Mashvisor ToolsThe Guide to Using an Airbnb Profit Calculator by Hamza Abdul-Samad December 10, 2016January 30, 2019 by Hamza Abdul-Samad December 10, 2016January 30, 2019If you’re entering any kind of real estate investment, including an Airbnb one, then you definitely need to know if your property will become a lucrative investment. For many, many years, this was done by the use of spreadsheets. Investors would analyze certain areas to see whether or not they had profitable markets or investment properties. Then they would manually enter data into the spreadsheets, which would take a lot of time.Spreadsheets were resourceful products of their time. But now, with digital investment property calculators (including Airbnb profit calculators), spreadsheets are out of fashion and behind the times. Investment property calculators transform months of research into a matter of minutes.Related: Why an Investment Property Calculator is Better than SpreadsheetsDoes Mashvisor provide an accurate and easy-to-use investment property calculator? You bet it does. Using predictive analysis and comparative data, Mashvisor will guide you to gainful traditional and Airbnb properties. In this blog, we will break down what exactly this calculator is, what and how it computes, and what the results mean for you. It will mostly be Airbnb related, but most of the general principles apply to traditional rentals. For more information on that, click here.What is Mashvisor’s Airbnb profit calculator?Mashvisor’s Airbnb profit calculator is a tool that generates predictive figures for a property by simply inputting different costs associated with the property. The results are based off predictive analytics. It may sound like rocket science, but it is really simple to understand. In essence, it is based off past trends and algorithms in order to generate future trends and possibilities.What does it calculate?For all the selected properties in an area, the Airbnb profit calculator will show you important figures you will need to know such as:Cap rate – Cap rate is used to estimate your potential returns on a property. It is the returns a property can potentially generate based on its market value. A cap rate of 10% or more is a good indicator to invest in a certain property.Airbnb occupancy rate – Occupancy rate is the rate at which the property is rented out compared with the total number of days the property is available. For Airbnb, the more guests you have at different times, the higher the occupancy rate.Rental income – The potential rental incomes of the property if it is used as a traditional rental or Airbnb will be projected.Cash flow – This calculates the cash used on the property and the cash generated by the property in a period of time. So basically, the expenses used on a property versus the income from the property.The median home price, return on investment (ROI), and net operating income (NOI) are also calculated for the properties in each neighborhood. To learn more, click here to see what your property search with Mashvisor will look like.Related: Investing in the Right NeighborhoodHow does the Airbnb profit calculator calculate these figures?Now you know what the Airbnb profit calculator computes, but how does it come up with these figures?As we’ve mentioned earlier, the Airbnb profit calculator uses predictive analysis to compute results. The analysis compares the features of nearby properties in a neighborhood. It then shows you which properties have the most favorable of these features for Airbnb.So, what features are compared using the analysis?1.) Nightly Rates2.) Property Revenue3.) Occupancy rates and the number of monthly booking4.) Rental availability5.) Number of bedrooms and bathrooms6.) Property type (single-family, apartment, flat, etc.)These features for different properties come directly from Airbnb, providing you with the most accurate information available.These different factors can provide you with different considerations and results. For example, bookings and occupancy rates will give you an idea of how much you can earn and how often you will have work. The seasonality trends will also become apparent. If the occupancy rates are greatly affected by the season, you might have to reevaluate, according to your goals, of course.What does this all mean for you, the investor?Mashvisor’s Airbnb profit calculator is not just a number cruncher that spits figures at you. The results have tremendous implications to earning higher Airbnb returns.Rental Strategy – The calculator will project the rental income a property can generate if it was used as a traditional or Airbnb rental. This may not always be the deciding factor for which rental strategy to pursue, but do not worry. Mashvisor does include which strategy is optimal in the results.Financing Strategy – Now that you know which property to invest in and the kind of rental strategy to follow, you will need to know the best way to purchase the property. Should you pay in cash or with a mortgage? The interactive Airbnb profit calculator allows you to adjust relevant factors of these payments. The loan type, loan amount, interest rate, and down payment level can be altered depending on your goals and plans. This will change the results. Overall, you can determine the financing strategy you want very quickly by changing the desired variables.Investment Valuation Score – To summarize all the calculations and get straight to the point, Mashvisor shows an investment valuation score. This score, expressed as a percentage, evaluates the investment opportunity the property can provide. The higher the percentage, the better the investment opportunity. It is based on some of the factors discussed in the blog, such as cash-on-cash return, cap rate, neighborhood rating, as well as others such as, property design and rent appreciation rate.Related: Why an Investment Property Calculator Tells You More than Just NumbersIf you could only use one tool to determine the returns on an Airbnb property, then Mashvisor’s Airbnb property calculator is the way to go. With a detailed yet easy to navigate system, you will learn more about the property and see if it fits your investment plans.There’s more to making money through Airbnb with calculations; be sure to visit Mashvisor’s blog to learn more about Airbnb management, advice, and potential issues.For all things on Airbnb properties, visit Mashvisor. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL AirbnbCap RateCash FlowGuidesInvestor ToolsTechnology 0FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-SamadHamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. 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