Data analysis is one of the essential components of real estate investment assessment. This is due to the fact that it removes subjectivity from the process. One type of real estate investment that relies heavily on data analysis is short term rental property. In this article, we will go over Airbnb data analysis and show you how to use it to great effect.
The Importance of Airbnb Data Analysis
Making money in real estate requires identifying great investment opportunities. Moreover, the risks that come with them have to be mitigated. The only way to achieve this is by using tangible data that paints an accurate picture of the investment’s viability. Needless to say, making investment decisions based on gut feeling won’t yield the same results. Here are some of the key aspects that highlight the importance of Airbnb analytics.
Related: Lower the Risk of Investing in Property with Real Estate Data
1- Data analysis allows you to find the best neighborhoods for short term rentals
The first part of buying an Airbnb property is finding an ideal neighborhood for short term rentals. The process requires analyzing several metrics. This includes checking the average Airbnb rental income of various neighborhoods. Furthermore, looking at Airbnb occupancy rate data in each area will help you identify the best location to invest in.
2- Data analytics helps minimize risk
As is the case with any real estate venture, Airbnb real estate investing is not without risks. Several things can go wrong before you can start generating positive cash flow. In fact, a few bad decisions can send your investment spiraling downward fairly quickly. One of the best ways to mitigate this risk is by using data analytics. Airbnb rental data can help you estimate the return on investment that you can expect from a given rental property. More importantly, this data will help you avoid investment properties that are not able to generate consistent income.
Related: 10 Major Risks of Real Estate Investing and How to Reduce Them
3- Airbnb data analysis enables you to identify untapped markets
One of the keys to success in real estate investing is getting in early and riding an upward trend. This requires the ability to identify the signs of a promising housing market. This is where data analytics comes in. By conducting a thorough Airbnb data analysis that incorporates rental data and cost projections, real estate investors should be able to find a nascent market that is on the cusp of a surge. Investing in such real estate markets can yield a staggering return on investment and provide you with a lead over your competitors.
Related: These Are the Features of the Best Places to Invest in Real Estate
How to Do Airbnb Data Analysis with Mashvisor
Mashvisor puts a host of analytics tools at your disposal. These tools are easy to use and are very effective in giving you a metric-driven look at real estate investments. Let’s delve into how you can do Airbnb data analysis with Mashvisor when you’re looking for an Airbnb investment property.
1- Identify great investment opportunities with the Property Finder
The Property Finder is a great tool that incorporates a wide range of Airbnb dataset. It factors in your rental strategy and budget when sifting through Airbnb rental listings and finds you the investment properties that are best suited to your needs. It lists the top results based on the cash on cash return rate. This tool owes its effectiveness to an advanced machine learning algorithm that does all the heavy lifting for the user. Additionally, the Property Finder can search through multiple cities at once, which saves you both time and effort.
2- Assess the potential of an investment property with the Airbnb Profit Calculator
This is without a doubt the most effective Airbnb analytics tool on the market. The Airbnb Profit Calculator has many functions. It calculates critical metrics such as the Airbnb occupancy rate. The tool also has an Airbnb Heatmap feature that allows you to filter neighborhoods based on the performance of their income property listings.
Another great feature of the Profit Calculator is the interactive interface. Real estate investors can use it to see how different variables affect their investment. These variables include expenses such as interest rates and mortgage payments. The impressive thing is that the tool is as effective as it is intuitive and easy to use.
3- Gain access to Airbnb comps on the Mashvisor platform
Rental comps refer to a set of data that helps real estate investors assess and price an Airbnb investment property. More specifically, the data is used as a comparison point for properties that are relatively similar. This is can be part of your overall neighborhood analysis since these properties tend to be located in the same area. The metrics that are used in rental comps include occupancy rate, rental income, listing price, and any other metric that pertains to short term rental strategies. As part of your Airbnb data analysis, you can easily check rental comps right here on Mashvisor. The data can be accessed through any neighborhood analytics page on the site or investment property listing.
Other Considerations When Analyzing Airbnb Investment Properties
As effective as Airbnb data analysis is, your strategy shouldn’t rely on it exclusively. In fact, data is far from being the only aspect of real estate analysis. There are some additional steps that can complement your data analysis. For example, you can retain the services of a professional appraiser to get the most accurate valuation possible. You can also consult with a trusted realtor to make sure that your data analysis reflects real market trends.
The Bottom Line
Doing an in-depth Airbnb data analysis is the first step to securing a good Airbnb return on investment. While tackling the process manually might be doable, there is no substitute for effective tools like the ones Mashvisor offers. Including Mashvisor’s data analytics in your investment approach will make owning an Airbnb a profitable and risk-free venture.
Want access to all our tools? Then click here to start your 14-day free trial with Mashvisor and take your Airbnb data analysis to the next level! Also, be sure to check out the Mashvisor Blog to learn more valuable tips that can help you maximize your Airbnb investment.