To thrive in almost any modern industry, you’re going to need some form of data. It’s no different when it comes to the vacation rental industry. In fact, the best answer to how to invest in Airbnb rental property is USE AIRBNB DATA.
As an Airbnb real estate investor, you can’t just choose a cozy little vacation home on the beach and assume it’ll make for a great investment strategy. It just doesn’t work like that. You need to know whether or not it’s going to give you a good return on investment (ROI) and Airbnb data will help you figure that out. Of course, you can’t just use any form of Airbnb rental data from any source.
Related: Airbnb Rental Data: Why Investors Need It Now More Than Ever
Now, you always have the option to spend hours looking for the data online on your own, organizing it into analysis spreadsheets and updating them for different Airbnb investment opportunities. But if that sounds like a lot of unnecessary (and outdated) work to you, that’s because it is. A short-term rental investor needs to know precisely what data to look at and where to get it in order to pounce on opportunities as quickly as they appear in the market. That’s exactly what I’m going to walk you through today.
The Different Types of Airbnb Data Every Real Estate Investor Needs
#1. Real Estate Market Data
Data and analytics on the Airbnb location of your choice are so important to the success of your rental property business. Once you study up on Airbnb regulations and find a few locations where non-owner occupied rentals can operate legally, check to see what the state of the tourism industry is like. A quick Google search can provide tourism stats for most popular Airbnb cities across the US housing market.
Once that is done and you have further narrowed down your list of Airbnb locations, it’s time to look at the analytics for local investment properties of this kind. You’ll need the following Airbnb data on both the city level and the neighborhood level:
- Median Listing Price
- Average Airbnb Occupancy Rate
- Monthly Airbnb Rental Income
- Average Airbnb Return on Investment (Cash on Cash Return and Cap Rate)
Where Can I Get It All?
If you want to find accurate and reliable Airbnb data analytics for different cities, turn to Mashvisor’s real estate investment blog. There, we not only present you with the data you need to make a sound choice of where to invest in real estate, but we also update you on new Airbnb laws and regulations. Check out the 8 Best Cities for Airbnb Investment in 2019 where short-term rentals are legal and profitable.
For 2020, these are the best cities for Airbnb investment (based on cash on cash return) where non-owner occupied rentals are legal:
1. Tuscaloosa, AL
- Airbnb Cash on Cash Return: 17.5%
- Airbnb Occupancy Rate: 40.9%
- Airbnb Rental Income: $4,880
- Median Property Price: $294,300
- Price per Square Foot: $172
- Listings for Sale: 116
- Airbnb Listings: 225
- Walk Score: 48
2. Trenton, NJ
- Airbnb Cash on Cash Return: 16.4%
- Airbnb Occupancy Rate: 56.4%
- Airbnb Rental Income: $2,200
- Median Property Price: $163,500
- Price per Square Foot: $109
- Listings for Sale: 216
- Airbnb Listings: 55
- Walk Score: 67
3. South Bend, IN
- Airbnb Cash on Cash Return: 16.1%
- Airbnb Occupancy Rate: 41.5%
- Airbnb Rental Income: $2,920
- Median Property Price: $145,800
- Price per Square Foot: $85
- Listings for Sale: 172
- Airbnb Listings: 284
- Walk Score: 80
4. Paducah, KY
- Airbnb Cash on Cash Return: 16.1%
- Airbnb Occupancy Rate: 44.8%
- Airbnb Rental Income: $3,140
- Median Property Price: $205,900
- Price per Square Foot: $91
- Listings for Sale: 199
- Airbnb Listings: 53
- Walk Score: 47
5. Abilene, TX
- Airbnb Cash on Cash Return: 16.1%
- Airbnb Occupancy Rate: 59.7%
- Airbnb Rental Income: $3,560
- Median Property Price: $236,800
- Price per Square Foot: $111
- Listings for Sale: 585
- Airbnb Listings: 71
- Walk Score: 30
What about neighborhood data? You can find this on our blog as well, as we typically list the best neighborhoods in different cities for owning an Airbnb investment. But, you might want to turn to Mashvisor’s Heatmap Analysis Tool instead.
Once you decide where you want to buy an investment property, you can analyze different neighborhoods based on the Airbnb analytics listed above using the appropriate filters. That way, you can easily find a neighborhood with say, cheap investment property for sale that promises high Airbnb returns. Want to try it out?
