How do I compare short-term and long-term rental income for a property?

How do I open the long-term rental view?

1. Run the address through the BNBCalc Calculator as a Buy or Own analysis.
2. At the top of the analysis, click the Long Term Rental card. On a phone, tap the Long Term Rental button under the grade.
3. To go back, click Short Term Rental.

Both cards show a letter grade with the Cash on Cash and Cap Rate behind it, which gives you a first read before you dig into either one. The long-term view keeps the same price, down payment, loan and property tax as the short-term one, so the price and loan stay put while the income and running costs change.

Where does the long-term rent come from?

The Annual Revenue card in the long-term view starts from the property's monthly rent estimate. A line under it shows the two estimates it draws on, such as "Zillow: $X/mo · RentRange: $Y/mo", and the next line shows RentRange's local vacancy and yearly rent growth for the area, where it has them. If Zillow has no estimate, the rent starts at the top of RentRange's range, so make sure the rent looks right for the home before you go further. In the US, a third line shows HUD's Section 8 rent for the ZIP code and bedroom count, which helps if you'd consider renting to a voucher holder.

Below it, Long Term Rental Comparables lists nearby homes listed for rent, with their rent, size, type, bedrooms, bathrooms, listing date and distance, on a map and in a table. You can hide a comp that doesn't fit, although hiding one doesn't change the rent estimate, so set the rent yourself if the comps point somewhere else. These comparables are for US properties, and rural areas sometimes have none. Outside the US there's no rent estimate at all, so type in the rent you'd expect.

What does BNBCalc assume for a long-term rental?

The long-term math is simpler than the short-term one: revenue is the rent × (1 − vacancy), the expenses come off that, and Profit (Cash Flow) is what's left after Mortgage & Taxes. Cash on cash divides that cash flow by your down payment plus any long-term renovations, and on US Buy analyses the long-term DSCR divides the rental's operating income by your principal and interest.

Make sure to change the inputs to what you'd expect for the home. A short-term rental needs furniture, cleaning and a platform fee that a long-term lease doesn't, while a long-term landlord usually leaves the utilities to the tenant, and those differences decide most comparisons.

How should I compare the two?

Compare Profit (Cash Flow) first, since both views take it after the same mortgage and property tax. Read the two Cash on Cash figures with care, because they aren't built the same way: the short-term one divides by your down payment, furnishing and closing costs and adds a year of revenue growth, while the long-term one divides by your down payment and long-term renovations only. The two cap rates are worked out differently too.

The letter grades help as a first read, but they use different weights: the Long Term Rental grade puts 30% on cap rate and 70% on cash on cash, with its own bands, so a B on one card and a B on the other don't mean the same thing. And a short-term rental's higher cash flow comes with more work and more seasonal swings, so check its Seasonality chart before you decide the extra income is worth it. For taxes, the long-term view has its own LTR Tax Calculator (USA), which uses standard depreciation over 27.5 years.