Are you looking to invest in short-term rentals in 2022? If you are just getting started, you might be asking yourself, “Is Airbnb profitable?” The short answer is YES. An Airbnb rental calculator will be a helpful tool in determining your future profits.
Becoming an Airbnb host is one of the best ways to make money in real estate. Generally, short-term rentals generate more annual revenue than traditional rentals. Furthermore, Airbnb CEO Brian Chesky recently announced that millions of new Airbnb hosts would be needed in the coming months as travel resumes.
However, it is common knowledge that not all Airbnb properties generate good returns. If you want to earn a respectable Airbnb host income, you need to forecast your potential returns before buying an Airbnb investment property. The best way to do so is to use Mashvisor’s Airbnb estimator.
In this article, we will discuss how Mashvisor’s Airbnb calculator can help real estate investors make better investment decisions and beat the competition in 2022. So keep reading.
What Is an Airbnb Estimator?
An Airbnb income estimator is a variation of the investment property calculator (also known as a rental property calculator) that helps investors conduct Airbnb investment property analysis. Mashvisor’s Airbnb rental calculator uses reliable Airbnb data and analytics to accurately analyze the profitability of Airbnb investment opportunities in the US housing market.
The Airbnb data provided by the Mashvisor real estate investment tools comes straight from Airbnb.com. So, you don’t need to spend weeks gathering Airbnb data and making projections on spreadsheets. All the critical Airbnb data and analysis you need to make smarter Airbnb investment decisions can be found using Mashvisor’s Airbnb estimator in a matter of minutes.
Related: Where to Get Reliable Airbnb Data
What Airbnb Estimates Does the Airbnb Calculator Provide?
Mashvisor’s Airbnb estimator provides investors with a wide range of Airbnb big data and Airbnb analytics that you need to find the best Airbnb investment property for sale.
Here is a list of the Airbnb data and analytics that you can access with our Airbnb revenue calculator:
1. Airbnb Occupancy Rate
For you to generate a steady rental income and become successful as an Airbnb host, you need to ensure that your occupancy rate stays high throughout the entire year. Vacation rentals tend to experience fluctuations in bookings due to seasonality, which is usually unique to each short-term rental market. It is particularly important if you’re doing rental arbitrage, where long-term vacancies can burn a large hole in your pocket.
Therefore, to determine the expected Airbnb rental income of an investment property, it’s crucial to know the Airbnb occupancy rate through an Airbnb rental property calculator. The higher the Airbnb occupancy rate, the more Airbnb rental income you’ll be able to generate each month. If you’re looking to boost your occupancy rate, there are several ways to do so.
You can start by optimizing your rental rates, which means adjusting them according to season. You can raise your rates during the peak season, when demand is high. Conversely, you can charge less during the lean months to attract hesitant vacationers and travelers.
In addition, you can highlight the best amenities of your rental property to convince even the sophisticated traveler to book a stay. Adding professional photos to your listing also goes a long way toward attracting potential guests. Lastly, don’t forget to leverage social media marketing by sharing useful and engaging information about your Airbnb rental on Facebook, Instagram, Twitter, etc.
A high Airbnb income will ensure that you are covered during the off-season and that you avoid cash flow problems. Mashvisor’s Airbnb estimator provides investors with Airbnb occupancy rate estimates based on the performance of comparable rental properties in the area.
Related: What Airbnb Occupancy Rate Can You Expect in 2022?
2. Airbnb Rental Income
Airbnb rental income is a very important figure for investors as it determines the potential cash flow and return on investment. For any property listed on the Mashvisor online property marketplace platform or any off market property whose address you enter, our revenue estimator will provide highly accurate estimates of potential Airbnb rental income. The rental estimate is based on the Airbnb daily rate and Airbnb occupancy rate of comparable short-term rental listings in the neighborhood (Airbnb rental comps).
Apart from calculating Airbnb cash flow and return on investment using the Airbnb rental income calculator, investors can use the said data to determine how much to charge for rent. Our rental income calculator also provides rental income estimates for traditional properties. Our tool allows you to easily compare the profitability of the two rental strategies. Also, it helps determine the optimal rental strategy in terms of rental income.
Related: 50 Cities with the Highest Average Airbnb Daily Rate in 2022
3. Airbnb Rental Expenses
When it comes to real estate investing, spending money is a must. You need to spend money to make money. Having an estimate of expected Airbnb rental costs will help you be prepared before you buy Airbnb property. The estimates are also useful in calculating expected cash flow and return on investment.
Mashvisor’s Airbnb rental calculator provides you with a list of the major one-time startup costs related to owning an Airbnb property, including repairs and inspections. In addition, you can factor in monthly recurring rental expenses such as insurance and HOA dues. You can also add personalized expenses to further customize your computation. Mashvisor will show a total for each of the categories.
