Houston Airbnb Investment
Analysis & ROI Calculator

Start with projected annual revenue (a Houston three-bedroom averages $34,835), subtract operating expenses of roughly 35 to 45% (cleaning, supplies, utilities, insurance, platform fees, management), then divide net operating income by your total cash invested (down payment, closing costs, furnishing). At 40% expenses that is about $20,901 of NOI to work with before debt service. The investment calculator on this page runs the full model with your purchase price and financing.

Cap rate is net operating income divided by purchase price. With $20,901 of NOI from a typical three-bedroom, a $350,000 purchase produces a 6.0% cap rate and a $450,000 purchase produces 4.6%. Compare that against long-term rental cap rates in Houston, typically 4 to 6%, and against the gross yield figures on each neighborhood page, which pair live median list prices with local revenue.

A well-run Houston short-term rental typically grosses $2,857 a month on average, usually two to three times comparable long-term rent, but carries 35 to 45% operating costs versus 20 to 30% for a long-term lease and requires active management. Net cash flow is often higher but more variable, with March at the top and January at the bottom of the year. Short-term rentals also preserve the option to convert to a 30+ day or annual lease if the market shifts.

The calculator uses Houston market data from this page: $184 average daily rate, 56% occupancy, and bedroom-level revenue. Enter purchase price, down payment, and rate, and it projects gross revenue, applies expense ratios, and returns net cash flow, cash-on-cash return, and break-even occupancy. Adjust the rate and occupancy inputs to the specific neighborhood you are targeting.

Using the Houston three-bedroom average of $2,903 a month: subtract roughly $1,161 in operating expenses and a mortgage payment (about $1,746 on a $350,000 purchase with 25% down at 7%), and monthly cash flow lands near $-4. Properties in the top neighborhoods, where revenue runs $40,420 a year, cash flow substantially more; each five-point change in occupancy moves monthly revenue by roughly $277.

Short-term rental investors in Houston typically target 8 to 12% cash-on-cash returns versus 4 to 7% for long-term rentals, but the spread depends on management quality, pricing, and property type. Two- and three-bedroom homes in mid-priced neighborhoods with strong occupancy tend to produce the best risk-adjusted returns. The Analysis tab breaks down the employment, population, and housing-cost data behind Houston rental returns.