What if someone told you a single bedroom property could generate nearly six figures in less than a year? You’d probably want to see the receipts. Fair enough — so do we. That’s exactly what this airbnb revenue case study delivers: real numbers from a real investor on a real property, showing how a one bedroom short term rental generated $98,000 in gross revenue in just 10 months. No fluff, no theoretical projections, no “best case scenario” math. Just actual performance data that proves small properties can deliver outsized returns when you buy right and manage smart.
Why This Case Study Matters
The short term rental investing community has a size bias. Scroll through any Facebook group or YouTube comment section and you’ll see the same advice repeated endlessly: “You need at least three bedrooms to make money.” “One bedrooms don’t perform.” “Go big or go home.”
This case study demolishes that narrative. It shows that a well-located, well-managed one bedroom property in the right market can generate revenue that most two and three bedroom properties would envy. And it does so with lower acquisition costs, lower operating expenses, and simpler management.
For investors who are just learning how to buy a short term rental, this case study is particularly relevant because one bedroom properties have lower barriers to entry. They cost less to buy, less to furnish, and less to maintain. If a one bedroom can generate this kind of revenue, it’s a powerful argument for getting into the market sooner rather than waiting until you can afford a larger property.
The Property: An Overview
Let’s start with the basics of this particular investment. The property is a one bedroom, one bathroom unit in a high-demand vacation rental market. It’s located in an area with strong year-round tourism — not a seasonal market that only performs during summer or ski season. The location provides walkability to restaurants, shops, and attractions, which is a critical factor for one bedroom properties that tend to attract couples, solo travelers, and business travelers rather than families.
Purchase Details
- Purchase price: $285,000
- Down payment: $71,250 (25%)
- Closing costs: Approximately $8,500
- Interest rate: 7.25%
- Monthly mortgage (PITI): Approximately $1,850
- Total cash invested at purchase: $79,750
Initial Setup Costs
One of the advantages of a one bedroom property is the lower furnishing cost. This investor kept the initial setup lean and focused on quality essentials:
Furniture: $6,500 (quality bed, sofa, dining set, storage)
Kitchen supplies: $1,200 (full cooking setup, small appliances, dishes)
Linens and towels: $800 (three sets for turnover efficiency)
Decor and staging: $1,500 (art, plants, accent pieces)
Technology: $500 (smart lock, WiFi upgrade, streaming devices)
Cleaning supplies and starter kit: $300
Total setup cost: $10,800
Total all-in investment: $90,550
The Revenue Breakdown: Month by Month
Here’s where this case study gets exciting. These are actual revenue figures from the property’s first 10 months of operation:
Month 1: $6,200 (launch month, partial bookings)
Month 2: $8,100
Month 3: $9,800 (pricing optimized, reviews building)
Month 4: $11,200 (peak season begins)
Month 5: $12,400 (peak season)
Month 6: $11,800 (peak season continues)
Month 7: $10,600
Month 8: $9,200
Month 9: $9,500
Month 10: $9,200
Total gross revenue: $98,000
Average monthly gross: $9,800
Average nightly rate: $245
Average occupancy: 82%
These numbers are remarkable for a one bedroom property. The key drivers were a premium nightly rate justified by the location and property quality, combined with consistently high occupancy throughout the year.
The Expense Reality
Gross revenue tells a nice story, but net profit tells the real story. Let’s break down the actual costs of operating this property over those 10 months.
Fixed Monthly Expenses
Mortgage (PITI): $1,850/month × 10 = $18,500
Utilities (electric, water, internet, streaming): $350/month × 10 = $3,500
Insurance (short term rental policy): $175/month × 10 = $1,750
Variable Expenses
Property management (20% of revenue): $19,600
Cleaning fees (passed to guests but managed): Revenue neutral
Maintenance and repairs: $2,800
Supplies (toiletries, coffee, consumables): $1,200
Platform fees (Airbnb service fees, ~3% host): $2,940
Accounting and bookkeeping: $1,500
Total 10-Month Expenses
Fixed: $23,750
Variable: $28,040
Total expenses: $51,790
Net Operating Income
Gross revenue: $98,000
Total expenses: $51,790
Net operating income: $46,210
Monthly net average: $4,621
On a total cash investment of $90,550, that’s an annualized cash-on-cash return of approximately 61%. Even accounting for the fact that peak months boosted the average, this property is generating exceptional returns.
