What your short-term rental cabin actually nets
The short answer
Your cabin's real net income is the gross rent it collects minus every real cost of running it. That includes the costs your accounting software subtotal quietly skips: mortgage interest, big one-off repairs like a roof or an HVAC unit, the money you spent furnishing the place, and a reserve for the next surprise. Most owners think their cabin nets more than it does, because they stop counting at the easy bills.
Here is how to find the true number.
Gross is not net
The deposit that lands in your bank is not what the cabin earned. An Airbnb, Vrbo, or property manager payout already has money taken out: platform fees, cleaning, and taxes withheld. If you record the deposit as your income, your top line looks smaller than it really is and those costs vanish from your books.
Book the gross rent first. Then record the fees, the cleaning, and the taxes as their own separate lines. One deposit can hold five or more line items. When each piece is on the page, you can finally see what the cabin brought in and where the money went.
The costs that hide
A tidy subtotal in your software feels like profit. It usually is not. These are the costs owners leave out most often:
- Mortgage interest. The part of every payment that is not principal is a real cost of the cabin. Leave it out and a cabin that feels profitable can be barely breaking even.
- Big one-off repairs. A new roof, an HVAC unit, a failed hot tub. These do not show up every month, so they are easy to forget when you judge profit. They are still real money.
- Furnishing and startup money. Beds, couches, kitchenware, the hot tub, the startup supplies. That is cash out the door before the first guest books. A return figured as if the cabin furnished itself is not honest.
- A repair reserve. The next surprise is coming. Money set aside for it is money the cabin is spending, even before it leaves the account.
Give each cabin its own books
If you run more than one cabin through a single bank account, they blur into one number. The strong cabin quietly covers for the weak one, and you never see it.
Give each property its own set of books: its own income, its own expenses, its own bottom line. Do that and the winners and the losers show themselves inside a month. Then you can price, keep, or sell on real numbers instead of a gut feeling.
How to find your real net, step by step
- Separate the accounts. One checking account and one card per cabin. Run every cabin dollar through them, in and out.
- Book the gross, then the pieces. Record gross rent, then each fee, cleaning charge, and withheld tax on its own line.
- Reconcile every month. Match each payout to the booking and to the bank. Chase any gap the same week.
- Count the costs that hide. Add mortgage interest, any big repairs, the furnishing and startup cash you put in, and your reserve.
- Read the bottom line per cabin. That number, not the bank balance, is what the cabin nets.
A simple monthly rhythm
Doing this once a year invites missed receipts and miscoded entries. A steady monthly close gives you twelve checkpoints a year instead of one scramble. Reconcile, categorize, review, and set aside your reserve and tax money as the bookings come in. If you do not want to do it yourself, hand it to someone who will.
The takeaway
Your cabin's net is only as honest as the costs you count. Book the gross, keep each property on its own books, and add the costs your software leaves out. Then the number you are working from is real.
Want a clean set of books built for your cabins?
Book a call at smokymtncpas.com/book/. Or grab our free Short-Term Rental Owner Bookkeeping Checklist at smokymtncpas.com/links.
We are a boutique firm run by two CPAs. We handle your books and your taxes together, all year.
Common questions
What does a short-term rental cabin actually net?
The gross rent it collects minus every real cost, including mortgage interest, big repairs, the furnishing money you put in, and a repair reserve. The deposit in your bank is not the net.
Why is my cabin's profit lower than I thought?
Most owners stop counting at the easy bills. The mortgage interest, one-off repairs, and furnishing money are real costs that a software subtotal can skip.
Should each cabin have its own books?
Yes. Separate books per property show which cabin earns and which one is being carried. One shared account hides that.
What is a repair reserve?
A fixed slice of every payout set aside for the next surprise, the same way you set aside for taxes, so a big repair does not come out of profit.
How often should I close the books on my cabin?
Monthly. Twelve checkpoints a year beat one year-end scramble, and small errors get caught before they pile up.