Airbnb data analysis plays a very important role when investing in vacation rental properties. Investors should not take it for granted.
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Many people considering getting into the short-term rental market should never skip conducting Airbnb data analysis when performing their due diligence. Getting a highly accurate analysis of Airbnb data can spell the difference between success and failure in an Airbnb business.
In this article, we will define what Airbnb data analysis is, why it is important, and give you some fairly simple, easy-to-follow steps in performing your own Airbnb analysis.
Analyzing Airbnb Data
Investing in real estate comes in several different forms. Some investors have struck gold with house flipping, while others have grown quite comfortable with microflipping. Others prefer to just go the low-maintenance route and put their money in REITs and real estate crowdfunding. And then there are those brave souls who like the thrills of getting into the rental property aspect of real estate investing.
Why Is Airbnb Data Analysis Important?
Investing in rental properties is a good way of generating additional income (as long as you’re in the right location, of course). However, much to the disappointment of many investors, it is not as low-maintenance as one would expect. It requires absolute dedication to know the market inside and out, as well as staying on top of things throughout the entire rental duration.
Traditional rental property owners have it slightly easier as they only need to check in on their tenants and properties once in a while. The tenants take care of the utilities, and the landlords use the rental payments to pay off the property and other maintenance issues. As far as data analysis is concerned, they only need to check in periodically (mostly before a lease expires) to ensure that their rates are still competitive in the market they’re in.
Another rental strategy that’s quite popular right now is vacation rental properties. They are investment properties bought with the sole intention of getting them listed as short-term rentals on online platforms like Airbnb. The Airbnb platform is basically just a vacation rental marketplace that connects guests and travelers to vacation rental owners or Airbnb hosts for more affordable alternatives to hotels.
However, as popular and as lucrative Airbnb investments are, things are a bit more challenging and complicated for Airbnb hosts and owners. On top of the regular maintenance concerns and transitional matters, they also need to be on top of promoting and marketing their property to attract more guests. Since the success of their businesses lies heavily on occupancy rate, they need to constantly market the property and keep up to date with current neighborhood data and trend changes. Doing so ensures they don’t get left behind and stay in the game.
Thus, Airbnb data analysis is a game-changer for a vacation rental property owner. The process makes investors aware of the current market conditions and gives them a greater understanding of the location they’re considering or are already in. The data they gather can then be used for Airbnb data analytics to see if a particular property or neighborhood is worth investing in or if they should just look for another property elsewhere.
It is why highly accurate Airbnb market data can make all the difference for an investor. Imagine if your data source is unable to provide enough information for you to make a wise investment decision. That’s a pretty big risk to take. You can probably strike gold and do fairly well for the rest of your life, or you can end up losing all your hard-earned money on the wrong investment property.
Your data source is very important to your rental business’ success. Fortunately, the real estate website Mashvisor exists for this very reason. The site houses a very large database of almost every US real estate market that is updated regularly to make Airbnb data analysis as accurate as possible.
The site provides all the necessary information and real-time market data investors need, such as Airbnb cap rate, Airbnb bookings data, and Airbnb occupancy rate data, among others. It also includes all the similar information for traditional rental properties, which takes one’s feasibility study up a notch. Accessing both types of data on hand can help investors choose which rental strategy works best for a particular income property.
Related: What Does Airbnb Stand For? The Complete Beginner’s Guide
Performing Airbnb Data Analysis in 6 Simple Steps
For real estate investors seriously considering investing in Airbnb properties, using Mashvisor for Airbnb data analysis will help make the process quicker and more efficient. Here are some easy-to-follow steps when working on data analysis for vacation rentals:
Step 1: Spot the Most Ideal Investment Opportunities With the Property Finder
If you’re searching for a wide range of Airbnb datasets, look no further than Mashvisor’s Property Finder tool. It provides all the information you will need, like Airbnb booking data, to accurately analyze any prospective rental property in any neighborhood.
The Property Finder tool also allows users to look for properties that are well within their financial capacity as it factors in their budget and rental strategy as they sift through the different properties. One of the tool’s most useful features is it lists top results based on cash on cash returns. Additionally, the tool allows users to perform property searches in multiple markets simultaneously.
