Vacation rental break-even occupancy: how many booked nights does it take?

A vacation rental breaks even when booked nights cover the whole year's costs, and the count can be higher than a revenue projection suggests. The arithmetic is short. What goes wrong is the inputs: taxes that belong to the state counted as income, platform fees left out of the payout, and owner weeks that never come off the calendar.

Below, one hypothetical condo runs from fixed costs to the booked nights it needs. Every price, rate and expense in the example is an illustration, not market data, a rental projection or a loan quote.

How many booked nights does a vacation rental need to break even?

Break-even nights are the year's fixed costs divided by what each booked night leaves after the costs that come with it. Compare that count with the nights you can actually sell. The formula has three parts:

• Fixed costs: everything you pay whether or not anyone books, such as the loan, association dues, insurance, property tax and utilities.
• Per-night contribution: the nightly rate minus platform fees, management and supplies tied to each booked night.
• Available nights: 365 minus the nights you keep for yourself and the nights the unit is closed for upkeep.

Break-even occupancy is break-even nights divided by available nights, not by 365.

Which costs are fixed and which come with each booked night?

Fixed costs arrive every month regardless of bookings, and per-night costs scale with the calendar. Sorting them correctly is most of the work. Assume a two-bedroom beach condo bought for $350,000 with 25 percent down.

The down payment is $87,500. The remaining $262,500 loan, at a hypothetical 7.25 percent fixed rate for 30 years, costs $1,790.71 a month in principal and interest, or $21,488.52 a year.

The other fixed costs, all hypothetical for this unit:

• Association dues: $6,000
• Insurance, including flood and liability: $3,600
• Property tax without a homestead exemption: $4,900
• Electricity, water, internet and streaming: $3,600
• Licenses, tax filing and bookkeeping: $600
• Reserve for replacing furniture, linens and appliances: $2,400

Those six lines add $21,100, so fixed costs total $42,588.52 a year with the loan.

Now the per-night side. Airbnb's service fee page says that under its single fee structure the entire fee is deducted from the host's payout and most hosts pay 15.5%. Its older split-fee structure, with a 3 percent host fee, is being phased out.

At a hypothetical $280 a night before taxes, the platform takes $43.40 and a manager charging 20 percent takes $56. Supplies run $12 a night. The guest's $160 cleaning fee covers the cleaner's bill, but the platform's 15.5 percent of it, $24.80, spread over a four-night average stay, adds $6.20 a night. Each booked night leaves $162.40.

We assume the platform fee applies to the cleaning fee as well as the nightly rate. Confirm how your platform calculates it. Managing the unit yourself removes the 20 percent fee, but someone still answers guests and books cleaners, so price that time honestly.

Divide $42,588.52 by $162.40 and the answer is about 262.2, so the condo needs 263 booked nights to cover the year. At $280 a night, that is $73,640 of nightly revenue before cleaning fees and guest taxes.

Why don't guest taxes count as rental revenue?

Because they belong to the state and county, not to you. The guest pays them on top of the rate, and they go out again with the tax return.

The Florida Department of Revenue puts the general state sales tax rate at 6% and says counties may add local option transient rental taxes on accommodations rented for a term of six months or less.

The Department's transient rental tax list (DR-15TDT, revised October 2026) shows Escambia and Santa Rosa at 5 percent and Okaloosa at 6 percent, each collected by the county.

Its most recent discretionary sales surtax list, for calendar year 2025, shows Escambia at 1.5 percent, with its two pieces running to 2028 and 2037, and Okaloosa at 1 percent.

Here is what those rates take from a hypothetical $280 night in three markets:

• Escambia County: On Pensacola Beach, in Escambia County, a guest's stay therefore carries 12.5 percent: 6 percent state, 1.5 percent surtax and 5 percent tourist tax. That is $35 that never becomes your revenue.
• Okaloosa County: In Destin, in Okaloosa County, the same arithmetic gives 13 percent.
• Baldwin County, Alabama: Across the state line, the City of Gulf Shores lists lodging tax at 16% in the corporate limits: 4 percent state, 2 percent Baldwin County and 10 percent city. On a $280 night that is $44.80, and the police jurisdiction total is 11 percent.

