Think your vacation rental is making money? Think again. Many hosts miss hidden costs that eat up their profits. I will reveal how to track every expense and uncover your real earnings to see if your vacation rental is truly profitable.

Ever feel like you’re guessing your way through your vacation rental finances? You’re not alone. One minute you’re celebrating a full calendar, the next you’re wondering where all the profits went. Running a vacation rental isn’t just about charming throw pillows and welcome baskets—it’s about knowing your numbers. And that’s exactly what we’re getting into today.

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In this episode, I’ll break down the numbers that matter most, show you how to actually track your vacation rental profitability, and give you simple strategies to plug the money leaks. If the phrase “cash flow statement” makes your eyes glaze over, don’t worry—we’ll keep it real, simple, and (believe it or not) even a little fun.

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Understand Your Real Costs

Let’s start with the not-so-fun stuff—expenses. If you’re not tracking every penny, you could be bleeding money quietly in the background.

We’re talking about:

• Mortgage or rent

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• Utilities (yes, that “always on” hot tub counts)

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• Cleaning fees

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• Maintenance (hello, surprise plumbing issue)

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• Platform fees (Airbnb doesn’t love you that much)

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• Insurance (and yes, you need the proper kind)

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• Licensing, permits, and taxes

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Don’t forget to factor in your own time. If you’re scrubbing toilets or fielding midnight Wi-Fi questions, that’s labour. Yours. And time is money, my friend.

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Example: Jane, a host in the Okanagan, thought she was turning a tidy profit. After breaking down her numbers, she realised she hadn’t accounted for her 10+ hours a week managing her rental. With that included, she was earning less than minimum wage. Ouch.

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Set Up a Simple Profit Formula

Here’s a playbook you can actually use:

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Profit = Gross Revenue – Operating Expenses – Opportunity Cost

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Opportunity cost? That’s what you could be earning if you put your time, money, or property to another use—like long-term rental or even investing elsewhere.

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Want a cheat sheet for this? Our “Mastering Vacation Rentals: Start, Manage, & Thrive in the Rental Business” course has a handy Vacation Rental Cost Tracker.

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Watch Your Occupancy Rate & Nightly Rate

Here’s where a lot of owners slip up. High occupancy feels like success. A full calendar? Must be doing something right—right?

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Not always.

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If you’re booked solid but charging bargain rates, you could be working hard for peanuts. The goal isn’t just to stay busy—it’s to stay profitable. It’s better to book 20 nights at $250 than 30 nights at $100. Less wear and tear. Fewer turnovers. More money.

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Smart hosts focus on revenue per available night (RevPAN), not just occupancy. That’s where real profit lives. And trust me—once you start looking at your numbers that way, you won’t go back.

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Understanding True Operating Costs

Let’s start with the real talk: most vacation rental owners don’t track all their costs. They know what the cleaner charges and maybe their Airbnb fees, but forget the sneaky ones. You know the ones—like replacing that toaster that guests somehow used as a grill or the late-night emergency plumber visit.

Here’s what to include in your monthly and annual cost tracking:

• Cleaning & Turnover (every guest cycle)

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• Utilities (water, electricity, gas, internet)

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• Maintenance & Repairs (yes, even the “just in case” fund)

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• Platform Fees (Airbnb, Vrbo, Booking.com)

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• Insurance (and please—get short-term rental coverage, not homeowner’s)

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• Marketing & Advertising

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• Restocking guest essentials (soap doesn’t grow on trees)

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You can find a complete downloadable cost tracker in the “Mastering Vacation Rentals: Start, Manage, & Thrive in the Rental Business” course. It’s worth its weight in gold—or at least in guest chocolate.

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Tracking Income: It’s Not Just the Booking Price

We get excited when we see a $2,000 weekend booking, but that’s not what you pocket. Between fees, taxes, and Uncle Sam, your net income might look very different.

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Set up a simple spreadsheet or use software like Hostaway, Hospitable, or OwnerRez. Include:

• Nightly rate (after platform cuts)

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• Add-on services (late checkout, pet fees, airport pickups)

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• Seasonal surges (holidays, local festivals)

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• Refunds or discounts you’ve had to issue

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Got a regular guest who wants a long stay? Great! But be sure to run the numbers. A lower nightly rate spread over two weeks might be better than frequent short stays—less turnover, fewer headaches.

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Calculating Profit Per Stay (Without Guesswork)

Here’s a quick formula to live by:

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Profit Per Stay = Gross Income — Direct Expenses

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And to really see if you’re running a profitable operation, look at your Occupancy Rate and Average Daily Rate (ADR). Then calculate:

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Revenue per Available Night (RevPAN) = Total Income Nights Available

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RevPAN will give you a clearer sense of whether you’re leaving money on the table.

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Here’s a personal example: I once thought a quiet February was just “slow season.” Turns out, I’d priced it too high. Lowered the rate by 15%, upped my bookings by 40%. Net gain? More than I expected. Lesson? Price smart, not just high.

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Know Your Break-Even Point

Your break-even point is your financial oxygen. It tells you how many nights you need to book to cover your costs. Here’s how to figure it out:

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Break-even Nights = Monthly Expenses Average Nightly Rate

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Once you’ve hit that number, every night booked after that is profit. And let me tell you, there’s no sweeter sleep than the one after you’ve crossed your break-even line.

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If I had a nickel for every owner who told me, “I just need to rent it out a few weekends a month,” I could fund my next reno. Just a few weekends a month? Great—if you live on canned beans and denial.

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Smart Pricing Strategy = Bigger Profits

Dynamic pricing isn’t just for hotels. Tools like PriceLabs, Beyond, or Wheelhouse analyse demand in your area and adjust your rates in real time. You wouldn’t sell ice cream at the same price in January and July, right?

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Also, think about your value adds. Early check-ins, late checkouts, hot tubs, or even breakfast baskets can be low-cost, high-reward upsells. Just be sure to price these things based on what they’re worth to the guest—not just your cost.

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So, what’s your most profitable add-on?

Let me know in the comments.

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Use Your Profit Data to Plan Ahead

Once you’ve got a few months of data, trends start popping out. Maybe summer’s great, but winter’s a dud. Maybe mid-week is flat but weekends explode. Use that data to:

• Adjust your marketing focus

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• Offer off-season discounts

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• Build packages or themed stays (pet weekends, couples retreats)

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If you’re ready to take this further, the “Mastering Vacation Rentals: Start, Manage, & Thrive in the Rental Business” course goes even deeper into financial planning, with templates and real-world examples that you can plug straight into your business.

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If your rental plan is ‘just wing it’—this is your wake-up call.

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Download the “The 7-Day Vacation Rental Jumpstart”

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Vision, money, guests—sorted.

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Get your copy now! You can find a link in the show notes.

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Five Key Takeaways

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In Conclusion

Running the numbers isn’t about spreadsheets—it’s about confidence. When you understand your profits, you can make smarter decisions, weather slow seasons, and grow without fear. You’ll stop wondering if you’re doing “okay,” and start knowing that you’re thriving.

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So, how do you feel about your current pricing strategy? Are your numbers working for you—or against you? Drop a comment below and let’s chat.

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And hey—don’t forget to check out the “Mastering Vacation Rentals: Start, Manage, & Thrive in the Rental Business” course for the cost tracker, break-even calculator, and other smart tools.

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You’ve got this. Numbers don’t lie—and neither will your bank account.