If you manage vacation rentals, you’ve probably asked yourself the same question over and over: are short term rentals profitable today – and will they still be a good bet in 2026?
The truth is: there’s no universal answer. Short term rentals can outperform long-term lets by a wide margin, but only if you run them as a real business, not as a side hobby. That means understanding your numbers, reading the market, and using technology to scale your revenue without burning all your time at each check-in.
In this article, we’ll walk through:
- How to decide if short term rentals are actually profitable in your case
- The current market landscape and what to expect by 2026
- How to measure profitability with clear metrics
- Practical strategies to increase revenue, including upselling with Chekin
Are short term rentals profitable? Key factors to evaluate
For many owners, the problem starts here: they look at the nightly rate and the calendar and think, “It’s full, so it must be profitable.”
But as a professional vacation rental manager, you know better. Profitability is about net results, not just the top line.
Look beyond nightly rate: profit, not just revenue
When you ask “are short term rentals profitable?”, you need to compare:
- Gross income
- Nightly rate x nights booked
- Cleaning fees
- Extra services (parking, pets, experiences, etc.)
vs.
- Operating costs
- Cleaning and laundry
- Maintenance and replacements
- Utilities and internet
- Channel commissions and payment fees
- Staff time or management fees
- Licenses, tourism taxes, legal reporting
What matters is your Net Operating Income (NOI):
NOI = Total income – Operating expenses (before mortgage and taxes)
A property with high revenue but also high operational friction (manual check-ins, chaotic communication, constant problems) can end up being less profitable than a smaller but well-automated rental.
Location, demand and regulation
Profitability also depends on three external factors:
- Location & demand type
- Urban business destinations: more stable occupancy year-round, strong midweek demand.
- Leisure destinations: high rates in season, but big drops off-season.
- Secondary or rural markets: can be attractive, but usually need stronger marketing and targeted offers.
- Regulation
- Registration requirements, caps on nights per year, mandatory guest reporting, tourism taxes…
- Each new rule can add manual workload if you don’t have the right tech stack.
- Competition level
- More supply means more pressure on price and guest experience.
- To stay profitable, you need to differentiate and offer a smoother journey than “just another Airbnb”.
How to measure profitability of your short term rentals
To answer “are short term rentals profitable for me?”, you need a simple framework and a few core metrics.
Step 1: Calculate your Net Operating Income (NOI)
Start with one property and a 12-month period:
- Add up all income:
- Nightly revenue
- Cleaning fees you keep
- Extra services and upsells
- Subtract all operating expenses:
- Cleaning, laundry, consumables
- Utilities, subscriptions, insurance
- Channel commissions, payment gateways
- Staff, external management or virtual assistants
- Licensing costs, tourist tax admin, legal reporting tools
The result is your NOI. This is the real “engine” behind profitability.
Step 2: Track occupancy, ADR and RevPAR
To understand performance, track:
- Occupancy rate = booked nights / available nights
- ADR (Average Daily Rate) = total room revenue / booked nights
- RevPAR (Revenue per Available Rental) = total room revenue / available nights
These three metrics help you see if you are:
- Over-discounting (high occupancy but low ADR)
- Over-pricing (low occupancy, high ADR)
- Reaching the sweet spot (good balance → strong RevPAR)
Step 3: Compute ROI and payback period
For investors, the key question is: how long until my investment pays back?
Two simple metrics:
- Annual ROI ROI (%) = (Annual NOI / Total investment) x 100
- Payback period Payback (years) = Total investment / Annual NOI
If you’re considering renovating, adding another unit or changing location, these numbers will guide you better than any “gut feeling”.
The current landscape and what to expect by 2026
Short term rentals have matured a lot in the last few years. Looking ahead to 2026, some clear trends are shaping profitability.
More professional competition
Large property managers, hotel brands entering the apartment space and institutional investors bring:
- Professional revenue management
- Strong marketing budgets
- Standardized operations
For independent managers, this means:
- Competing only on price is increasingly risky
- The differentiator is experience + efficiency, not just a nice listing
Tighter regulation and higher compliance demands
Many destinations are:
- Limiting the number of rental days per year
- Requiring guest registration and data reporting to authorities
- Enforcing tourism tax collection and remittance
- Increasing inspections on safety and identity verification
All of this can either eat into your time and margins, or become a competitive advantage if you automate it.
