To guarantee a profitable short term rental property investment in 2023, you need the best Airbnb income calculator. But where can you find it?
Deciding to invest in Airbnb is easy, considering all the benefits. However, finding the most profitable vacation home within an investor’s budget can be challenging, especially for beginners. To overcome this obstacle, you need access to the top analytical and search tools on the market.
An Airbnb income calculator can help you research and analyze the potential of both real estate investment markets and rental properties for sale quickly and efficiently. The best one should give you access to reliable, up-to-date nationwide short term rental data. The data should reflect the performance of actual real estate comps and rental comps in any US housing market.
Keep reading this article to figure out what an Airbnb calculator is and how it allows even first-time real estate investors to make data-based, smart decisions. We will also cover what data you can expect from a good calculator and what the tool can do for you. Last but not least, we will show you why Mashvisor is the top Airbnb rental income calculator in the US for 2023.
What Is an Airbnb Income Calculator?
The name “Airbnb income calculator” is quite self-explanatory. In brief, it is a specific type of rental property calculator that facilitates the work of real estate investors in short term rental properties.
To achieve this goal, the real estate investment software tool conducts both real estate market analysis and investment property analysis. It is necessary as the investment potential of a rental property is determined both by its location and the property itself.
You cannot boost your revenue in a market that doesn’t have the right conditions for short term rental investments. Maybe, real estate prices are too high, daily rates are too low, occupancy is weak, or regulations are too tough.
Similarly, you cannot maximize income if the property you choose to buy is not a winner. It might be it is too small to host guests, it is poorly designed, or it mismatches demand from guests in another way.
The best Airbnb calculator helps you perform the necessary analytical work to confirm that both the location and the property for sale have what it takes to run a profitable short term rental business. As such, it turns three months of Airbnb data collection and analysis into 15 minutes.
All in all, an Airbnb income calculator — like the Mashvisor platform — allows beginner investors and Airbnb hosts to compete on equal footing with those who have spent decades in the industry.
What Questions Does an Airbnb Calculator Answer?
Another way to define an Airbnb income calculator is that it helps you answer some of the most burning questions in real estate investing.
Here are the most important questions that this tool can answer for you when you buy a vacation rental property:
What Is the Average Monthly Income of an Airbnb?
The best Airbnb revenue calculator will tell you exactly what income you can expect to make per month from an Airbnb property. The estimate will be based on the performance of comparable active Airbnb listings in the local market and will take into consideration average daily rates and occupancy rates.
How Much Does an Airbnb Owner Make a Year?
The Airbnb calculator will show you how much money you can make a year based on the monthly revenue collected each month.
How Much Profit Do You Make from Airbnb?
A good Airbnb income estimator will go beyond the rental income metric and calculate other crucial measures reflecting profitability. Most importantly, it will cover cash flow, cap rate, and cash on cash return. Moreover, the top tool will have an investment payback balance spanning over the course of multiple years, so that you know when the property will pay for itself and start generating pure profit.
What Airbnb Data Can You Get From This Real Estate Investment Software Tool?
The most important benefit of using an Airbnb income calculator rather than an Excel real estate investment spreadsheet is the tremendous amount of Airbnb data and analysis to which you get access. The good news is that it is not limited to Airbnb income estimates, but includes many other metrics and measures, as mentioned above.
But what real estate data and analytics does an Airbnb income calculator provide exactly?
Here is a comprehensive list of the data points and figures that Airbnb hosts can find on the Mashvisor Airbnb revenue calculator:
Airbnb Rental Income
Needless to say, our real estate investment tool provides investors with a highly accurate estimate of the monthly Airbnb rental income that they can expect to receive. It holds true for properties listed on the platform (mostly MLS listings as well as some foreclosures and bank-owned homes). You can expect the same for off-market properties whose address you enter.
It means that you can use the Mashvisor investment property calculator to analyze the potential revenue of any residential property in the US market, regardless of its current status.
The rental income estimate is based on the real-life performance of similar active Airbnb rental listings in the area, also known as Airbnb rental comps, over the last 12 months. The comparable rental income is the product of the Airbnb occupancy rate and the Airbnb daily rate of the listings. It takes into consideration seasonal fluctuations, which are crucial in the vacation rental business.
Airbnb Occupancy Rate
Due to the fluctuations associated with the short term rental strategy, the Airbnb occupancy rate is one of the most important determinants of Airbnb rental income and Airbnb profitability. The more days an investor manages to get their property booked for in a month, the more money they will make. A top Airbnb income calculator like Mashvisor supplies hosts with the occupancy rate figure as well.
Of course, as a smart Airbnb host, you should keep in mind that what the tool shows you is the average value generated in the area. However, if you put extra effort into upgrading your property, optimizing its listing, and marketing it well, you should be able to boost your Airbnb occupancy rate. Consequently, it will allow you to generate even more income per year.
