Dallas short-term rentals gross 98% more than long-term rentals on a 3-bed house, but after Airbnb fees, insurance, utilities, maintenance, property tax and the 6.0% hotel occupancy tax, the net advantage shrinks substantially. This article works the after-cost picture for both a 3-bed house AND a 2-bed apartment in Dallas (Dallas County), because the cost structures diverge in ways the gross numbers hide. Apartments enter at a fraction of the price but carry HOA fees that houses never pay.
The 3-Bed House: Short-Term Rental Nets Roughly 3.3%, Long-Term Nets 2.1%
A median Dallas 3-bed house sells for around $350,000 and rents for $1,778/month, producing an annual gross rent of $19,437 after the 91% tenanted-occupancy haircut. Run the same property as an Airbnb at the city-average occupancy of 44% and $263/night, and gross revenue rises to $38,428. The cost stack is what eats the difference.
| short-term rental | long-term rental | |
|---|---|---|
| Property price | $350,000 | $350,000 |
| Gross revenue | $38,428 | $19,437 |
| Airbnb fees (15.5%) | $5,956 | , |
| Insurance | $5,000 | $3,500 |
| Maintenance | $5,889 | $3,413 |
| Utilities | $2,640 | $0 |
| Property tax | $5,115 | $5,115 |
| short-term rental tax | $2,306 | , |
| Total costs | $26,906 | $12,028 |
| Net income | $11,522 | $7,409 |
| Net yield | 3.3% | 2.1% |
Warning: short-term rental figures assume operation continues during the 2023 Dallas zoning ordinance court injunction. Enforcement is currently blocked, with the appeal pending at the Texas Supreme Court. Hotel occupancy tax collection is required regardless. Verify status before purchase.
Airbnb Fees, Utilities and Lodging Tax Account for the Bulk of the Premium Erosion
Airbnb fees alone strip $5,956 from gross revenue at the 15.5% host-only rate, and other booking platforms charge differently: Vrbo runs around 5% and Booking.com around 15%. Utilities add $2,640 on the short-term side because guests aren't paying their own bills, where long-term tenants typically cover utilities themselves. Insurance rises by roughly 40% from $3,500 to $5,000 once a property is run as a commercial accommodation. Maintenance jumps from $3,413 to $5,889 because short-term maintenance includes furnishing replacement (linens, kitchenware, paint, broken items) on top of routine repairs.
The Dallas-specific drag is the 6.0% Hotel Occupancy Tax, which adds $2,306 to the cost stack with no equivalent on the long-term side. Property tax of $5,115 (at the 1.5% rate) hits both strategies equally, so it doesn't change the comparison. The combined effect: total costs of $26,906 for short-term versus $12,028 for long-term, which means the gross premium of 98% compresses to a net yield gap between 3.3% and 2.1%.
The 2-Bed Apartment: Lower Entry Price, But HOA Fees Reshape the Math
A median Dallas 2-bed apartment sells for around $163,092, less than half the price of a median 3-bed house. The trade-off is HOA fees of $2,549/year, which apply whether the apartment is rented short-term or long-term, and gross revenue is also lower because both nightly rates ($157) and monthly rents ($1,124) trend below house equivalents.
| short-term rental | long-term rental | |
|---|---|---|
| Property price | $163,092 | $163,092 |
| Gross revenue | $23,411 | $16,332 |
| Airbnb fees (15.5%) | $3,629 | , |
| Insurance | $2,560 | $1,060 |
| Maintenance | $3,280 | $1,590 |
| Utilities | $2,244 | $449 |
| Property tax | $2,383 | $2,383 |
| short-term rental tax | $1,405 | , |
| HOA fees | $2,549 | $2,549 |
| Total costs | $18,050 | $8,031 |
| Net income | $5,361 | $8,301 |
| Net yield | 3.3% | 5.1% |
The HOA row appears in both columns because it is a property-level cost that applies regardless of rental strategy. Many HOAs in Dallas also restrict short-term letting independently of the city's zoning ordinance, so check the bylaws before buying for Airbnb use.
House vs Apartment: Which Property Type Actually Pays Better in Dallas
The 3-bed house enters at $350,000 versus the 2-bed apartment's $163,092, a difference that frees up substantial capital. The apartment carries an HOA bill of $2,549 that the house doesn't pay, but it also carries lower absolute costs across insurance, utilities and maintenance because the unit is smaller. The interesting result is in the net yield columns: the apartment's short-term net yield of 3.3% compares to 3.3% for the house, and the long-term comparison sits at 5.1% versus 2.1%.
The choice depends on how much capital you have to deploy and what you're optimizing for. Apartments let you enter the market with less, and percentage yields can land favorably because the denominator (price) is so much smaller. Houses produce higher absolute dollar returns and avoid HOA boards that may restrict short-term use. These are city medians: individual Dallas neighborhoods diverge significantly, and ZIP-level data is the only way to pick the right property in the right area. The dashboard shows every Dallas ZIP across both bedroom counts and both property types.
