If you are not familiar with the Airbnb investment calculator, then this is the right place and the right time to learn about it!
If you think that making money with Airbnb can go smoothly without the proper real estate investment tools, then think again! The right tools will take you to the right Airbnb investment opportunities.
Related: The Expert Guide on How to Invest in Airbnb
So, what is the Airbnb investment calculator, you wonder? Well, here’s all you need to know about it, why you need it, and where to find the best one.
What Is an Airbnb Investment Calculator?
The Airbnb investment calculator is a real estate tool which is used by Airbnb investors. This tool calculates and estimates all the profitability measures for an Airbnb investment property. It tells a real estate investor whether the property is worth the hassle and, in many cases, it helps them predict the outcome of such an investment ahead of time.
Why Do You Need It?
There are many reasons why you need an Airbnb investment calculator. But, in essence, it gives answers to four main questions:
1. Should you buy a second home to rent out on Airbnb?
Since Airbnb provides the option of either renting out a room or an entire house, it is sometimes difficult to decide which way to go. The good thing about the Airbnb investment calculator is that it helps an investor decide if a certain rental property of interest is worth it. For example, when calculating Airbnb cash flow, the Airbnb profit calculator takes into account the mortgage payments, monthly expenses, and all other financial aspects. Therefore, based on this data, it will compute the Airbnb profit margin from a whole investment property. This will help you decide if the cost of buying a second home is worth it for the Airbnb rental strategy.
Sometimes, renting out a room is better because you won’t need to take out a mortgage. While other times, buying a second home to rent out on Airbnb is the best option for specific tourist locations. But, here’s why we think you should be buying a second home to rent out on Airbnb.
2. Where should you invest in Airbnb?
Another major benefit of the Airbnb investment calculator is the fact that it helps Airbnb investors decide on the best locations for their investments. Although the calculator won’t pinpoint a location in the literal sense, it will still give you insights on profitable locations through return on investment measures such as cash on cash return and Airbnb occupancy rate. If a certain location is showing poor performance in the Airbnb field, the Airbnb profitability calculator will present you with all the data you need in order to move on to browsing different and more profitable locations.
3. What is the average Airbnb occupancy rate?
One of the most significant evaluation measures in Airbnb real estate investing is the occupancy rate. It simply refers to the number of days your Airbnb rental property is or will be occupied throughout the span of a year. Everything from your rental income to the cash on cash return depends on the occupancy rate. Therefore, the higher the rate, the better. The more you rent it out, the more cash flow you generate and thus the more profitable the investment property is.
The Airbnb investment calculator helps a real estate investor check the average Airbnb occupancy rate in their location of interest. It also shows the rate for every rental property.
But does a low occupancy rate mean that the rental property is not worth the investment? Not really. Sometimes, a high vacancy rate (which is the opposite of an occupancy rate) is caused by the owners themselves. In other words, it is a matter of fact that mismanaging your rental property will damage your rental business. Luckily, there are always ways to improve and boost your occupancy rate and Airbnb rental income so don’t get discouraged. Here are 13 Tips to Follow for High Airbnb Occupancy Rate. Alternatively, the rental rate may be high enough so that a low occupancy rate is still profitable. Because the Airbnb investment calculator shows you all of these key values together in one place, it’s easy to decide if an investment property is worth it.
Related: The Airbnb Occupancy Rate Formula- What It Is and How to Use It
4. How much should you charge for rent?
So the question “How much should I charge for rent?” is not that easy to answer. After all, there is more to the answer than just a dollar amount. It very much depends on the numbers you get after property evaluation. In other words, only after you’ve done an investment property analysis can you determine how much you should charge for rent. You have to examine the Airbnb return on investment thoroughly. Also, you must find other similar properties in the same vicinity (which we call Airbnb comps) to which you can compare the numbers you’ve gotten and finally put an estimated value to your Airbnb rental income.
How does the Airbnb investment calculator help you do all that? Easy. First of all, the tool has a few fields that you have to fill with specific numbers such as mortgage payments and any other rental expenses. Through this data, the calculator will come up with all the necessary estimations of profit margins for a specific rental property. Additionally, it will find the Airbnb comps for you which are typically other similar investment properties for sale or that have been sold in that area.
If you are not sure what Airbnb comps are, here’s a quick link: What Are Real Estate Comps, How to Find Them and How to Use Them for the Best Real Estate Investments.
Where Do You Find the Best Airbnb Investment Calculator?
An average Airbnb investment calculator is not hard to find. In fact, you can find it on any real estate platform. But, if you are looking for the best and most advanced one, then Mashvisor’s Airbnb investment calculator is what you want to try. For one, it is a multi-purpose tool which not only serves short-term rental investors but also long-term rental investors. So, at any point, if you decide to switch your investment strategy or buy other investment properties to use as traditional rentals, you can use this tool to perform the necessary analysis. Moreover, it gives you data for both rental strategies which will help you understand what property is best for what type of rental.
Another reason to use Mashvisor’s Airbnb investment calculator is that, simply, your success depends on it. The real estate business is all about the numbers attached to an investment property. However, any miscalculations might cost you a fortune if not the entire business. Therefore, Mashvisor is providing Airbnb investors, aspiring and seasoned, with the proper real estate investment tool to get the most accurate results. So, why don’t you start out your 14-day free trial with Mashvisor now?