For years, real estate investors have been adding houses, duplexes, apartments, and other properties to their investment portfolios. While they were once slated to be used with the traditional rental real estate investment strategy, nowadays investors have looked to short term rental strategies like Airbnb. In recent years short term rentals including Airbnb properties have proved themselves to be far more lucrative investments that provide higher returns on investment. Depending on the property, some Airbnb listings can make up to double or even triple the average traditional monthly rental income of any given city. Though you cannot say this about all properties in a certain area, using an Airbnb hosting calculator will help you determine the profitability of an Airbnb market in general as well as the Airbnb income potential of any given property.
Keep reading to find out how an Airbnb estimator could boost your investments in 2022 and what is the best Airbnb hosting calculator in the market.
What Exactly Is Airbnb?
Airbnb has risen in popularity over the years for being a great alternative to hotels and traditional accommodations for travelers and tourists alike. Airbnb is a website and a service that allows homeowners to rent out properties in different parts of the world to practically anyone for short periods of time. Airbnb hosts list their properties and the amenities they offer and then allow guests to book the property per night at different rates throughout the year. Offering guests a range of options from a shared room to entire homes, an Airbnb rental is often seen as a more affordable place to stay when visiting a place. Due to the increasing Airbnb demand, savvy real estate investors have been buying and converting properties for the sole purpose of renting them out short term on Airbnb and other similar platforms.
Is It Really Worth Buying an Airbnb Property in 2022?
With Covid-19 and subsequent travel restrictions being heavily imposed, you may be asking the question of how to invest in real estate given the current climate and if it’s really worth investing in Airbnb in 2022. While there are some drawbacks and added hurdles when it comes to maintaining an Airbnb at the moment, the short term rental strategy seems to generate money and be a great source of income for many people. Listed below are some reasons why investors continue to add Airbnb properties to their portfolio:
1. Demand for Airbnb
When becoming an Airbnb host, it is important to know that a property will only generate rental income when occupied. This is why demand is so important when it comes to owning a short term rental. Without a high Airbnb occupancy rate in the area, your property will likely be vacant for days on end, costing you to have a lower return on investment.
While traditional rental properties will always be in demand, Airbnb has become a staple for travelers and tourists alike. With the strong demand, the Airbnb platform brings real estate investors who see it as a huge market to tap into. In 2020 alone, Airbnb had an estimated 193 million bookings across the site. While this may not be the most bookings Airbnb has ever seen, this still shows that the demand for Airbnb properties and other short term rentals continues to be strong despite the pandemic and could potentially be a great investment.
2. Higher Rental Income
Aside from the demand for Airbnb in the real estate market, it is no secret that Airbnbs can bring in higher rental income if done correctly. While traditional rental properties have a fixed and set price, Airbnb prices can fluctuate per season or even throughout the week. During the weekdays, most hosts will offer their properties at a lower price, while increasing it for weekend stays. This flexible pricing allowed hosts to set their own Airbnb daily rate depending on the demand and potentially earn double or triple the average monthly income a traditional rental would generate.
3. Popularity of Airbnb
Since its launch in 2008, Airbnb changed the way people look for travel accommodations throughout the world. As an oftentimes cheaper alternative to traditional hotels and establishments, people have been opting to stay at Airbnb properties. While previously people would search for the best hotels in the area, many have begun directing their searches to Airbnb and similar websites instead. This type of traffic and popularity is what draws real estate investors to the Airbnb business model. With very minimal effort and an almost built-in marketing system, their properties can be seen by millions of people a day and draw in constant guests with just a few clicks.
What Is an Airbnb Hosting Calculator?
While there are many benefits that come with a short term rental such as an Airbnb property, there are some drawbacks. One of the disadvantages is that it’s quite difficult to project how much of an Airbnb return on investment a property can truly yield. Unlike traditional rentals where there is a fixed price per month, calculating the rental income that an Airbnb can generate is quite tricky due to its dependency on how often it is occupied. While it would be ideal to get your property booked out for every day of the month, that will likely not be the case.
That is why real estate investors have begun using and relying on calculations and metrics from an Airbnb rental calculator. As the name suggests, an Airbnb hosting calculator is used to estimate and project how profitable a certain property will be as a short term rental on Airbnb. Pulling data and analytics from real estate websites, city data, and metrics from the Airbnb site itself, they will be able to determine things like the daily rate, the Airbnb occupancy rate, the potential rental income, the cash on cash return, and the cap rate. If done right, this real estate investment tool can really help you determine whether or not a property is worth buying and listing on Airbnb.
Though it is possible to do all these calculations to determine how profitable a property may be manually, it is a long and tedious process. When it comes to real estate investing, time is of the essence, and while calculations are necessary, gathering your own data and crunching the numbers could take months to do. By then, your data may no longer even be up to date and may no longer be a good reflection of the Airbnb real estate market.
