Considering all the benefits of investing in short-term rentals, it’s no wonder why so many people are renting out on home-sharing sites like Airbnb. However, you might have some questions about this strategy when starting out. Some of the most frequently asked questions are “how much can you make with Airbnb?”, “how do you estimate Airbnb income before buying a rental property?”, and “How can you find the best Airbnb properties for sale?”. Luckily, you can find the answers to all these questions using one single tool – the Airbnb Estimator. Keep reading to learn what this tool is and how it helps beginner and experienced real estate investors make money on Airbnb.
What is An Airbnb Estimator and Why Do You Need One?
As the name suggests, the Airbnb Estimator is a real estate investment tool specifically designed for those interested in investing in short-term rental properties. Another name for this tool is the Airbnb Profit Calculator. This tool utilizes historic Airbnb data and predictive analytics to analyze Airbnb real estate investment opportunities and their profitability. So, instead of spending weeks or months gathering necessary data and organizing them into spreadsheets, you can find what you need using the Airbnb calculator and in a matter of minutes. But why do you need Airbnb data in the first place?
Any successful real estate investor will tell you that the reason for their success lays behind making calculated investment decisions. The numbers behind a real estate deal will ultimately determine whether or not you can afford this investment and your future returns. This is true for traditional and Airbnb investment properties alike. Thus, Airbnb analytics will help you estimate your Airbnb earnings and find a lucrative short-term rental. Ultimately, this guarantees a successful real estate investing career in 2020 and beyond. You can find the best Airbnb Estimator right here!
Mashvisor is a real estate investment software that helps real estate investors conduct both real estate market analysis and rental property analysis using reliable numbers. To do so, Mashvisor has many tools that you can use like the Real Estate Heatmap, Property Finder, Property Marketplace, and of course, the Airbnb Profit Calculator. Our Airbnb calculator is where you can analyze Airbnb rental properties in any market in the US. All Airbnb data, analytics, and estimates that we provide come straight from Airbnb.com. They mirror the actual performance of Airbnb listings over the past 12 months, making them highly accurate and reliable.
To learn more about how our tools, click here.
What Data Does the Airbnb Estimator Provides?
As mentioned, the most important benefit of using an Airbnb Estimator is the remarkable amount of Airbnb analytics to which you get access. An excellent Airbnb calculator like Mashvisor provides not only Airbnb rental income estimates but much more. Our real estate investment app provides property measures and ROI metrics that you need to buy the best Airbnb investment and better understand your Airbnb profit margin. Here’s a comprehensive list of metrics and figures you can find on Mashvisor’s Airbnb calculator.
Related: Airbnb Data: What Real Estate Investors Need and Where to Get It
#1 Property Description and Information
The first thing you’ll see when you click on a property listing on Mashvisor’s property search tools is a description of that listing. The description includes details about the property’s location, listing price, number of bedrooms and bathrooms, and lost size. This section of the Airbnb Estimator also provides general information like property type, year built, how many days the property has been on the market, and more. Some listings even come with the option to check a virtual tour of the house. All of this information will assure that the potential Airbnb investment property fits your criteria in terms of location, budget, and condition. Moreover, you’ll also get the contact information of the listing agent if you want to move forward with the deal.
#2 Airbnb Rental Income
As mentioned, our Airbnb Profit Calculator provides hosts with a highly accurate Airbnb income estimate. This is the monthly Airbnb rental income that you can expect to earn from the Airbnb investment found on the platform. Moreover, you can estimate Airbnb income for any off market property whose address you enter. Again, this Airbnb data is based on the actual performance of Airbnb listing in the area. Getting your hands on this type of data helps you determine how much to charge for an Airbnb and calculate your Airbnb profit margin. The comparable rental income is the product of the Airbnb occupancy rate and daily rate of Airbnb rental comps – both of which are Airbnb analytics that you can also find on Mashvisor.
#3 Airbnb Occupancy Rate
After finding an Airbnb for sale, real estate investors should make sure the rental has a high Airbnb occupancy rate. Short-term rental properties face fluctuations because of the seasonality nature of this strategy. Thus, the occupancy rate is an important determinant of your Airbnb earnings. Naturally, the more days that your Airbnb investment is booked per month, the more money you will make as an Airbnb host. A high Airbnb occupancy rate also means you’ll have enough income to get you covered during the off-season and not have to worry about cash flow problems. A top Airbnb Estimator like Mashvisor’s supplies hosts with this figure as well.
Related: What Airbnb Occupancy Rate Can You Expect in 2020?
