The Best Airbnb Pricing Calculator in 2022: A Mashvisor Review

Passive income, flexibility to sell at the right moment, greater security, diversification of investments, and property value appreciation – these are all excellent reasons why you’d decide to rent your property on Airbnb. Whether you’re thinking about investing in a rental property, have been hosting guests for some time, or putting your rental on Airbnb, the biggest question that lingers in the air is – “how much money can I make with this?”

Using Airbnb to rent a property can really be a profitable real estate investment strategy. But to run a successful Airbnb business, you need to find a way to set the right pricing, right? Because there must be a healthy balance to ensure that all the expenses are covered by the Airbnb income (which also allows you to scale the business when needed). To set the price, you must determine what your space is worth, and that’s where the Airbnb pricing calculator comes into play.

What Is a Good Airbnb Rental Property?

There is no universal answer to this question or a definition that sums up everything in a few paragraphs. There are several important signs to look for, but assigning such a description is usually arbitrary. To invest in a good Airbnb investment property is contingent on different factors, and in the case of an Airbnb rental, everything must fall into the right place to reward you as a property owner or investor.

Before we proceed with defining the most important factors that make a good rental property, bear in mind that rental property investors might get caught up in something called analysis paralysis, which prevents them from getting deals done.

The essential elements of a good rental property and the signs you should be looking for include:

• Property condition
• Property value
• Property management
• Market trends (average rent, job market, and future development)
• Cash flow and growth potential
• Location (crime rate, nearby schools, taxes, and neighborhood)

Let’s take a better look at how an Airbnb income calculator can help you make your crucial business decisions based on accurate data. 

Airbnb Pricing Calculator

While there is no correct answer to what kind of profit you can make with Airbnb, property management reports that the average Airbnb host makes around $9,600 per year (while earnings of top Airbnb hosts can top at $24,886 yearly in the U.S.). Your earnings can vary according to factors such as maximum occupancy, the rental location, seasonality, how many rental properties you manage or own, etc. To determine the potential ROI on your property and whether it’s worth the investment, you can use an Airbnb pricing calculator.

How Does an Airbnb Pricing Calculator Work?

The first piece of data a pricing calculator relies on is the location of your property. The data used in these calculations are specific for specific markets across countries and regions, which ensures that the host always gets price calculations applicable to their particular market.

With a good pricing calculator under your fingertips, you will be able to determine the income potential for your new rental property and devise an Airbnb investment strategy that allows you to maximize its profitability. After you enter the address of your rental property and other important data, the findings and estimations get delivered to you almost in real-time.

Advantages of Using an Airbnb Pricing Calculator

Learning more about the current and future real estate market trends is essential for the success of your Airbnb hosting endeavors. And the tool central for the understanding of these trends is your Airbnb profit calculator. You can also use it to find out which locations are or will be most profitable for future investments. For those who plan to scale their Airbnb business in the next 3-5 years, this information is crucial for staying competitive and making sure the metrics they track will lead to profitability.

The metrics you will be able to calculate with an Airbnb calculator are:

• Occupancy rate. This rate shows the number of days during which a rental property is occupied by a guest. In other words, it’s the ratio of time in which a specific listing is rented as supposed to when it’s vacant. The factors that determine an occupancy rate include guest reviews, seasonal changes, location, nightly rate, and marketing.
• Cap (capitalization) rate. The capitalization rate shows the rate of return on investment you can get on your Airbnb rental property. The cap rate is calculated by dividing the net operating income with your property asset value and then multiplying the result by 100. If your property has a capitalization rate of 10% or more, then it is considered a good investment.
• Cash flow. With a simple cash flow calculation, you can see the potential of rental property as an investment. You calculate it by subtracting property expenses from the rent. The property worth renting is the one that has a positive cash flow.
• Potential rental income. The potential rental income is a metric that shows the amount you could earn from a listing. To calculate long-term rentals, you should just multiply the monthly rent by 12. For Airbnb rentals, you should rely on your Airbnb price calculator because you need to factor in your estimated occupancy rate and pricing.

Other estimates that an Airbnb profit calculator can provide are:

• Rental expenses

You cannot make money without investing some in the first place, which is why you need to create an accurate estimate of rental expenses. First of all, you’ll need these expense estimates so you can deduct them to reduce tax liability. Second, they are helpful when calculating the expected return on investment and cash flow.

Rental expenses that are available on Mashvisor’s Airbnb income calculator are:

Startup expenses – inspections, total repair costs, closing costs, and furniture and appliances.

Ongoing monthly expenses – cleaning and maintenance fees, utilities, mortgage loan interest, repairs, services fees charged by Airbnb, private mortgage insurance and property insurance, and marketing.

