Does Airbnb Still Make Sense as an Investment in 2025? Real Case Study

Find out how we’re pushing the CAP rate on this investor’s 6-unit apartment building to 10.22%:

With the ever-changing real estate market, many investors wonder: “Is Airbnb still a good investment in 2025?”

Rising interest rates, local regulations, and market saturation have made some hesitant. However, when operated effectively, short-term rentals (STRs) continue to outperform traditional leasing models.

At Roav Retreats, we specialize in maximizing short-term rental returns for property owners. To answer this question, let’s analyze a real-world case study of a 6-unit apartment building.

We’ll compare two operating models:

✅ Traditional Rentals (Long-Term Leasing)

✅ Short-Term Rentals (STRs)

The results prove that Airbnb still makes sense in 2025.

Case Study: 6 Airbnb Apartments.

This 6-unit property consists of four 1-bed/1-bath units and two 2-bed/1-bath units. Below, we compare the traditional housing model vs. short-term rentals.

1️⃣ Traditional Rentals:

• Total Annual Revenue: $132,000

• Current Market Vacancy Rate: 7.8%

• Total Annual Expenses: $56,235

• Net Operating Income (NOI): $74,924

• Cash-on-Cash ROI: 5.63%

• CAP Rate: 7.25%

• Monthly Net Income after Debt Service: $1,919.17

While the traditional housing model provides a steady income, it significantly underperforms compared to STRs.

2️⃣ Short-Term Rentals – Airbnb Model

• Total Annual Revenue: $222,537

• Total Expenses: $116,880 (Higher due to robust management systems, housekeeping, & supplies)

• Net Operating Income (NOI): $105,657

• Cash-on-Cash ROI: 13.15%

• CAP Rate: 10.22%

• Monthly Net Income after Debt Service: $4,480.30

Despite the higher expenses, the Airbnb model produces $30,000+ more in annual NOI than the traditional model. This translates to a higher CAP rate (10.22%).

Why Short-Term Rentals Still Win in 2025

1️⃣ Higher Revenue & Profit Margins

STRs command higher nightly rates than long-term leases, allowing owners to maximize rental income. Even with increased expenses for cleaning, management, and supplies, the revenue increase justifies the shift to Airbnb.

2️⃣ Dynamic Pricing = More Control

Unlike long-term rentals, Airbnb pricing can be adjusted in real-time based on demand, seasonality, and local events. This ensures property owners capture peak rates during high-demand periods.

3️⃣ Asset Appreciation & Marketability

Properties operating as high-performing STRs often sell at a premium, as investors recognize the increased cash flow potential. This enhances long-term property value.

4️⃣ Hands-Off Management Makes It Passive

One of the biggest concerns investors have is the time and effort required to run an Airbnb. That’s where Roav Retreats comes in. Our expert team handles guest communication, dynamic pricing, housekeeping, and maintenance, so owners profit without the headaches.

Final Verdict: Is Airbnb Still a Good Investment in 2025?

Looking at real numbers from this 6-unit property, the answer is clear: Airbnb is still one of the most lucrative real estate investments in 2025. With a higher CAP rate (10.22% vs. 7.19%) and more than double the cash flow, short-term rentals continue to outperform traditional leasing models.

If you’re considering turning your property into an Airbnb or want to maximize your rental income without the hassle, Roav Retreats is here to help.