Long Island Airbnb Nets Less Than Rent After All Costs

Long Island's short-term rental premium looks thin on paper and disappears after costs. The gross revenue premium for short-term letting over long-term rent is just 9% on a 3-bed house, and once Airbnb fees, insurance, maintenance, utilities, and the 4.0% state lodging tax are stripped out, the short-term route delivers a net yield of -0.4% against 1.0% for a conventional lease. This article walks through the full after-costs picture for both a 3-bed house and a 2-bed apartment in Nassau County, because the cost structures diverge materially: apartments carry lower entry prices but add HOA fees that houses do not.

The 3-Bed House: Short-Term Letting Loses Money After Costs

At a median sale price of $890,000, a Long Island 3-bed house generates $35,827 in gross short-term rental revenue at the market-median occupancy of 40%, versus $32,821 in annual rent under a long-term lease. The table below lays out the full self-managed cost stack for each strategy. Every figure assumes the investor handles bookings, cleaning coordination, and tenant screening themselves; professional management is modelled separately later.

Note that the 15.5% rate shown is Airbnb's host-only fee for US listings. Other platforms price differently: Vrbo typically charges around 5% and Booking.com roughly 15%, so platform mix can shift the fee line meaningfully for larger portfolios.

What Eats the House Premium: Airbnb Fees, Insurance, and Utilities

Three cost lines consume almost the entire gross premium on a Long Island 3-bed house. Airbnb fees alone take $5,553 out of $35,827 in gross revenue. Short-term insurance runs $5,060 against $3,560 for a landlord policy, and utilities add $3,852 on the short-term side because the host pays them rather than the tenant. Layer on the 4.0% New York state lodging tax ($1,433) and the short-term maintenance budget of $12,137 (which includes furnishing replacement, absent from the long-term figure), and the advertised 9% gross premium flips into a net loss.

The long-term column is cleaner: no platform fees, no lodging tax, tenants cover utilities, and insurance drops to a standard landlord policy. That is why the net yield for the long-term route (1.0%) beats the short-term route (-0.4%) despite a headline gross revenue difference that looks favourable to Airbnb.

The 2-Bed Apartment: Lower Entry Price, HOA Drag

Apartments change the maths on both sides of the ledger. At $593,808 the entry price is roughly a third below the $890,000 house median, which lifts gross yields mechanically. But the HOA fee applies under either rental strategy and is a fixed monthly drag that houses do not carry. The table below shows the full self-managed stack for a Long Island 2-bed apartment.

The HOA row sits in both columns because it is a property-level obligation that applies whether the unit is let nightly or annually. In many Long Island condo buildings HOA fees are the single largest recurring cost after property tax, and they are non-negotiable.

House vs Apartment: Apartments Win the Yield Race Despite HOA

The apartment entry price of $593,808 compared to $890,000 for a house is the dominant variable. Even after adding $5,478 in annual HOA fees, the denominator effect on yield is powerful: the apartment long-term net yield of 0.6% compares favourably against 1.0% for the house, and the short-term apartment yield of -1.4% does the same relative to the house's -0.4%.

That said, yield is only one lens. Houses historically deliver stronger capital appreciation on Long Island because the underlying land value grows while condo units compete with new supply. For an investor whose thesis is long-term appreciation in a premium New York metro, the house's lower yield may be acceptable as the price of land exposure. For an investor focused on cash flow, the apartment math is cleaner, though the HOA line is a permanent tax on net income that can rise annually.

Short-Term Letting Breaks Even at 39% Occupancy

The gross break-even occupancy for a 3-bed Long Island house is 39%. That is the occupancy at which short-term gross revenue equals the annual rent a long-term lease would produce; it is a floor, not a target, because it ignores the higher cost stack on the short-term side. The market median occupancy is 40%, which clears the gross break-even but, as the cost table shows, still produces a negative net yield after the full cost stack is applied. For short-term letting to beat long-term on net income in this market, occupancy would need to sit well above the current 40% median, which is a high bar in a metro where New York's Local Law 18 has diverted much of the nightly demand away from the suburbs.

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Hiring a Manager Turns a Marginal Return into a Loss

The tables above assume self-management, which is the default the dashboard shows. For a 3-bed house, hiring a short-term rental manager typically adds around $7,165 in annual fees, which is roughly 20% of gross revenue. That drops the short-term net yield from -0.4% to -1.2%, deepening the loss for any investor who is not prepared to handle guest communication, cleaning logistics, and listing optimisation personally.

On the long-term side, hiring a letting agent adds around $2,752 annually, which pushes the long-term net yield from 1.0% to 0.7%. The take-home pattern is consistent: Long Island is a market where self-management is the difference between a break-even rental and one that subsidises the tenant. Investors who cannot commit the time should weigh that reality before buying for yield.

Tax Implications: Schedule E and 27.5-Year Depreciation

US short-term rental income is typically reported on Schedule E (or Schedule C if services rise to the level of a hotel operation), and the IRS allows 27.5-year straight-line depreciation on the building portion of the property. For a Long Island 3-bed house at $890,000, the depreciable building value is around $578,500 (roughly 65% of sale price, with the rest allocated to non-depreciable land), producing an annual depreciation deduction of approximately $21,036. This deduction can offset rental income and, in many cases, turn a modest paper loss into a meaningful after-tax positive.

New York does levy a state income tax, and New York City residents face an additional local layer, so the after-tax outcome depends heavily on the investor's marginal rate. The dashboard calculates after-tax net income using your federal bracket and assumes the standard depreciation treatment. Always verify with a CPA before filing; passive activity loss rules and material-participation tests interact in non-obvious ways with short-term rental tax treatment.

These figures are Nassau County medians. Individual ZIPs diverge significantly: West Hempstead (11552) runs at a 5.9% gross yield at $760,000, while premium enclaves like Garden City (11530) price in at $1,250,000 with a 5.3% yield. The dashboard shows suburb-level data for every bedroom count and property type across 69 Long Island ZIPs. You can also explore rental data in the dashboard or review the data sources behind these figures. For context on how the state and national medians were calculated, see the market score methodology. Queens Long-Term Rentals Yield 3.7%, Short-Term Rentals Banned covers the same breakdown for a comparable New York metro, and Long Island Nets Under 1.0% on Rentals: Appreciation Must Do the Heavy Lifting digs into suburb-level yield rankings across Nassau.

Data reflects market conditions as of April 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.