
Any portfolio, either wing	Landlord or STR-endorsed insurance	Written confirmation of the intended use; state availability; exclusions and liability limits; the quote's property assumptions and date

Score any provider with the same vocabulary this page applies to data: ask for the specific pricing, availability, and contract page behind each claim, note the date, and treat anything undocumented as Not verified.

Rental Income Index FAQs

Why isn't my market in the index yet?

A market publishes only when its boundary, cohort, and period are locked, current LTR and STR sources are licensed for publication, and the official local-law and tax package is verified. Absence means "not yet verified" — not "no opportunity," and not "no restrictions." Until your market publishes, run the worked model above with your own sourced inputs; the method does not require the row.

What happens to my analysis if the ordinance changes after I start?

Assume it will. Ask your permit authority two questions in writing before you rely on any projection: whether an existing operation is grandfathered — treated as a legal nonconforming use — if the rules tighten, and whether that status survives a permit renewal, a sale, or a transfer of the property into a trust or an entity. The answers vary by jurisdiction and some are unforgiving: Nashville's rules state that a change in property ownership cancels the permit outright. Where the answer is that protection does not survive, the honest planning horizon is the permit term, not the hold period, and a real-estate attorney should review anything you are buying on the strength of an existing permit.

Why doesn't my mortgage change the market comparison?

Because your financing is yours, not the market's. The index compares markets at NOI before debt so one owner's rate or leverage cannot distort the result. Enter your own debt service in the model to see pre-tax cash flow after debt — that layer matters for your decision, but it is never used to compare markets.

Why does a platform or calculator estimate differ from the index?

Usually because it measures a different layer or cohort. Many estimates report gross booking value or host payout, blend property types, use a different available-night denominator, or fold cleaning fees into the nightly rate. Before comparing any outside estimate, identify its measure, cohort, period, and source — the index publishes those four things beside every value precisely so the comparison can be checked.

How long until the property is actually earning?

That clock is set by your slowest dependency, not an average. On a short-term path it is usually permit or registration processing, HOA or condo approval, and getting the insurance endorsement bound. On a long-term path it is make-ready work, marketing, screening, and lease execution. Where a tenant is in place, the binding constraint is the notice period, not the paperwork. Jurisdiction-specific processing times belong to official sources with dates, so the index states them only per market row — never as a universal figure.

How much more does a short-term rental earn than a long-term rental?

There is no honest universal number, and this page publishes no market figure until a market's row passes its gates. Mind the layer: STR gross booking value is guest charges before fees, operating costs, and taxes — gross is not net, and a list price is never the total cost. The figures that circulate in host-income content are almost always gross booking value quoted without occupancy, cost stack, or period, and the check takes ten seconds: ask which of the eight income layers above the number belongs to, and what period it covers. A figure that cannot answer both is marketing, whoever published it. The comparable measure is NOI before debt. The worked example above shows the same illustrative property landing $10,587 behind on the long-term path in the low case and $7,168 ahead in the high case, which is the honest shape of the answer: a range that straddles zero and is decided by occupancy and rate. For how gross host revenue figures circulate and what they leave out, see how much do Airbnb hosts make.

Verify one input, then rerun the comparison

Treat the comparison as a loop, not a verdict. Pick the single most uncertain input that could flip your result — for most owners that is local STR eligibility or a genuinely comparable current LTR rent — verify it against its governing source, and run the low, base, and high cases again. Repeat until the inputs that decide the outcome are the ones you have actually confirmed.

Two endings are legitimate and neither is a failure of the method. If neither path clears your cost stack at any rent or rate you can defend with sourced comparables, the answer is that this property does not operate profitably right now; hold, improve, or sell are decisions this page cannot make for you, but it will not pretend the numbers say otherwise. And if a tenant is in place, the sequence starts with counsel and the lease, not with the model.

As market rows publish, note the dataset version and next review date on any row you use, and recheck before acting if the row is past its date. The path that survives verified inputs — long-term, short-term, or neither yet — is the answer this page exists to produce.