Airbnb Cash on Cash Return
Real estate investors buy rental properties for sale and rent them out on vacation rental platforms, such as Airbnb, Vrbo, and Booking.com, to make a profit. One of the best measures of return on investment in real estate investing is the cash on cash return.
Unlike other metrics, the cash on cash return is a very comprehensive measure that captures all the main aspects of buying an investment property, including the method of financing. It factors in both the initial investment (down payment) and recurring monthly mortgage payments.
However, calculating the expected ROI of even a single property that you consider buying requires a ton of research and Airbnb data availability. Not to mention that finding an affordable Airbnb investment property with the highest cash on cash return potential in your market of choice can take months of data research, gathering, and calculation.
Now, with the help of the best Airbnb revenue calculator, you get a reliable forecast of the Airbnb cash on cash return of any real estate property in the US housing market within seconds.
Airbnb Cap Rate
No rental property analysis is complete without calculating the cap rate potential of the property. Although it’s less complete of a metric than the cash on cash return, the cap rate gives investors the ability to compare the profitability potential of a few investment properties for sale quickly and easily.
With Mashvisor’s vacation rental property calculator, it’s one more metric that you get access to.
Mashvisor’s Airbnb Income Calculator
Property Price
Regardless of whether you invest in long term rental properties or Airbnb income properties, the home price is crucially important. First of all, investors must stick to income properties within their budget in order to avoid default on their mortgage payments and foreclosure. To this end, you must consider both the down payment and the monthly mortgage payments you’ll need to make for years.
Second, the sale price is present in any single rate of return formula in real estate investing. In the cash on cash return formula, it’s presented in the initial investment calculation. In the cap rate formula, it’s directly factored as the property price.
One-Time Startup Costs
The purchase price is not the only money you need to spend in order to buy Airbnb for sale. There are many other fees and expenses that you need to cover. They vary majorly, depending on your location, financing method, property type, and property price.
Here are the one-time costs that our real estate investing software platform factors in the ready investment property analysis:
- Home inspection fees
- Closing costs
- Repair costs
- Furniture and appliances (particularly important for short term rentals that have to be fully ready for guests before they can be listed for rent)
Recurring Monthly Expenses
Spending on an Airbnb rental property does not end with buying it and furnishing it. Afterward, an Airbnb host must be prepared to cover a wide range of monthly costs to get their income property up and running and be better than the rest of the competition in the market
Indeed, the recurring expenses of a vacation home exceed those of a long term rental property. They include:
- Property tax
- Property insurance
- Rental income tax
- HOA dues (if investing in a condo or another similar property type)
- Property maintenance
- Property management
- Utilities
- Cleaning fees
Cash Flow
While cash flow is easy to calculate as the difference between the rental income and the rental expenses, it requires a lot of real estate data. So, it gets complicated when you consider a few potential short term rentals for sale. Once again, it is something that a good Airbnb income calculator provides in a ready form as it doubles as a rental property cash flow calculator.
As a beginner real estate investor, you should remember to always go for positive cash flow properties as that’s the only way to make money from real estate, instead of losing money.
Airbnb Rental Comps
Rental market analysis is what Airbnb real estate investors needed to conduct in order to see the performance of other properties — similar to the ones they plan to buy — in the local housing market. This need has been eliminated with the introduction of the Airbnb profitability calculator.
Mashvisor’s investment property analysis comes with a list of all active Airbnb rental comps in the neighborhood. Our platform shows how similar or different they are from the income property that an investor is considering, as well as the distance from the said property. These factors help evaluate how a certain investment property for sale can be expected to do.
First of all, the Mashvisor calculator uses Airbnb comps when evaluating the potential of neighborhoods and specific properties. Second, it gives hosts the opportunity to access the comps for themselves to augment the investment property analysis process should they want to.
Financing Method
Buying a rental property in cash or with a mortgage yields very different return on investment results. Thus, Mashvisor’s Airbnb income calculator features a mortgage calculator. This real estate investment analysis tool helps investors estimate what down payment they can afford. It also allows them to decide what mortgage loan period is best for their particular situation and what interest rate makes sense.
All the above factors are included in the short term rental property analysis to see how they will affect all previously mentioned aspects of the investment.
Investment Payback Balance
One of the main benefits of real estate investing is that you get to make money both in the short and the long term. That’s why the top analysis tool demonstrates how well a property will perform over the course of several years.
The Mashvisor Airbnb calculator includes a 10-year investment payback balance table and graph. It shows hosts when the Airbnb income will pay for buying the property and when the rental will start making a profit.
Property Type
A good Airbnb profit calculator shows the property type. Whether you invest in a single-family home, condo, townhouse, apartment, multi-family home, or another impacts all parts of your investment journey and its outcomes.