Step 2: Perform a Neighborhood Evaluation With the Neighborhood Analysis Tool
If you already have a specific market in mind, Mashvisor allows users to perform a thorough neighborhood analysis to give them a better insight into the market they’re considering.
Some things to consider when performing a neighborhood evaluation are the following:
- There is access to certain tourist attractions and public amenities that draw in plenty of renters and guests;
- Neighborhoods have a high walk score;
- Shopping malls, supermarkets, coffee shops, and restaurants are within reasonable distance;
- Public transportation and safe parking spots are accessible;
- There are few or no distressed and foreclosed properties on one street; and
- Avoid locations with plenty of closed businesses and underdeveloped areas.
The general rule of thumb to remember is that you, as an investor, feel comfortable with the neighborhood you’re considering. It should make you feel safe and secure that your property is in a fairly decent and desirable neighborhood.
Step 3: Assess a Property’s Profitability With the Airbnb Property Calculator
Perhaps, the most important aspect of Airbnb data analysis is the actual computation of numbers to determine whether a property is worth investing in or not. It is where Mashvisor’s Airbnb calculator comes in handy. The tool allows users to calculate critical Airbnb metrics such as occupancy rate and Airbnb cash flow. It also comes with a heat map feature that allows users to filter their searches based on the listed properties’ current market performance.
The tool is also highly interactive as it gives investors the most accurate results whenever different variables are entered into the system. The real-time adjustments are very helpful in determining the actual expected costs and the projected income.
Mashvisor’s Rental Property Calculator lets investors calculate important Airbnb metrics such as cash flow, Airbnb cash flow, cap rate, and occupancy rate.
Step 4: Use the Platform to Access Current Airbnb Rental Comps
The platform also gives users easy access to updated traditional and vacation rental comps in any given market and neighborhood. The rental comps information is extremely valuable to any rental property investor as it gives them a realistic view of what they can expect in terms of costs, expenses, and income. The data can be accessed on Mashvisor’s Neighborhood Analytics page.
Step 5: Estimate and Establish Your Airbnb Rental Rate
Using the rental comps, you can easily see what the going rates are for your property to be competitive in the local market. Once you’ve studied the different similar rental properties, you can come up with a fair enough price that will allow you to get in the game and not be left behind by the competition.
It is important to note that generally, rental rates are computed according to square footage. Calculate the cost of comparables on a per square foot basis to get a pretty good idea of potential Airbnb nightly rates. Make sure to also factor in all the costs and expenses related to the acquisition and maintenance of the property to determine its viability.
Step 6: Make Sure to Always Double-Check the Numbers Before Making a Final Decision
Lastly, whenever possible, always double-check your data and computations. A slight miscalculation can lead to catastrophic results. Missing a single digit or misplacing a decimal point will lead to a very large difference between the actual results and your computations. So, make double-checking data, formulas, and computations a habit.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Mashvisor’s Airbnb Rental Market Data
Now that you already know how to use Mashvisor for your Airbnb data analysis, let’s take a look at the top Airbnb rental markets according to the website’s latest data.
Related: How to Find Reliable Airbnb Rental Data in 2022
Top 10 Rental Markets for Airbnb Rentals
Two of the main identifiers used to prepare the list below are the number of Airbnb listings on the market and the cash on cash return rate. Although there are numerous other markets that offer higher cash on cash returns, we only included the top markets with above 100 Airbnb listings as they provide more samples for accurate Airbnb comps.