#2. Rental Property Data
Now that you have looked at all the data necessary to find one of the most profitable Airbnb locations, it’s time to find the best rental property. There are 7 types of data a real estate investor needs for this. But before we get into each one, let’s answer this question first:
Where Can I Get It All?
Luckily for you, along with the real estate market data, everything you need to know about the performance of an Airbnb rental property can be found here at Mashvisor. Mashvisor is the Best Airbnb Analytics Platform in 2019! Keep reading to learn why our platform boats this title.
Airbnb Occupancy Rate Data
The occupancy rate is the beating heart of your Airbnb rental property business. If it’s low, you may be able to charge a high enough rental income to produce positive cash flow. But if it’s really low, you’re probably out of luck. No amount that you choose to charge will make sense in your pricing strategy for such a vacation rental whose occupancy rate is so low to begin with (unless it’s a luxury rental). You’ll be left with a vacation property that’s bleeding money. So having Airbnb occupancy rate data for individual rental properties in the market is really important.
For every rental property on Mashvisor’s platform, you can find occupancy rate data. The Airbnb analytics are based on rental comps in the market. Because the platform is interactive, the Airbnb occupancy rate can be adjusted to see the kind of ROI you will get. This is especially helpful when you find a real estate investment opportunity to buy a property where you know you can increase the Airbnb occupancy rate easily by either improving the property or taking the management to the next level.
Related: What Kind of Airbnb Occupancy Rate Can You Expect in 2019?
Data on Airbnb Costs and Fees
Found a short-term rental property that will see plenty of bookings throughout the year? Now you need to factor in the costs before you can set a proper rental rate. Mashvisor’s Airbnb profit calculator provides estimates for rental property expenses. And again, because this investment calculator is interactive, you can adjust any of the Airbnb costs and fees based on your own research later on. You’ll even be able to add any extra costs that are unique to you. But it’s good to start with basic estimates to know whether or not you should take the time to do the research and talk to local property managers or real estate agents at a later stage in the buying process.
Airbnb Rental Income Data
Trying to figure out how much to charge for rent? That’s why you need Airbnb data on rental income. You probably know that you can’t just set whatever rental rate you want. A lot goes into the property pricing strategy- checking local rental listings, performing a CMA using Airbnb comps, and factoring in expenses and occupancy rate. Why look for all of that manually when an Airbnb rental income calculator has it all plus it provides rental income estimates based on that data for every listing?
Monthly Airbnb Profit Margin and Cash Flow
You have the data on the Airbnb costs and rental income estimates all in one place. Still, you don’t have to manually calculate your expected monthly profit margin. All of the Airbnb data is put to work in the calculator and, just by clicking on a listing you’re interested in, you can tell whether or not it will generate positive cash flow as a vacation rental!
Airbnb Return on Investment Data
This is the Airbnb data you really need. Calculating return on investment can be difficult when you’re still in the initial stages of your property search. Not only do you have to gather different types of data (that all need to be accurate) but you’ll have to deal with deceptively simple formulas which are actually prone to giving false results if dealt with manually. I’m talking about the cash on cash return and cap rate calculations.
Mashvisor’s Airbnb profit calculator uses all the available data to return useful metrics like the CoC return and cap rate. For CoC return, specifically, you can even use the built-in mortgage calculator which can be adjusted to account for the loan type, term, interest rate, and down payment to see your unique Airbnb ROI.
Remember those spreadsheets I mentioned? Some real estate investors spend a lot of time gathering short-term rental data on comps and putting them into these sheets. You need Airbnb comps for everything from determining property value to setting the right rental rate. So it makes sense that Airbnb investors would go through all of this trouble, but they don’t have to with Mashvisor. Just like all of the other Airbnb data listed above, Airbnb comps are readily available for every listing on the platform.
Data on Airbnb Reviews
Airbnb hosts know that reviews matter. Good ones can boost your occupancy rate and bad ones can ruin your business. So while a lot of hosts go looking for tips on how to get glowing Airbnb guest reviews, as a real estate investor, you should look at the review data first. Mashvisor uses Airbnb predictive analytics to help you know how many positive reviews you’ll need to actually increase your occupancy rate. That way, if you have found a short-term rental property with low occupancy rate and your business plan includes increasing it, you’ll have a good idea of how many reviews you need to get you there. That’s just a small glimpse of the power of predictive analytics!
Final Thoughts on Airbnb Data
You need it to ensure you buy a profitable Airbnb rental property! And now you know exactly what you need and where to get it. Want it all for 20% off?