If a revenue projection quotes what guests paid, ask whether taxes are inside the figure. Our guide to short-term rental rules from Pensacola Beach to Gulf Shores lists the registrations behind each tax.

How do owner use and maintenance shrink the nights you can sell?

Every night you keep for yourself or close for repairs comes off the calendar before occupancy is measured. In this example the owner keeps 14 nights and the unit closes 10 nights for upkeep.

That leaves 341 nights to sell, and 263 booked nights is about 77.1 percent of them. Measured against the whole year, it would look like 72.1 percent, which understates the challenge.

Owner nights also matter for taxes. IRS Publication 527, the 2025 edition, says you use a dwelling unit as a home if you use it for personal purposes more than the greater of 14 days or 10% of the total days it is rented to others at a fair rental price.

At 263 rented nights, 10 percent is 26.3 days, so 14 owner nights stay under the line and 30 would cross it. Your own nights are not the only ones that count. Publication 527 treats a day as personal use when the unit is used by:

• You or any other person who owns an interest in it
• A member of your family, unless they pay a fair rental price and use the unit as their main home
• Anyone under an arrangement that lets you use some other dwelling unit
• Anyone at less than a fair rental price

The publication also says to divide your expenses between the rental use and the personal use based on the number of days used for each purpose. This is not tax advice; ask a tax professional how your own calendar falls.

What happens to break-even nights in a slower season or with no mortgage?

A lower average rate is the bigger risk: it raises the night count sharply, while removing the loan cuts it roughly in half. The table runs the same condo four ways.

A $50 drop in the average rate is about 18 percent of the nightly price, yet the per-night contribution falls from $162.40 to $130.15 and the condo needs 328 nights. That is close to every sellable night of the year.

That is why the July rate is the wrong input. A Gulf Coast calendar mixes peak weeks with long shoulder and winter stretches, so use the average rate across a full year of comparable bookings, not the summer quote.

The no-mortgage row looks comfortable, but the buyer has $350,000 tied up. Our guide to NOI, cash flow and cash-on-cash return shows how to judge the return on that money once costs are covered.

What licenses and rules belong in the budget?

In Florida, the state license comes from how often you rent. Section 509.013 of the Florida Statutes covers a unit rented to guests more than three times in a calendar year for periods of less than 30 consecutive days, or advertised as regularly rented that way.

A condo or a small house that meets that test is a vacation rental under the state lodging law, with its own license class. Budget the license, the tax registrations and any local business license, then read the association documents. A building that limits rental terms can make the whole break-even question moot.

Our condo due diligence checklist covers the documents, and Pensacola Beach buyers should also understand its leasehold structure.

What should you check before you trust a vacation rental projection?

Start with the rules for the address, because a unit that cannot rent by the night has no break-even to find. Then work through these checks in order:

1. Confirm the address allows short stays under zoning, state licensing and the association rules.
2. Rebuild fixed costs from the association budget, an insurance quote on the unit and an investor's tax bill.
3. Price the platform fee, management, supplies and the fee charged on cleaning as per-night costs.
4. Remove guest taxes from any revenue figure before you divide.
5. Subtract your own nights and upkeep days, then measure occupancy against what is left.
6. Rerun the count at a lower full-year average rate and see whether the nights still fit.

Our rental and mortgage calculators handle the loan payment, and you can search current listings on Pensacola Beach, in Destin or in Gulf Shores and Orange Beach to test real prices. If you have a unit in mind, send us the numbers and we will rebuild the break-even with you before you offer.

Sources

Sources checked November 2, 2026. The worked example uses a hypothetical price, loan rate, nightly rate and expenses; it is not a rental projection, a loan offer or tax advice.

• Airbnb, service fees: the single fee structure and the split-fee phase-out.
• Florida Department of Revenue, sales and use tax: the 6 percent state rate and local transient rental taxes.
• Florida Department of Revenue, DR-15TDT (R. 10/26) and DR-15DSS (calendar year 2025): county transient rental tax and surtax rates.
• City of Gulf Shores, lodging tax: state, county and city lodging tax rates.
• IRS Publication 527 (2025): personal use of a dwelling unit and dividing expenses.
• Section 509.013, Florida Statutes (2026): the transient public lodging definition.

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