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What Occupancy Rate Does an Airbnb Need to Beat Long-Term Rent?
Written by Miles Udemezue, Commercial Director, Lettd.
There is no single occupancy figure. The honest answer is that occupancy only means something alongside nightly rate and cost base, and two properties at identical occupancy can produce completely different net income.
For a one bedroom flat in Milton Keynes, the break-even occupancy against a long-term tenancy is roughly 45% at £90 a night, roughly 58% at £70 a night, and roughly 81% at £50 a night. The lower your nightly rate, the more of the year you have to be full simply to stand still.
Here is the full working, the formula for your own property, and why targeting an occupancy number is usually the wrong thing to do.
Why occupancy is the wrong target
A property that is 97% occupied can earn less than the same property at 81% occupied. This is not theoretical.
A four bedroom house in MK6 that Lettd manages ran at 97% occupancy in May 2026 at an average nightly rate of £134.16, generating £4,024.90. In July, occupancy was deliberately allowed to fall to 81% while the average nightly rate rose to £239.07. Revenue was £6,974.35.
Sixteen points of occupancy were given up. Revenue rose by £2,949.45.
Two things drove that. July is peak season in Milton Keynes, so some of the rate increase was the market. But the rest was a pricing decision: refusing bookings at May rates during a period when the property could command far more. A manager targeting occupancy would have taken those bookings and earned less.
Occupancy is easy to measure and easy to boast about, which is why it appears in so much marketing. It tells you how busy a property is, not how well it is doing.
The right metric
Revenue per available night. Total revenue divided by the number of nights the property was available, whether or not it was booked.
In the example above, revenue per available night went from roughly £130 in May to roughly £225 in July. That is the number that moved. Occupancy went backwards while performance went sharply forwards.
If you only track one figure, track this one.
The break-even formula
To beat a long-term tenancy, short let net income has to exceed long let net income. Both need calculating properly.
Long-term net. Take the gross rent, deduct letting agent fees if managed (typically 10% to 15%), and deduct a void allowance of at least one month a year. That lands at roughly 80% of gross rent. For a one bedroom Milton Keynes property at the ONS average of £974 a month, that is about £800.
Short-let net. Take total gross booking revenue, including cleaning fees charged to guests, and deduct:
Platform fee, roughly 15% of the total including the cleaning fee
Management commission, as a percentage of gross
Fixed monthly management fee
Actual cleaning cost per turnover, multiplied by turnovers
Consumables
Set the two equal and solve for the gross revenue you need.
Worked example: a one bedroom flat in Milton Keynes
Assumptions, all stated so you can change them:
Input | Value |
|---|---|
Long-term rent (ONS, Milton Keynes, one bed, June 2026) | £974 |
Long-term net after agent fee and voids | £800 |
Platform fee | 15% of gross |
Management commission | 5% of gross |
Fixed management fee | £100 per month |
Cleaning cost per turnover | £35 including linen |
Cleaning fee received from guest, after platform fee | £30 |
Turnovers per month | 9 |
Consumables | £10 per month |
Because the cleaning fee received roughly matches the cleaning cost, cleaning is close to neutral rather than a drain. That is only true if the fee is set correctly. More on that below.
On these inputs, the property needs roughly £1,531 a month in total gross revenue to match the tenancy. Stripping out the cleaning fees within that, it needs roughly £1,213 a month in accommodation revenue.
Translating that into nights:
Average nightly rate | Nights needed per month | Occupancy needed |
|---|---|---|
£50 | 24.3 | 81% |
£60 | 20.2 | 67% |
£70 | 17.3 | 58% |
£80 | 15.2 | 51% |
£90 | 13.5 | 45% |
£100 | 12.1 | 40% |
£110 | 11.0 | 37% |
£120 | 10.1 | 34% |
Read that table carefully, because it contains the most important point in this article.
At £50 a night, a one bedroom Milton Keynes flat has to be 81% occupied to earn the same net income as a long-term tenancy. Not to do better. To match it, while carrying the extra work, the income volatility, the faster wear, the setup cost and the compliance load.
At £90 a night the same property breaks even at 45% occupancy and everything above that is genuine upside.
Undercutting on nightly rate does not win in this market. It moves the property into a position where it needs to be nearly full all year to justify existing.
Worked example: a four bedroom house
The same maths, on Lettd's four bedroom MK6 property.