Sources and last verified date

Last verified: August 10, 2026 Next review: on or before November 10, 2026, or immediately on a material ordinance, tax, or platform-terms change, whichever comes first.

• Publication 527, Residential Rental Property (2025) — Internal Revenue Service — federal rental income, expense, and reporting categories used as tax context; confirmed the current revision, for use in preparing 2025 returns; not individualized tax guidance.
• The Tenant Protection Act: Your Obligations as a Landlord or Property Manager — California Department of Justice, Office of the Attorney General — the four no-fault just causes including withdrawal from the rental market, the one-month relocation payment, the twelve-month and fifteen-year exemptions, local overlays, and the damages and attorney's-fee exposure for violations.
• Civil Code section 1946.2 — California Legislative Information — the statutory text of California's just-cause termination and relocation-assistance requirements.
• Fair Market Rents — HUD USER, U.S. Department of Housing and Urban Development — Fair Market Rent definition and its treatment as a program benchmark set near the 40th percentile of gross rents rather than a property-level rent quote.
• Gross rent, definition note — U.S. Census Bureau — official definition of gross rent as contract rent plus estimated renter-paid utilities and fuels, and the survey-estimate and sampling-error context for American Community Survey figures.
• Change to Monthly Contract Rent Estimates, ACS user note — U.S. Census Bureau — the 2024 processing change raising the maximum recorded contract rent and the resulting caution on year-over-year gross rent comparisons.
• Short-Term Rentals — Austin Development Services, City of Austin — Austin's licensing requirement (a two-year term per the city's October 2025 change statement, still described as annual elsewhere on the city's pages), the April 1, 2025 platform collect-and-remit obligation, the owner's continuing quarterly hotel occupancy tax report, and the July 1, 2026 start of platform removal requests for unlicensed properties.
• Shared Housing Registration — Department of Business Affairs and Consumer Protection, City of Chicago — Chicago's requirement for an approved registration number before listing, per-unit registration, annual renewal, and the operator licence for hosts with more than one registration.
• Short-term rentals — Department of Excise and Licenses, City and County of Denver — Denver short-term rental licence application and renewal authority; routing destination only, licence detail not machine-verifiable on this check.
• Short-Term Rentals — Department of Planning and Permitting, City and County of Honolulu — Honolulu registration authority and address-level eligibility resources; routing destination only, rule detail not verified on this check.
• Short Term Rental Property — Metro Codes Department, Nashville and Davidson County — Nashville permit types by zoning district and the address-level permit eligibility viewer.
• Short Term Rental Property Operation Rules and Requirements — Metro Codes Department, Nashville and Davidson County — the 365-day permit term, the bar on transfer or assignment, and the rule that a change in property ownership, including transfer to a trust or LLC, cancels an existing permit.
• Short Term Rental Administration — Department of Safety and Permits, City of New Orleans — New Orleans permit administration for Orleans Parish; routing destination only, current permit conditions not verified on this check.
• Short-Term Residential Occupancy — Office of the City Treasurer, City of San Diego — San Diego's four licence tiers, the separate tax registrations required at application, the one-licence-per-host limit, and the Tier 4 Mission Beach waitlist and lottery.
• Vacation and Short-Term Rentals — City of Scottsdale — Scottsdale city licence requirement and the neighbour-notification and insurance conditions attached to it.
• Short-Term/Vacation Rental Licensing Process Guide — City of Scottsdale — the three separate state, city, and county registrations required before a Scottsdale property may be rented.
• Airbnb service fees — Airbnb Help Center — split-fee and single-fee structures, host and guest fee rates, the geographies that differ, and the categories of host for whom the single fee is mandatory, as of August 10, 2026.
• Airbnb vs. Long-Term Rental profitability comparison — Awning — the national gross-revenue and net-advantage ranges cited in this article as a disclosed rejected source, accessed August 10, 2026; published by a vacation-rental management company and used only to document the methodological conflict, never as evidence of any figure.