Property Description
On Mashvisor’s investment property pages, Airbnb hosts can read a detailed description of the real estate listing. In this way, they can decide whether a listing has what it takes to meet local demand from Airbnb guests and turn it into a profitable investment opportunity.
Listing Agent
Last but not least, our Airbnb income calculator facilitates the purchase of any property listed on the platform. The app allows you to contact a top real estate agent who will help you view the property (if required) and move forward with the purchase.
Importantly, Mashvisor’s Airbnb calculator provides readily available estimates of all the above-listed metrics and measures. However, our tools also give investors the opportunity to change and adjust any figure which they think might be higher or lower in their particular case.
For example, if you have excellent marketing skills and believe that you will be able to push your Airbnb occupancy rate up, you can enter your own estimation. Afterward, our rental property calculator will recompute all numbers for you. It will then provide you with new estimates of the Airbnb rental income, cash flow, cash on cash return, and cap rate.
In 2023, the best Airbnb income calculator must not be only extremely accurate but also highly interactive and responsive.
What Can an Airbnb Investment Property Calculator Do for You?
The short answer to such an important real estate investing question is: The best Airbnb income calculator helps you find a lucrative short term rental property without unnecessarily wasting time and energy. The more comprehensive answer includes:
Conducting Real Estate Market Analysis
The first thing which any good Airbnb income calculator should be able to do is to perform real estate market analysis in general and neighborhood analysis in specific. Choosing the best location to buy an Airbnb investment property features both the city and the neighborhood.
To find the best markets for Airbnb investments in 2023, hosts can visit the Airbnb Rentals and Top Locations sections of the Mashvisor real estate blog. There, they’ll find up-to-date rankings of the top locations for the short term rental strategy.
After selecting a market to focus on, the real estate investor can use Mashvisor’s heatmap real estate investment tool to view a color-coded neighborhood map of the said market. The heatmap will point investors towards areas with high Airbnb rental income, Airbnb occupancy rate, and Airbnb cash on cash return (marked in dark blue) and low property prices (colored in white).
Mashvisor’s Heatmap: Airbnb Cash on Cash Return Range in Chicago IL
After choosing a few areas that meet their budget and ROI expectations, an investor can continue with a more detailed neighborhood analysis. The Mashvisor neighborhood analysis pages provide the following real estate data in general and Airbnb data in specific at the neighborhood level:
- Median property price
- Average price per square foot
- Airbnb cash on cash return (as well as traditional in case you ever decide to flip your rental strategy)
- Airbnb rental income
- Number of real estate listings for sale
- Number of Airbnb rental listings
- Airbnb occupancy rate
- Walk Score
- Airbnb historical rental income
- Real estate comps
- Optimal property type
- After you are done with this first step, you can move to:
Doing Property Search
Next, Mashvisor’s real estate investment app helps investors search through rental properties for sale to find the ones that match their budget and other criteria. This feature of our Airbnb income calculator is called the Property Finder, and it searches for real estate listings to rent out on Airbnb within a city or a few cities based on the following:
- Market
- Budget
- Property type
- Number of bedrooms
- Number of bathrooms
With the help of the Property Finder tool, you can locate the best vacation rentals for sale for your particular situation.
Mashvisor’s Property Finder
Performing Airbnb Rental Property Analysis
Eventually, an excellent Airbnb income calculator provides readily available, detailed investment property analysis hosts need to buy profitable rentals in any US housing market. Mashvisor’s tool offers all metrics described above. The analysis offers all the data points that we discussed above, based on the performance of Airbnb comps in the local area.
Importantly, the analysis is interactive so that you can adjust it to your specific needs and requirements.
To start searching for profitable Airbnb properties for sale in any US market, sign up for a 7-day free trial of the Mashvisor Airbnb income calculator.
What Is the Best Airbnb Income Calculator?
The best Airbnb income calculator for 2023 is, no doubt, Mashvisor. It features all the must-have characteristics of a smart real estate investing tool. It helps identify profitable neighborhoods for buying an Airbnb investment property in any US city or town. In addition, it allows investors to find and analyze vacation home rentals within a few minutes.
All data, analytics, and estimates are based on the actual performance of Airbnb listings. It makes them highly accurate and reliable, meaning investors don’t need to search for other complementary sources of Airbnb data and analytics.
Our comparison shows that the Mashvisor Airbnb income calculator outperforms both major competitors: the AirDNA calculator and the BiggerPockets Airbnb calculator. The data is more comprehensive and more accurate and the functionalities are more useful for Airbnb hosts. Reviews by customers confirm that Mashvisor succeeds in meeting the needs of investors of all types, both beginners and experienced.
To see how Mashvisor’s Airbnb calculator can help you optimize your short term rental investment outcomes in 2023, schedule a free demo with our Real Estate Experts.