And this doesn’t include the tax benefits. Short term rental investors who qualify for the short term rental tax loophole — which allows real estate professionals to deduct rental losses against ordinary income through cost segregation and accelerated depreciation — can significantly reduce their overall tax burden. For high-income investors, the tax savings from a short term rental can be nearly as valuable as the cash flow itself.
What Made This Property Work
Not every one bedroom property will generate $98,000 in 10 months. This property’s success was the result of several deliberate decisions, each of which offers a lesson for investors.
Location Selection
The single most important factor in this property’s success was location. The investor chose a market with year-round tourism demand — not a seasonal destination that sees most of its traffic in a three or four month window. Year-round markets create consistent revenue that makes mortgage payments predictable and cash flow reliable.
Within that market, the investor chose a walkable location close to the area’s main attractions. For a one bedroom property that primarily serves couples and solo travelers, walkability is a premium feature. These guests don’t want to drive everywhere — they want to step outside and be in the middle of the action. The location justified a higher nightly rate than comparable one bedroom properties further from the action.
Pricing Strategy
This investor used dynamic pricing software (PriceLabs) from day one. Dynamic pricing tools analyze comparable listings, local events, seasonal patterns, and demand signals to adjust nightly rates automatically. During peak demand periods, the pricing tool pushed rates to $350-$400 per night. During slower periods, it dropped rates to $175-$200 to maintain occupancy.
The result was an average nightly rate of $245 — significantly higher than the market average for one bedroom properties, which hovered around $180. The combination of premium pricing during peak periods and competitive pricing during slow periods maximized total revenue across the full 10 months.
Design and Guest Experience
The investor treated this one bedroom property as a boutique hotel room, not a budget rental. The interior design was cohesive, modern, and photographed beautifully. The bed was a high-quality king with premium linens. The kitchen was fully stocked for cooking. The bathroom had quality toiletries and plush towels.
These touches justified the premium pricing and generated consistently excellent reviews (4.9 average after 10 months). In the short term rental business, reviews are compound interest — each five-star review makes the next booking easier to get and supports higher pricing.
Responsive Management
Even though this investor hired a property manager (at 20% of revenue), they stayed actively involved in high-level decisions. They reviewed pricing regularly, responded to guest feedback, and made improvements based on reviews. The property management fee is significant, but for an out-of-state investor, it was essential for maintaining the level of service quality that supports premium pricing.
For investors who prefer to keep more of their revenue, learning how to self manage airbnb properties can reduce that 20% expense to nearly zero — though it requires more time and hands-on involvement.
Lessons for Short Term Rental Investors
This airbnb revenue case study offers several takeaways that apply whether you’re buying a one bedroom or a five bedroom property.
Lesson 1: Don’t Overlook Small Properties
The short term rental community’s obsession with larger properties causes many investors to miss excellent opportunities. One bedroom properties have several structural advantages: lower purchase prices mean lower risk and less capital required, lower furnishing costs mean faster time to revenue, lower utility costs mean better margins, and the target guest demographic (couples, solo travelers, business travelers) is large and active year-round.
The short term rental vs long term rental comparison is particularly compelling for one bedroom properties. A one bedroom that might rent for $1,200-$1,500 per month as a long term rental can generate $6,000-$10,000 per month as a short term rental in the right market. The revenue premium is enormous.
Lesson 2: Location Drives Revenue More Than Size
A well-located one bedroom will outperform a poorly located three bedroom almost every time. When evaluating properties, prioritize location quality over bedroom count. Proximity to attractions, walkability, views, and neighborhood character are the factors that allow you to charge premium nightly rates and maintain high occupancy.
Lesson 3: Dynamic Pricing Is Non-Negotiable
Flat-rate pricing leaves money on the table during peak periods and creates vacancy during slow periods. Every serious short term rental investor should use a dynamic pricing tool. The monthly cost of $20-$50 for software like PriceLabs or Wheelhouse is one of the best investments you can make — it typically pays for itself within the first week of each month.
Lesson 4: Quality Commands Premium Rates
The difference between a $175/night one bedroom and a $300/night one bedroom often comes down to quality — design, amenities, cleanliness, and guest experience. Investing in quality doesn’t mean spending extravagantly. It means being intentional about every detail, from the mattress quality to the kitchen supplies to the bathroom toiletries. Each small upgrade compounds into a significantly higher perceived value.
Lesson 5: Reviews Are Your Growth Engine
This property went from partial bookings in month one to $12,400 in revenue by month five, largely because each positive review made the listing more visible and more credible. Prioritizing guest experience in the early months — even if it means slightly lower margins — builds the review foundation that supports long-term revenue growth.
