The average nightly price your rental needs to break even (with the formula)

Note: I used an AI assistant (Claude) to help write this article. The formulas and the example numbers are checked by running them. The example property is invented. The result is before income tax. I am not an accountant and this is not tax advice.

Most hosts know their nightly price. Fewer know the average price below which the whole period loses money. Here is a simple way to calculate it from numbers you already have, in any spreadsheet.

What you need, for one property and one period (for example January to today):

1. Nights booked (N)
2. Number of stays (S)
3. Platform commission as a fraction (c). For example 15% = 0.15. Check what your platform really charges you.
4. Cleaning cost you pay per stay (k). If guests pay you a separate cleaning fee, use the cost minus that fee, or leave the fee out of your income.
5. Fixed costs for the same period (F): rent or mortgage share, utilities, internet, insurance, supplies

The formula:

break-even price per night = (F + S x k) / ((1 - c) x N)

It answers: at the occupancy I really had, what average price covers all costs?

Worked example (invented property):

• 43 stays, 139 nights booked, so S = 43 and N = 139
• Commission 15%, cleaning 25 per stay, fixed costs 3,877
• Cleaning total = 43 x 25 = 1,075
• Costs to cover = 3,877 + 1,075 = 4,952
• Break-even = 4,952 / (0.85 x 139) = 41.91 per night

If the average price you charge is 71.95, the gap is 30.04 per night. If your average price were 40, you would lose money on average, even though the calendar looks busy.

Three things to watch:

• The number depends on occupancy. If you book fewer nights next period, N drops and the break-even price rises. Recalculate every month.
• Commission may also apply to cleaning fees on some platforms. Put the real figure in c.
• Do not count nights that were blocked by you or by the owner as booked nights.

What to do with it: treat 41.91 as the average price you need over the whole period, not as a minimum for every single night. Fixed costs are paid whether a night is booked or empty, so a discounted night that still covers commission and cleaning adds money compared with an empty night. For a one-night stay with a 25 cleaning cost and 15% commission, the lowest price that does not lose money on that stay is 25 / 0.85 = 29.41. The danger is not one discounted night; it is a habit of discounting so many nights that your average falls below 41.91. Then the period as a whole loses money.

I am testing a small desktop tool that does this calculation for several properties at once from a booking export, plus a December empty-night review. It is not built yet. There is a page with a sample report on invented data and a waiting list: https://stayledger-515.pages.dev

I would like to hear which cost you forget most often when you calculate your own break-even.