If you’ve paid any attention to real estate market trends in the past few years, then you’d know that buying an Airbnb rental property is a smart move. Yes, there are plenty of cities with Airbnb legal issues right now that make it hard for a real estate investor to follow the Airbnb investment strategy. But, you are a real estate investor. So, you can simply:
- Choose to invest in real estate out of state
- Find an Airbnb-friendly city
- Buy an investment property there
- Hire a professional property manager
- Rent out on Airbnb and start making money
Related: Owning an Airbnb Investment Out of State: Is It a Good Idea?
But before you get started, you should know (and you may have already caught on from the title of this blog) that there is one step missing from that list and that’s using an Airbnb income estimator before buying an Airbnb investment property.
An Airbnb estimator is a powerful real estate investment tool. If you want to increase your chances for successful Airbnb real estate investing in 2020 and beyond, then you’re going to want to keep reading to learn more about this tool.
What Is an Airbnb Income Estimator and Why Do You Need to Use One?
The Airbnb income estimator goes by many names: the Airbnb profit calculator or Airbnb calculator for short, the investment property calculator, the rental property calculator, or simply, the Airbnb estimator.
It’s an online real estate tool that uses Airbnb data to accurately forecast how much money you can make with an Airbnb rental property before you buy it.
This kind of Airbnb predictive analytics is necessary to ensure that you find the right rental property in the right neighborhood. This way, you’re not just jumping on the short-term rental trend with your fingers crossed, hoping you find as much success as those Airbnb hosts you read about who make 6 figures and have paid off all their debt. With the Airbnb income estimator, you take luck out of the equation. And the best part? It’s super easy to access and use, making Airbnb real estate investing accessible to anyone, even the first-time real estate investor.
Where Can You Find the Best Airbnb Income Estimator?
If you want to start investing in Airbnb, then you’ll want to use only the best real estate investment tools. And- surprise, surprise- you can find the best Airbnb income estimator here at Mashvisor.
But we’re not just “tooting our own horn”. Mashvisor’s rental property calculator is the only tool on the market that will help you accurately estimate Airbnb income with little to no effort on your part. This means you won’t be sorting through Airbnb rental listings to try and see how much other hosts are making in an area- this is tedious and not a guarantee that you’ll make the same.
Of course, no tool, expert, or service can 100% forecast how much money you’ll make with Airbnb. That’s because you control a lot of that as the property manager. However, Mashvisor can ensure that, at the very least, you’re setting yourself up for success by buying an Airbnb investment property that has the potential to make big bucks.
So let’s take a look at the steps that will get you there.
How to Use the Airbnb Estimator: 3 Simple Steps
Before continuing with the tutorial part of this blog on how to use an Airbnb income estimator, you may want to sign up for Mashvisor now. That way, you can follow along with the steps below and by the end of the blog, you’ll have found the perfect rental property to start your Airbnb business.
Step #1: Choose One of the Best Places to Invest in Airbnb
As mentioned, many cities in the US housing market don’t allow real estate investors to rent out non-owner occupied rental properties on Airbnb. So before you even start using Mashvisor’s Airbnb income estimator, you should have an idea of which city has lenient Airbnb regulations and laws.
In addition to checking up on Airbnb laws, you’ll want to start your market research. During this initial Airbnb market research, you’ll actually want to start estimating Airbnb income by city. For this, you’ll need numbers like:
- Median Property Price
- Average Airbnb rental income by city
- Average Airbnb occupancy rate by city
- Average cap rate by city (or cash on cash return by city)
These Airbnb statistics by city will give you a good idea of where you can afford to buy an Airbnb rental property that will make you a good return on investment.
Because we here at Mashvisor want to make things easy for you, we went ahead and already put together a list of the 20 best places to invest in Airbnb in 2020. The following cities have the highest average cash on cash return in our Airbnb database and non-owner occupied rentals are legal in each one:
1. Tuscaloosa, AL
2. Trenton, NJ
3. South Bend, IN
4. Paducah, KY
5. Abilene, TX
6. Newburgh, NY
7. Hampton, VA
8. Columbus, GA
9. Dayton, OH
10. Albany, GA
11. Seguin, TX
12. Jasper, AL
13. Cumberland, MD
14. Youngstown, OH
15. Jonesboro, AR
16. Wilmington, DE
17. Evansville, IN
18. Harrisonburg, VA
19. Fort Wayne, IN
20. Hattiesburg, MS
Get the Airbnb income estimates along with Airbnb occupancy rate data and ROI data by reading: 20 Most Profitable Airbnb Locations in 2020: Cash on Cash Return.