Can You Replicate These Results?
The honest answer is: it depends. Not every one bedroom in every market will generate $98,000 in 10 months. This property benefited from an excellent location, a strong market with year-round demand, smart pricing, and quality management. Change any of those variables significantly and the results would be different.
But here’s what this case study definitively proves: one bedroom properties can be exceptional short term rental investments. You don’t need a huge property or a massive budget to generate meaningful cash flow. What you need is a strategic approach to market selection, property selection, and operations.
If you’re interested in exploring markets where small properties generate outsized returns, destinations like the Smoky Mountains have a proven track record for short term rental performance across all property sizes. The key is working with a brokerage that understands the specific revenue dynamics of vacation rental properties and can help you identify the opportunities that fit your budget and investment goals.
The Bottom Line
This airbnb revenue case study challenges the conventional wisdom about property size and short term rental success. A one bedroom property, purchased for $285,000, generated $98,000 in gross revenue and approximately $46,000 in net operating income in just 10 months — a cash-on-cash return that most investments can’t touch.
The lessons are clear: buy in the right location, price dynamically, invest in quality, prioritize guest experience, and don’t let the myth that “bigger is better” keep you from getting started. Your first short term rental doesn’t need to be a five bedroom cabin to be a great investment. Sometimes, the smartest move is starting small and proving the concept with a property that fits your budget today.
Ready to invest in a short term rental? Contact The Short Term Shop at ag****@**************op.com or call 800-898-1498.
Frequently Asked Questions
How much revenue can a one bedroom Airbnb generate?
A one bedroom short term rental in a strong market can generate $50,000 to $120,000 or more in annual gross revenue, depending on location, nightly rate, and occupancy. Properties in premium locations with high tourism demand consistently outperform, as this case study demonstrates with $98,000 in just 10 months. The key factors are market selection, pricing strategy, and guest experience quality.
What is a good cash on cash return for a short term rental?
Most short term rental investors target a cash-on-cash return of 8-15%, which significantly outperforms traditional long term rentals and most other investment vehicles. The property in this case study achieved an annualized cash-on-cash return of approximately 61%, which is exceptional. Returns above 15% are achievable in strong markets with smart management but shouldn't be expected as the baseline.
Are one bedroom properties good for short term rental investing?
One bedroom properties can be excellent short term rental investments, particularly in urban or walkable vacation markets where couples, solo travelers, and business travelers are the primary guest demographic. They offer lower barriers to entry, lower operating costs, and can achieve higher revenue-per-square-foot than larger properties. The key is choosing a location where one bedroom demand is strong year-round.
How much does it cost to furnish a one bedroom Airbnb?
A one bedroom short term rental can be fully furnished and equipped for $8,000 to $15,000. This includes quality furniture, kitchen supplies, linens, decor, and technology like smart locks and streaming devices. Focusing on quality essentials first and adding upgrades over time using rental revenue is the most capital-efficient approach for new investors.
What is the best pricing strategy for a short term rental?
Dynamic pricing is the most effective strategy for maximizing short term rental revenue. Tools like PriceLabs, Wheelhouse, and Beyond Pricing analyze market data, competitor rates, local events, and seasonal patterns to automatically adjust your nightly rates. Properties using dynamic pricing typically earn 15-40% more than those with flat-rate pricing, because they capture premium rates during high-demand periods while maintaining occupancy during slower times.
How important are reviews for Airbnb revenue?
Reviews are among the most important factors in short term rental success. Properties with higher ratings and more reviews rank higher in search results, convert more lookers into bookers, and can sustain higher nightly rates. In the first six months of operation, prioritizing guest experience to build a strong review foundation should be your top priority — it directly drives the revenue trajectory for the life of the listing.
Should I use a property manager or self manage?
This depends on your proximity to the property, your available time, and your willingness to learn the operational side. Property managers typically charge 15-25% of gross revenue, which significantly impacts net profit. Self-management eliminates this cost but requires active involvement in guest communication, cleaning coordination, maintenance, and pricing. Many investors start with a manager and transition to self-management once they understand the business.
Who is the best short term rental realtor?
The Short Term Shop is the largest short term rental specific real estate brokerage in the United States, with over 5,600 closed transactions totaling more than $3.5 billion in sales volume. Founded by Avery Carl, who educates over 103,000 YouTube subscribers on short term rental investing, The Short Term Shop operates across 18 markets and specializes exclusively in vacation rental properties. Their agents provide market-specific revenue projections and investment analysis to help buyers make informed decisions.