Airbnb rental expenses that are readily available on Mashvisor’s Airbnb estimator include:
One-Time Startup Costs
- Inspections
- Closing costs
- Total repair costs
- Furniture and appliances
Monthly Expenses
- Property tax
- Rental income tax
- Insurance
- Property management
- HOA dues
- Property maintenance
- Cleaning fees
- Utilities
As an Airbnb owner, you’ll typically incur more recurring costs than a traditional rental owner or a landlord. Some of the expenses may not be included in the Airbnb rental calculator. The good thing about our rental income calculator is that it allows you to modify the provided expenses and add custom costs as you see fit.
4. Airbnb Cash Flow
Mashvisor’s Airbnb Estimator
Airbnb cash flow is the difference between monthly Airbnb rental income and monthly expenses. As a beginner real estate investor, it is recommended that you focus on positive cash flow properties. A positive cash flow property will pay for itself and provide you with a consistent income stream every month.
To ensure you only invest in a positive cash flow property, conducting a cash flow analysis is important before making a purchase. Our Airbnb profitability calculator provides you with readily calculated Airbnb cash flow estimates for any property you analyze.
Related: 5 Best Tips to Boost Your Real Estate Cash Flow Today
5. Airbnb Cap Rate
Capitalization rate, or cap rate, is a return on investment metric that real estate investors use to quickly compare the profitability of investment opportunities without taking into account the financing method. It helps investors analyze a rental property’s ROI compared to its value. To calculate the cap rate for a given property, use the following formula:
Cap Rate = (Annual Net Operating Income / Property’s Price) x 100
The cap rate formula is fairly simple. However, calculating the Airbnb cap rate can be time-consuming and tedious if you analyze several income properties for sale all at the same time. Fortunately, you can access readily-calculated cap rate estimates on our Airbnb estimator.
6. Airbnb Cash on Cash Return
Airbnb cash on cash return is another key return on investment metric. Cash on cash return – also referred to as CoC return, cash yield, or equity dividend rate – shows the potential earnings an investor can expect from a property. The CoC formula is given below:
Cash on Cash Return = (Net Operating Income / Total Cash Invested) x 100
But unlike the Airbnb cap rate, this metric takes the financing method into consideration. If you are financing your purchase with a real estate investment loan, your Airbnb property analysis is not complete without calculating Airbnb cash on cash return. If you don’t know how to calculate it, don’t worry. With our Airbnb income calculator, you have it pre-calculated for you.
Related: The 30 Most Profitable Airbnb Locations: Cash on Cash Return
7. Airbnb Rental Comps
When you decide to invest in Airbnb property, one important question to answer in order to maximize your rate of return is, “How much should I rent my house for?.” To get an answer to this question, you need to conduct a detailed rental market analysis. It involves running Airbnb rental comps, which means Airbnb rentals in the area that are as similar as possible to the one you are considering buying or already own.
While there are different ways to find rental comps, the easiest and fastest way is to use Mashvisor’s Airbnb price estimator. The tool provides you with a list of active Airbnb rental comps for each property on the platform. You’ll be able to see how the rental comps are performing in terms of nightly rate, rental income, occupancy rate, and rating.
With the information from the Airbnb rental price calculator, you can determine how much you can charge in terms of Airbnb rent to maximize your occupancy rate and rental income. If you want to be competitive in the local Airbnb rental market, running Airbnb rental comps is a must in 2022.
Related: The Best Rental Comp Software
Conducting a detailed rental market analysis involves running an Airbnb rental comps and helps real estate investors become competitive in the local market.
8. Financing Method
Before you purchase an Airbnb rental property, you should keep in mind that your financing method will significantly impact your cash flow and return on investment. Therefore, it is crucial to understand the different financing options available to you and determine which method works best for your investment property.
If you want to know if your method of financing will yield a good ROI, our Airbnb estimator comes with an inbuilt mortgage calculator. You simply enter your mortgage details in the Airbnb ROI calculator, and you’ll be able to see how the size of the down payment, the loan type, and the interest rate affect your Airbnb cash flow and Airbnb cash on cash return.
The Bottom Line: The Best Airbnb Rental Calculator
Airbnb hosting can be a lucrative business in 2022, but only if you purchase the right property and rent it out at the right rate. If you want to make the best investment decision, one of the most important Airbnb tips is to run the numbers using the best Airbnb rental calculator available in the market today.
Mashvisor’s Airbnb estimator makes your rental property analysis easier as you can access accurate and reliable Airbnb data and analytics in a matter of minutes.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