#4 One-Time Startup Costs
When buying a rental property, the purchase price is not the only money you’ll have to spend. There are many expenses and fees that real estate investors need to cover regardless of the rental strategy (traditional or Airbnb). Your one-time startup costs vary depending on your location, property type, and property price. Important startup costs that most investors consider and which you’ll find readily available for all Airbnb properties for sale using our Airbnb Estimator include:
- Home inspection fees
- Closing costs
- Repair costs
- Furniture and appliances
#5 Recurring Rental Expenses
Owning a rental property comes with many recurring costs and expenses that hosts and landlords need to be prepared for. The recurring expenses of a vacation rental can sometimes exceed those of long-term rentals. To keep your short-term rental property up and running, you must cover these costs. Otherwise, you’ll end up with negative cash flow and risk losing your Airbnb investment. The recurring costs that you’ll find on Mashvisor’s Airbnb calculator include:
- Property tax
- Property insurance
- Rental income tax
- HOA dues (if investing in a condo or a similar property type)
- Property maintenance
- Property management
- Cleaning fees
#6 Airbnb Cash Flow
Real estate cash flow is the difference between monthly rental income and rental expenses. While calculating the cash flow of a rental property sounds easy, it requires a lot of data. This is especially true for Airbnb cash flow seeing that expenses and Airbnb earnings might vary from month to month. Once again, this is something that the Airbnb Estimator will make easy. Using Mashvisor, Airbnb hosts will get an estimation of their potential cash flow readily-calculated. So, you don’t need to waste time gathering data of an Airbnb for sale to see if it’ll generate positive cash flow. As you should know, positive cash flow properties ensure that you’re making money in real estate instead of losing it.
#7 Airbnb Cap Rate
The capitalization rate (or cap rate for short) is an important return on investment metric in real estate. If you’ve found many Airbnb properties for sale and you’re unsure which one to go for, calculating their cap rates is an excellent way to quickly compare their profitability potential and make a smart investment decision. As you can imagine, no Airbnb investment analysis is ever complete without calculating the cap rate. If you don’t know how to calculate this number, don’t worry – the Airbnb Profit Calculator will already have it pre-calculated for you.
#8 Airbnb Cash on Cash Return
Cash on cash return is yet another important metric to estimate your Airbnb return on investment. This metric, however, is used by investors who finance their purchases with a loan. As a result, cash on cash return captures all aspects of buying a rental property and requires even more data than the cap rate. Manually searching for, gathering, and analyzing this type of Airbnb analytics can take months. If you have an Airbnb Estimator, on the other hand, cash on cash return is one of the Airbnb data that you’ll find available for any Airbnb for sale in the US housing market.
Related: 20 Most Profitable Airbnb Locations in 2020: Cash on Cash Return
#9 Airbnb Rental Comps
A smart Airbnb host will run a rental market analysis before buying a short-term rental to see how other similar properties have been performing in the market. Analyzing an entire market is surely going to take a lot of time if done the traditional way. When using an Airbnb calculator instead, it only takes a matter of minutes. This is because our real estate investment software supplies Airbnb hosts with a list of active Airbnb rental comps in the area. This allows you to see the occupancy rate, nightly rate, rental income, and ratings of similar Airbnb rentals. In turn, this helps you evaluate how much you can make with Airbnb and your property’s potential performance as well.
#10 Financing Method
When you’re planning to buy an Airbnb property, you should keep in mind that you’ll have different Airbnb return on investment results if you’ve purchased with cash VS with a mortgage. Some investors might want to buy an investment property with a mortgage, but they don’t know if this will yield a good ROI. This is why Mashvisor included a mortgage calculator in its Airbnb Estimator. After you enter some basic information about your financing, this tool lets you know what down payment you can afford, what mortgage loan period is best for your particular situation, and how these factors will affect all the afore-mentioned figures of their Airbnb investment.
The Bottom Line
In 2020, getting access to Airbnb data is essential to making the best investment decisions that lead to making money from real estate. Using Mashvisor’s Airbnb Estimator, you will be provided with the above mentioned Airbnb analytics for any Airbnb for sale in the US housing market. The best thing about our software is that it’s not only accurate and reliable, but it’s also highly interactive and responsive as well. Meaning, you can adjust any figure that you think might be higher or lower in your particular case. After entering your own estimations, our Airbnb calculator will automatically re-compute all numbers for you and provide new estimates of the previous Airbnb data.
Want to give our Airbnb Estimator a try? Start your 7-day free trial with Mashvisor now.