This is exactly where a platform like Chekin helps: one flow to collect guest data, verify IDs, handle legal reporting, manage tourist taxes and enable smart access – reducing manual work per reservation.
Guests expect a digital, frictionless experience
By 2026, “digital by default” won’t be a bonus; it will be the minimum:
- Online check-in from mobile
- Clear information before arrival
- Smart locks or codes – no waiting at reception
- Personalised offers (early check-in, late check-out, local extras)
The better your guest journey, the better your reviews → the higher your occupancy and ability to charge premium rates.
Read more about:
Early Check-in and Late check-out
Strategies to increase revenue and protect margins
Even in a more competitive landscape, you can still make your short term rentals highly profitable. The key is to work on both sides: more revenue per booking and lower operational cost.
Smart pricing and stay rules
- Use dynamic pricing tools to adjust rates by demand, events, lead time and length of stay.
- Implement minimum stays strategically:
- Longer stays in low season to reduce changeover costs.
- Short stays with higher rates in high demand periods.
- Play with fences (non-refundable rates, advance purchase discounts, last-minute deals) to capture different guest segments.
Reduce operational friction with automation
Manual operations kill profitability. Every time your team spends 20 minutes coordinating a check-in, chasing IDs or correcting a legal report, your margins shrink.
Automate as much as possible:
- Online check-in and guest data collection
- ID verification and liveness detection, where required
- Automatic legal reporting to police or local authorities
- Tourist tax calculation and charges
- Smart access (codes, app-based access, time-limited keys)
- Scheduled messages for each phase of the stay
Chekin centralizes these workflows in a single platform, so you can manage more properties and reservations without multiplying your staff costs.
Upselling and ancillary revenue with Chekin
Another powerful way to answer “are short term rentals profitable?” with a yes is to increase revenue per stay through upselling.
From the same online check-in flow, Chekin lets you offer:
- Early check-in and late check-out
- Parking spots
- Airport transfers
- Breakfast or welcome packs
- Local experiences and activities
- Premium amenities (better linens, baby packs, pet fees, etc.)
Benefits for your business:
- Higher RevPAR and revenue per guest without increasing acquisition costs
- More control over your margins (many upsells have high profit %)
- Better guest satisfaction, because they can customize their stay in a few taps
And because these offers are automated and integrated in the digital journey, your team is not manually “selling” every time – yet you’re monetizing more of each reservation.
Checklist: is your short term rental truly profitable?
Use this quick checklist to evaluate your current situation:
- Do you know your NOI per property for the last 12 months?
- Are you tracking occupancy, ADR and RevPAR consistently?
- Have you compared your ROI and payback period with alternative investments?
- Is your operation still dependent on manual check-ins and paperwork?
- Are you compliant with guest registration, ID verification and tourist tax rules in your destination?
- Are you offering upsells (early check-in, extras, experiences) in an automated way?
- Could you manage more units with your current team – or are you already at your operational limit?
If you answer “no” to several of these questions, your rentals may still be generating revenue, but you’re likely leaving profit on the table.
Conclusion: from “are short term rentals profitable?” to “how profitable can they be?”
Short term rentals can absolutely be profitable in 2026 and beyond – often more than traditional long-term lets. But profitability is no longer guaranteed by simply listing on one OTA and waiting for bookings.
You need to:
- Understand and monitor your key metrics (NOI, ROI, occupancy, ADR, RevPAR)
- Adapt to a market with more professional competition and tighter regulations
- Build a smooth, digital guest journey that converts better and earns stronger reviews
- Increase revenue per booking through smart upselling
- Reduce operational costs with automation wherever possible
Platforms like Chekin help you do exactly that: automate online check-in, ID verification, legal reporting, smart access, tourist taxes and upsells – so you can scale your portfolio, stay compliant and boost your profitability without adding more manual work.
In the end, the right question is not just “are short term rentals profitable?” but “how can I make my short term rentals as profitable as possible while keeping my operations lean and compliant?”
Discover how Chekin can help you automate check-in, stay compliant, protect your property, and boost revenue—saving 87% of your time and earning more from every booking.
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