Airbnb provides an excellent opportunity for investors to make money in real estate. For those looking to get into Airbnb real estate investing, if you play your cards right, you can reap good returns.
One advantage of this investment strategy is that Airbnb hosts are allowed to set their own prices for their listings. However, this does not mean that setting the highest rental rate will bring you the highest rate of return.
To keep your Airbnb occupancy rate high, you need to set the right price through Airbnb price prediction. Why? Well, if you set a very high rental rate, no one will book your listing. On the other hand, if the price is too low, you won’t be able to make enough Airbnb rental income to cover your expenses and generate a good return on investment.
It’s important to get your Airbnb pricing right, particularly in competitive real estate markets where a small difference in rental rates can affect your occupancy rate. Your aim is to not charge too high or too low. Knowing how much to charge for rent is, therefore, critical if you want to maximize your return on investment.
Finding the right price for your Airbnb investment property requires a thorough real estate market analysis and collection of Airbnb data.
But what’s the best way to know how much to charge for rent? Use the latest real estate technology! The purpose of this blog is to show real estate investors how they can efficiently conduct Airbnb price prediction using AI. If you want to learn why and how you can use AI for Airbnb price prediction, keep reading.
AI for Airbnb Price Prediction
Considering the amount of research needed, Airbnb price prediction can be a challenging task for a beginner real estate investor. However, this problem can be solved using machine learning algorithms.
Even so, many real estate investors are finding it difficult to find the right software to use for Airbnb price prediction. So, in this blog, we will be focusing on the best software for real estate investors: Mashvisor.
Mashvisor’s Airbnb analytics will help you predict your future Airbnb rental income and whether or not it will be enough to cover your Airbnb rental costs and gain a profit.
Using Mashvisor’s Real Estate Heatmap
The first step of Airbnb price prediction is to get an idea of the price you can charge for rent by looking at the average rents in the neighborhood. This is especially important if you haven’t bought an investment property yet and are looking for Airbnb for sale.
While the average Airbnb rental rate of the city may be optimal, the rental price for the neighborhoods may vary considerably. Thus, the neighborhood average would be a better indicator of the rental price.
The best AI tool to use for accurate prediction of the average Airbnb rental income for neighborhoods is Mashvisor’s real estate heatmap. This tool uses visual cues and numerical data to show the performance of neighborhoods based on selected filters.
Mashvisor’s Real Estate Heatmap
To view Mashvisor’s Airbnb price predictions, you simply type in the name of your city. You can then select the Airbnb rental income filter. Neighborhoods where Airbnbs produce a high Airbnb rental income will be highlighted in green. You can click on any neighborhood that interests you to view the Airbnb rental income data.
If you already own an Airbnb and want to know the average Airbnb rental income in the neighborhood, you can type the name of the neighborhood in the search bar. Rather than using the heatmap to compare neighborhoods, you can jump right into looking at the stats for your neighborhood of choice.
Not only will you see the average Airbnb rental income, but you’ll also get key data like the average Airbnb occupancy rate, cash on cash return, and even the Walk Score.
Using Mashvisor’s Airbnb Investment Calculator
Knowing the average Airbnb rental income of the neighborhood is only step #1 for accurate Airbnb price prediction. After knowing the neighborhood performance in terms of Airbnb rental income, you should also do a rental market analysis. This involves looking at the rental income of other similar investment properties in the area currently rented out (rental comps).
Here are some features to focus on when gathering rental comps:
- Location (city & neighborhood)
- Property type
- Year of construction
- Number of bedrooms and bathrooms
- Number of floors
- Square footage
- Parking availability
- Access to public transportation and amenities
These factors, and more, will influence the rental rate of a rental property. Having a rental rate similar to those in your neighborhood or slightly lower can maximize your Airbnb occupancy rate and minimize your vacancy rate.
Of course, if your Airbnb property offers a little more than the comps (an extra bedroom, a pool, etc.), then you can charge more. Thus, Airbnb price prediction will help you to be competitive in the local housing market.
Conducting such an analysis manually can take you weeks. Walking neighborhoods, gathering Airbnb data, and doing Airbnb data analysis using spreadsheets is not optimal in the 21st century.
However, you can quickly and efficiently estimate Airbnb income for Airbnb rental properties in the US housing market using Mashvisor’s Airbnb profit calculator. This Airbnb pricing tool allows you to look up Airbnb comps for a neighborhood. All these comps come directly from Airbnb.com.
Although you can personally take a look at the comps and conduct your own Airbnb price prediction, Mashvisor’s Airbnb calculator actually does it automatically for you. If you’re still hunting for rental property, every listing is accompanied by a comparable Airbnb rental income. That way, you will know how much money a property for sale will generate as an Airbnb before purchasing.
And if you already own an Airbnb rental property, you can actually add your listing to Mashvisor. This will allow the calculator to generate an Airbnb price prediction for your rental in seconds based on rental comps!
Apart from Airbnb rental income, Mashvisor’s Airbnb investment calculator also provides investors with predictions for key investment metrics:
- Cash flow
- Cap rate
- Cash on cash return
- Airbnb occupancy rate
Mashvisor’s Airbnb Investment Calculator
The Bottom Line
If you have purchased an Airbnb or are still searching for one, using AI is a smart Airbnb price prediction strategy. AI price prediction is not only easier but also more accurate. Mashvisor’s tools use up-to-date and reliable Airbnb data. With Mashvisor’s real estate investment tools, you can know what to charge for rent in a matter of minutes. This will help you enjoy a high occupancy rate and maximize your rental income.
To start using Mashvisor, click here.