Another good thing about using Mashadvisor’s Airbnb estimator is that you can modify the already-provided expenses by adding custom ones (since some of your expenses may not be included there in the first place).

• Airbnb rental comparisons

Conducting a rental market analysis is another crucial step in determining the right price for renting your listing. To do this, you will need to run an Airbnb rental comparison of properties in the areas similar to the area in which you own an Airbnb investment property or consider buying one.

You can do this manually by checking local rental listings to find rental properties comparable to yours in terms of type, size, and amenities. To save yourself some time, you can use Mashvisor’s Rental Property Calculator, which will automatically calculate your rental rate.

• Cash on cash return

Cash on cash return is a metric that real estate investors use to evaluate a property’s current and future profitability. It is calculated by dividing the annual cash flow with the initial cash outlay and then multiplying the result with 100. The rate is used to measure the net income produced by your property relative to the initial money investment made to buy the property. It is important when evaluating the potential profitability of a real estate investment deal. You can also use cash on cash returns to compare different investment properties and get a consistent look at the long-term potential of different assets.

• Rental investment financing method

One important factor that will have a significant impact on your ROI and cash flow is your financing method. Our Airbnb price calculator has a mortgage calculator that lets you see the size of the loan type, down payment, and interest rate, which all affect your cash-on-cash return and cash flow.

• Finding the best real estate properties to invest in

Open the Airbnb pricing calculator and start setting the parameters. First, you need to choose a top location. You want to find a location with a high occupancy rate – the fewer days per month your listing stays vacant, the more profit you’ll make. Look for cities that have a large number of monthly visitors and where there’s a high Airbnb demand.

Second, you should opt for the right type of property. For instance, if you decide to go to the city center of a city packed with business travelers, buying a condo or small apartment makes the most sense. But if you want to invest in a mountain or beach property to host friends or families on vacation, a single-family home is your best buy. The type of property determines your rental income, occupancy rent, and ultimately – your return on investment.

Regardless of your choice, you will need to conduct thorough market and neighborhood research before you invest. With an Airbnb calculator, you don’t need to do all that manually. Just enter the right parameters and you will get the data you need (structured in an easily understandable format). This makes Airbnb income calculators the perfect tools for finding rental properties.

Mashvisor’s Property Finder is an excellent tool Airbnb hosts have at their disposal to find the top-performing properties in the market of their interest.

Airbnb Calculator Accuracy

An Airbnb estimator pulls data from Airbnb directly, or other reliable sources like Redfin or MLS. These tools are the same ones that real estate investors use to get current rental market data. What also makes an Airbnb income calculator an invaluable tool for accessing real estate market data is the fact that resources such as MLS aren’t available to users outside of the real estate industry.

An Airbnb profit calculator is a tool used by real estate experts when preparing reports because of its accuracy. Some of those tools are crucial to such an extent that they’re not allowed to be used by anyone outside the real estate industry. This makes an Airbnb pricing calculator a vital tool for Airbnb hosts.

Mashvisor’s Airbnb Pricing Calculator

Mashvisor’s Pricing Calculator is the go-to tool for real estate investors and Airbnb hosts that is able to turn weeks (and even months) of property research into a 15-minute endeavor. The platform relies on predictive analytics and Big Data to deliver comprehensive real estate data. Its algorithms work to detect even the slightest change in local Airbnb demand, helping you set your pricing for maximum income.

In other words, the research process is amazingly simplified. All you need to do is type in the name of the city you want to purchase a property and browse neighborhoods to get information about the number of “For Sale” listings, median property prices, average prices per square foot, monthly traditional rental income, traditional cap rate, traditional cash on cash return, and more. With this information at your fingertips, you will have everything you need to create a data-driven Airbnb investment strategy and outperform your rental market.

To learn more about how we will help you make faster and smarter real estate investment decisions, click here.

Mashvisor’s platform pulls out data from various resources, which includes more than 450,000 properties, before presenting you the information you’re after. The “heat maps” this calculator provides help you pinpoint the neighborhoods and areas that match your criteria.

Conclusion

The factors that determine how much you will make from renting your property on Airbnb are numerous. All those variables must be taken into account, which makes manual calculations quite complex. And once you set the pricing, it doesn’t mean you’re done monitoring it. Prices fluctuate and you’ll want to keep track of them in order to make your business remain profitable.

The best real estate investment strategy is always backed by the right numbers. Conduct your research, pick the best property, and move ahead with your investment. Thanks to Mashvisor’s Airbnb pricing calculator, you will take a look at the accurate real estate data and use those numbers to devise the right pricing strategy. Turn a months’ worth of work into a 15-minute effort that will let you focus on other important aspects of the business – handling bookings, marketing, customer services, and managing guests.