How to Calculate Your Short-Term Rental's Net Profit After Expenses and Commissions
Many owners know how much came in this month, but few know how much they actually earned. The gap is expenses and commissions, and ignoring it can make you think a unit is a success when it barely covers itself.
The basic formula
Net profit = total revenue − commissions and fees − operating expenses − fixed expenses
What to count in each item
- Total revenue: what guests actually paid you, including stay, cleaning fees and the like.
- Platform commissions and payment fees: these differ by platform and change, so read each platform's statement instead of estimating.
- Cleaning and laundry: the cost per checkout, or staff pay.
- Supplies: tissues, soap, coffee and items guests use up.
- Utilities: electricity, water, internet and gas.
- Maintenance and repairs: what you pay for breakdowns, plus a regular allowance for renewal.
- Subscriptions: your management system, pricing tools and so on.
- Rent or mortgage: if the unit is rented or financed.
- Taxes and statutory fees: according to your country's rules.
A simple example with made-up numbers
Say a unit earned 10,000 currency units in a month. Commissions and fees are 1,500, cleaning and supplies 1,200, utilities 600, maintenance 400 and rent 4,000. Net profit is 10,000 − 1,500 − 1,200 − 600 − 400 − 4,000 = 2,300, which is 23% of revenue, not 100% as some imagine.
Common calculation mistakes
- Counting revenue without deducting commissions.
- Forgetting periodic maintenance, which then appears as a surprise in one month.
- Not counting your time: if you manage it yourself, the value of your time is part of the cost.
- Mixing personal accounts with the unit's accounts.
- Comparing units by revenue rather than net profit.
How do you keep track continuously?
Record every expense when it happens, categorize it and link it to the right unit. A good sheet is enough at first, but with several units it is better done inside a PMS that holds bookings and expenses together. And remember that seasonal prices change revenue, so read seasonal pricing.
How Doorlyn helps
Doorlyn tracks bookings and expenses and shows net profit per unit, so you know which units truly earn and which need adjusting. Try it free.
Frequently asked questions
Do I count the cleaning fee the guest pays as revenue?
Yes, it is part of revenue, but the actual cost of cleaning goes into expenses.
What is a good profit margin?
There is no number that fits everyone, since it varies by city, unit type and ownership. Compare your units with each other and with your own past results.
How often should I review net profit?
At least monthly, and after each season to adjust prices and expenses.