There is one thing to note about the above list before we move on:
Yes, those cities are somewhat surprising Airbnb locations but the Airbnb analytics don’t lie. Those cities will allow you to make the best Airbnb return on investment in the US, hands down.
But if you’d rather go for more popular cities, then you can check out the following 3 locations that Airbnb deemed as top tourist destinations for 2020. Airbnb non-owner occupied rentals are legal in all three cities and they promise a good ROI as well:
1. Milwaukee, WI
2. Eugene, OR
3. Cape Canaveral, FL
Get the Airbnb income estimates along with Airbnb occupancy rate data and ROI data by reading: What Will 2020 Look Like for Airbnb Real Estate Investing?
Step #2: Use the Airbnb Heatmap to Find a Good Neighborhood
So now that you have a general idea of where you want to invest in Airbnb, you need to narrow it down further to the exact neighborhood. And this is where we get to start playing with the Airbnb income estimator. Because you see, this tool doesn’t just make sure you’re buying an Airbnb with a high rental income and positive cash flow. It allows you to perform a thorough neighborhood analysis using the integrated real estate heatmap. This will allow you to estimate Airbnb income by neighborhood so you have a clear picture of your earning potential. Here’s how it works:
Enter in the city of your choice for investing in Airbnb and hit Explore Data.
Next, start selecting the investment property search filters to find the best Airbnb neighborhoods. I recommend you start with the Listing Price Filter to narrow down neighborhoods that fit your budget. Affordable neighborhoods will be highlighted in red, while the more expensive ones will be highlighted in green.
Then, one by one, set the different filters for:
- Airbnb Rental Income
- Airbnb Cash on Cash Return
- Airbnb Occupancy Rate
For these filters, you will want to narrow it down to neighborhoods that are highlighted in green until you find the best one for investing in Airbnb. And this will complete your Airbnb market research. The Airbnb heatmap really is the best way to start finding income properties for this rental strategy.
Step #3: Choose an Investment Property and Start Estimating Airbnb Income
The last step is to use the Airbnb income estimator for investment analysis. Now that you have a neighborhood in mind for buying an Airbnb property, you’ll be presented with a choice to invest in dozens of houses for sale. Trying to manually figure out how much money each one will make with the Airbnb rental strategy is painstaking and time-consuming, to say the least. So instead of using an Airbnb analysis spreadsheet on Excel, the Airbnb income estimator allows you to get the numbers you need right away.
Simply select any Airbnb listing in the neighborhood. You’ll be taken to the Airbnb income estimator where you can immediately view the following Airbnb rental data:
- Airbnb Rental Income
- Monthly Expense Estimates
- Airbnb Cash Flow
- Airbnb Cash on Cash Return
- Airbnb Cap Rate
- Airbnb Occupancy Rate
What’s more, you’ll be able to use the mortgage calculator to plug in your financing information such as the down payment for rental property, the interest rate, the type of loan, the loan term, and the amount. This way, you can see the cash on cash return that applies to your investment property financing.
You can also adjust and add any expenses as you see fit to get a more accurate cash flow projection for the Airbnb property for sale.
And you’ll even be able to use the Airbnb income estimator as an Airbnb price estimator. That’s because each listing comes with Airbnb comps so you can see right away how much you’ll be able to realistically charge for rent.
It only takes a few minutes and you can immediately decide if the Airbnb income estimates look good to you. Or you can quickly move onto the next investment property for sale, perform the quick (almost instant) Airbnb investment analysis, and keep going until you find the right income property that promises a high Airbnb profit margin.
Get Started Now
If you want to make a sound investment based on data, then use an Airbnb income estimator. You’ll be able to confidently buy an Airbnb knowing how much you will make. The next step is on you to be a great host- or just hire a professional property manager and enjoy the passive income!
To learn how to become an Airbnb host in 2020, read our comprehensive guide here.
There’s no reason not to give this tool a try. Especially since you can do it now with a 14-day Free Trial.