View Dallas in the dashboard → Free preview · every bedroom count and property type
For full per-neighborhood filtering and saved scenarios, $19 for 24-hour access. Get access
Gross Break-Even Sits at 22% Occupancy, Well Below the Market Median
Short-term gross revenue equals long-term annual rent for a 3-bed Dallas house at 22% occupancy. The current market median is 44%, so the typical Dallas operator clears the gross break-even by a wide margin. Treat 22% as the floor (the point below which short-term doesn't even match long-term gross), not as a target. Targets should sit much closer to the 44% city average, with adjustments for property type and neighborhood.
Hiring a Manager Drops the 3-Bed House Net Yield to 0.5%
The tables above assume self-management, which is how the Dallas dashboard defaults are calibrated. If you outsource the work, a typical Dallas short-term manager charges around 25% of gross revenue, which works out to roughly $9,607/year on the 3-bed house and drops the net yield from 3.3% to 0.5%. Long-term agents typically charge less, around 11% of rent collected, adding around $2,240 on the long-term side and dropping the long-term net yield to 1.5%.
Self-management on a short-term rental in Dallas is realistic for owner-occupiers or owners within driving distance, but it isn't passive: it requires guest communication, cleaner coordination, restocking, repairs and review management. Owners with one property within 30 minutes typically self-manage; owners with multiple properties, out-of-state owners, or those wanting genuinely passive income should price the management fee in from day one.
Tax Treatment: No Texas State Income Tax, Plus 27.5-Year Federal Depreciation
Texas charges no state income tax, so rental income flows straight into the federal calculation. On the federal side, residential investment property qualifies for 27.5-year straight-line depreciation on the building portion (not land), which on a $350,000 Dallas house with a 80% building allocation produces a depreciable base of $280,000 and an annual deduction of around $10,182. This deduction is what often turns a modest cash-flow positive property into a tax-loss-generating one on paper. Short-term rentals reported on Schedule C (with material participation) or Schedule E (more passive) are treated differently, and the IRS's 7-day average stay rule reclassifies many short-term rentals as non-residential for tax purposes.
The Dallas Hotel Occupancy Tax of 6.0% (plus 6.25% state sales tax on accommodations) is added to the guest's bill, but most operators absorb it within their advertised nightly rate to stay competitive on listings, which is why the cost stack above deducts it from gross revenue rather than treating it as a pass-through. The dashboard calculates after-tax positions for every Dallas ZIP, but consult a local tax professional for your specific federal bracket and entity structure. Data reflects market conditions as of May 2026.
Explore Dallas in the dashboard
Free preview with neighborhood-level data, every bedroom count, every property type.
View Dallas →Need full filtering and saved scenarios?
$19 for 24-hour access. All neighborhoods, all property types. Get access
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.
Methodology and Assumptions
Defaults used in the figures above. All inputs are adjustable in the dashboard.
How available nights are determined
Available nights default to 330 per year, reflecting an active operator with minimal blocked time. Where local regulations cap whole-home short-term lets (for example London at 90 nights, New South Wales at 180), the cap is applied. In markets where short-term rental requires owner-occupancy or is otherwise prohibited for investment properties, available nights drop to zero.
How occupancy is measured
The percentage of available nights that get booked, drawn from market data. A property listed for 200 nights with 100 bookings shows 50% occupancy. Adjustable in the dashboard.
Long-term rental management default
Defaults to self-managed (zero management fee), reflecting the most common arrangement for US individual investors. The dashboard slider lets you add a property manager fee if you plan to outsource.
Short-term rental management default
Set to self-managed (zero management fee) by default, the most common arrangement for individual investors. Hiring a professional manager typically costs 20-25% of gross revenue and reduces net yield proportionally. Toggle in the dashboard.
How property tax is calculated
Calculated as a percentage of property value, varying by state and county. California properties show lower effective rates due to Proposition 13's 1% cap on assessed value. Property tax sits with the owner; long-term tenants do not pay it.
Local regulations
Permit required ($404) in Dallas. Dallas passed ordinances in 2023 banning short-term rentals in single-family residential zones and requiring annual registration ($404). However, enforcement is blocked by a court injunction (appealed to Texas Supreme Court, pending as of Feb 2026). Short-term rentals continue to operate during the injunction. Hotel occupancy tax collection is required.
Sampling and data sources
Short-term rental yield figures reflect properties currently listed on short-term rental platforms. In high-tourism markets, listings tend to concentrate in central postcodes, which can pull city-median yields above what residential areas of the same city would achieve. Yields for any specific suburb may differ significantly from the city-wide median.
For metric definitions and broader methodology, see the About page.