Input | Value |
|---|---|
Long-term rent (ONS, Milton Keynes, four-plus bed, June 2026) | £2,085 |
Long-term net after agent fee and voids | £1,710 |
Management commission | 8% of gross |
Fixed management fee | £275 per month |
Turnovers per month | 6 |
Cleaning on a four bedroom property costs between £80 and £200 per turnover, depending entirely on how it is arranged. £80 with directly engaged cleaners and owned linen. £200 with an agency and hired linen.
Cleaning arrangement | Break-even gross per month |
|---|---|
In-house cleaners, owned linen (£80) | roughly £3,234 |
Agency cleaners, hired linen (£200) | roughly £4,169 |
The cleaning arrangement alone moves the break-even by more than £900 a month. That is the same property, same guests, same rate, same occupancy. The only difference is how the turnover is resourced.
For reference, the property grossed £4,024.90 in May and £6,974.35 in July. With in-house cleaning it clears break-even in both months comfortably. With agency cleaning and hired linen, May is marginal.
This is why "what does a turnover cost at my property" is the most useful question a landlord can ask a prospective manager, and why a manager who cannot answer it precisely is telling you something.
What this means in practice
Rate matters more than occupancy. Every pound on the nightly rate flows almost entirely to the bottom line. Every additional booked night at a low rate brings a cleaning cost with it.
Length of stay matters almost as much. Nine turnovers across a near full month implies average stays of three nights or more. The same property averaging one and two night bookings would run fifteen or more turnovers at identical occupancy, adding several hundred pounds of cleaning a month for no additional revenue. The occupancy figure would look the same.
Check your cleaning fee against your cleaning cost. The maths above only works because the cleaning fee received roughly covers the cost of the clean. Remember the platform takes its percentage of the cleaning fee too, so a £35 fee returns about £30. If your listing charges £20 for a clean that costs £35, every booking loses £20 before anything else happens, and it is invisible inside a revenue figure that looks healthy.
Do not set an occupancy target. Set a revenue per available night target, and let occupancy be whatever it needs to be to achieve it.
Assumptions and limits
Every figure above depends on the inputs listed. Change the management fee, the cleaning cost, or the void allowance on the long-term side, and the answer moves.
Two limits worth stating. The long-term net of roughly 80% of gross rent assumes a fully managed tenancy with a one month annual void. A self-managing landlord with a long-standing tenant will net more than that, which raises the bar for the short let.
And the four bedroom comparison uses ONS averages for four-plus bedroom properties across Milton Keynes, which is a broad category. Your own property's achievable rent is the number to use.
Frequently asked questions
What occupancy rate does an Airbnb need to be profitable? There is no single figure, because occupancy only matters alongside nightly rate. For a one bedroom flat in Milton Keynes, break-even against a long-term tenancy is roughly 45% occupancy at £90 a night, 58% at £70 a night, and 81% at £50 a night. A lower nightly rate requires far higher occupancy to achieve the same net income.
Is 70% occupancy good for an Airbnb? It depends entirely on the nightly rate. At £100 a night, 70% occupancy on a one bedroom Milton Keynes flat comfortably beats a long-term tenancy. At £50 a night it barely clears break-even. Occupancy on its own says nothing about profitability.
What is a good revenue per available night? Revenue per available night is total revenue divided by all available nights, booked or not. It is the more useful metric because it captures rate and occupancy together. A four bedroom MK6 property Lettd manages moved from roughly £130 per available night in May 2026 to roughly £225 in July, while occupancy fell from 97% to 81%.
Should I lower my nightly rate to increase occupancy? Usually not, once a listing is established. Each additional booked night brings a cleaning cost, so low-rate nights contribute little. The exception is a brand new listing with no reviews, where pricing below steady state for the first bookings buys review volume quickly and is worth doing deliberately for a short period.
How do I calculate whether my Airbnb beats long-term rent? Calculate long-term net as gross rent less agent fees and a void allowance, roughly 80% of gross. Calculate short-let net as total gross revenue less the platform fee of around 15%, management commission, fixed management fee, actual cleaning cost per turnover, and consumables. Compare the two monthly figures rather than annual totals.
Does the cleaning fee cover the cost of cleaning? Only if it is set correctly, and the platform takes a percentage of the cleaning fee as well as the accommodation fare. A £35 cleaning fee returns roughly £30 after a 15% platform fee. If the actual turnover costs more than that, every booking loses money regardless of how good the occupancy looks.
Rent figures are from the ONS Price Index of Private Rents for Milton Keynes, June 2026. Short let figures are from Lettd's own managed portfolio and reflect a small number of properties over a limited period. Break-even calculations depend on the stated assumptions and will differ for your property. This article is general information, not financial, tax or legal advice.