1. State College, PA
- Median Property Price: $603,649
- Average Price per Square Foot: $248
- Days on Market: 198
- Number of Airbnb Listings: 269
- Monthly Airbnb Rental Income: $7,842
- Airbnb Cash on Cash Return: 8.68%
- Airbnb Cap Rate: 8.80%
- Airbnb Daily Rate: $494
- Airbnb Occupancy Rate: 52%
- Walk Score: 94
2. Bushkill, PA
- Median Property Price: $333,500
- Average Price per Square Foot: $158
- Days on Market: 50
- Number of Airbnb Listings: 109
- Monthly Airbnb Rental Income: $4,327
- Airbnb Cash on Cash Return: 8.05%
- Airbnb Cap Rate: 8.26%
- Airbnb Daily Rate: $329
- Airbnb Occupancy Rate: 52%
- Walk Score: 0
3. Coachella, CA
- Median Property Price: $373,889
- Average Price per Square Foot: $261
- Days on Market: 113
- Number of Airbnb Listings: 111
- Monthly Airbnb Rental Income: $4,677
- Airbnb Cash on Cash Return: 7.91%
- Airbnb Cap Rate: 8.07%
- Airbnb Daily Rate: $597
- Airbnb Occupancy Rate: 38%
- Walk Score: 63
4. Nashville, IN
- Median Property Price: $432,940
- Average Price per Square Foot: $276
- Days on Market: 82
- Number of Airbnb Listings: 156
- Monthly Airbnb Rental Income: $4,639
- Airbnb Cash on Cash Return: 7.86%
- Airbnb Cap Rate: 8.05%
- Airbnb Daily Rate: $276
- Airbnb Occupancy Rate: 59%
- Walk Score: 56
5. Berkeley Springs, WV
- Median Property Price: $406,731
- Average Price per Square Foot: $199
- Days on Market: 74
- Number of Airbnb Listings: 144
- Monthly Airbnb Rental Income: $4,146
- Airbnb Cash on Cash Return: 7.61%
- Airbnb Cap Rate: 7.79%
- Airbnb Daily Rate: $215
- Airbnb Occupancy Rate: 67%
- Walk Score: 5
6. White Settlement, TX
- Median Property Price: $250,505
- Average Price per Square Foot: $173
- Days on Market: 6
- Number of Airbnb Listings: 107
- Monthly Airbnb Rental Income: $3,207
- Airbnb Cash on Cash Return: 7.54%
- Airbnb Cap Rate: 7.80%
- Airbnb Daily Rate: $145
- Airbnb Occupancy Rate: 61%
- Walk Score: 42
7. Wisconsin Dells, WI
- Median Property Price: $277,233
- Average Price per Square Foot: $165
- Days on Market: 33
- Number of Airbnb Listings: 278
- Monthly Airbnb Rental Income: $3,176
- Airbnb Cash on Cash Return: 7.50%
- Airbnb Cap Rate: 7.76%
- Airbnb Daily Rate: $341
- Airbnb Occupancy Rate: 46%
- Walk Score: 69
8. Luray, VA
- Median Property Price: $480,243
- Average Price per Square Foot: $209
- Days on Market: 223
- Number of Airbnb Listings: 212
- Monthly Airbnb Rental Income: $4,562
- Airbnb Cash on Cash Return: 7.44%
- Airbnb Cap Rate: 7.62%
- Airbnb Daily Rate: $272
- Airbnb Occupancy Rate: 60%
- Walk Score: 52
9. Sweetwater, FL
- Median Property Price: $431,111
- Average Price per Square Foot: $353
- Days on Market: 55
- Number of Airbnb Listings: 319
- Monthly Airbnb Rental Income: $4,717
- Airbnb Cash on Cash Return: 7.30%
- Airbnb Cap Rate: 7.46%
- Airbnb Daily Rate: $154
- Airbnb Occupancy Rate: 56%
- Walk Score: 82
10. Broadview, IL
- Median Property Price: $253,900
- Average Price per Square Foot: $211
- Days on Market: 65
- Number of Airbnb Listings: 249
- Monthly Airbnb Rental Income: $3,336
- Airbnb Cash on Cash Return: 7.19%
- Airbnb Cap Rate: 7.42%
- Airbnb Daily Rate: $128
- Airbnb Occupancy Rate: 64%
- Walk Score: 61
Related: Where Can You Get the Most Reliable Airbnb Data by City in 2022?
Wrapping Up
Being able to access the right tools and up-to-date data will make Airbnb data analysis highly accurate and give an investor greater confidence in the decision-making process. Investors who are serious about starting a rental property business should take the matter seriously, as it can make or break their business venture.
To get access to Mashvisor’s real estate investment tools, click here to sign up for a 7-day free trial today, followed by 15% off for life.