That is why using an Airbnb hosting calculator is a good idea. Not only will it take a few minutes to get the results, but using a reliable Airbnb profit calculator will ensure that your data and analytics are all up to date. By using a Airbnb estimator, you are sure that you are making your real estate investments based on accurate and reliable data that is current and reflective of the current Airbnb market.
The Mashvisor Airbnb Hosting Calculator 2022
While many sites have their own version of an Airbnb earnings hosting calculator, not all of them were created equal. The whole idea of using an Airbnb calculator is to have a smart tool that is able to gather all the accurate Airbnb data in order to show you how much of a profit a property could potentially make when listed on a short term basis. However, depending on which Airbnb hosting calculator you use, you may find that the calculations are either inflated or underscoring specific properties. This is an issue as you would not want to invest in an underperforming property nor would you like to miss out on a potentially successful Airbnb.
To avoid this, you should always check where the Airbnb profitability calculator you plan to use gets its data from. Ensuring that the Airbnb income calculator is pulling data from reliable sources may require an additional step on your part, but it could make a world of a difference in your Airbnb investments and income.
That is why Mashvisor’s Airbnb hosting calculator is one of the best in the market. As a real estate data company at our core, we understand the importance of having all the most up-to-date information and metrics in making any type of Airbnb investment. That’s why our Airbnb calculator gathers big data directly from the Airbnb website itself as well as other available real estate data available in that area. By having multiple sources, we are able to closely estimate the profitability of any property you may be considering and give you the bigger picture and detailed breakdown of its potential nightly rent, occupancy rate, monthly rent, cash on cash return, and cap rate. With all of this, whether you are a new or seasoned Airbnb real estate investor, you are sure to have all the information you need to make the best decision for your investment portfolio.
Using the Mashvisor Airbnb Calculator
Mashvisor’s Airbnb hosting calculator is pretty straightforward and can be easily maneuvered by anyone looking to invest in an Airbnb. From finding a potential property for investing to breaking down every detail about its profitability, Mashvisor’s Airbnb edtimator is a great tool that can give you a comprehensive look at any Airbnb real estate investment. Here is how you can use our tool:
1. First Things First, Finding the Perfect Location
When buying any type of real estate investment, location is everything. For an Airbnb investment, the market will majorly determine how much traffic and how many visitors you are likely to have throughout the year. That is why Airbnb hosting calculators will usually start with zeroing in on the property’s location. For investors, a good start is picking a state and a city that sees tourists and all types of travelers for vacation and business. This will help ensure that the demand for your investment property is always high, resulting in more occupancies than vacancies.
However, with so many people investing in Airbnb rentals, you may need to refine your property location search even further. Mashvisor’s real estate heat map can help you not only pick the best city but also the best neighborhood in the area for an Airbnb. Using Mashvisor’s investment property search tools, you can filter through your search by which neighborhood has the best Airbnb market.
2. Taking into Account the Initial Investment and Maintenance Costs
After you’ve found a couple of potential properties, Mashvisor’s Airbnb hosting calculator will not only show you the upfront cost of buying an Airbnb property, but it will also give you estimates of other expenses that may come with the property. These include taxes, HOA dues, repairs, loan and mortgage payments, and others. Knowing all of these will not only help your prepare to take on the investment but also give you a better idea of how much your return you can realistically expect after deducting the cost of owning the Airbnb property.
3. Gathering Airbnb Metrics
Once you’ve found a place and seen the costs to buy and maintain an income property, the Mashvisor’s Airbnb hosting calculator will take this into account and calculate the following metrics:
- Airbnb Daily Rate
- Airbnb Occupancy Rate
- Airbnb Rental Income
- Airbnb Cash Flow
- Airbnb Cash on Cash Return
- Airbnb Cap Rate
Importantly, the Mashvisor’s Airbnb calculator will compare these Airbnb metrics to the performance of traditional rentals within the area. This will help you determine if it is truly better to invest in an Airbnb property or a more traditional rental in this market.
4. Showing Rental Comps and Airbnb Performance Comparisons
Now that you have all the metrics for your potential investment property, Mashvisor’s Airbnb hosting calculator compares its performance with the performance of other Airbnbs in the surrounding area. Comparison with properties similar to your potential investment will allow you to see the performance of different Airbnbs in the area based on occupancy rate, average rental income, cash on cash return, and other metrics. Overall, not only will Mashvisor’s Airbnb calculator give you a comprehensive overview of the Airbnb property you are considering, but it will also show you a direct comparison to similar properties in the area.
The Bottom Line
Airbnb analysis tools can help real estate investors diversify their portfolio in 2022. From helping you find a potential location to comparing a property’s potential performance on the Airbnb market, using an Airbnb calculator allows you to make investment decisions based on up-to-date metrics and data without having to manually find and calculate them yourself. Aside from giving a comprehensive look at the potential any property can have on Airbnb, the Mashvisor platform provides investors with the most recent data from the Airbnb website as well as other reliable real estate sources making it the number 1 Airbnb hosting calculator this 2022.
To test the power of this tool for yourself, sign up for a 7-day free trial of Mashvisor.