The Airbnb Profitability Calculator: The Best Friend of the Short Term Rentals Investor

As a short term rental investor, the first thing you need to be profitable is the Airbnb profitability calculator. This article shows you why.

As an investor, the Airbnb profitability calculator should be your best friend. Why? Because this handy instrument ensures that you make a wise investment. The calculator accurately determines the earning potential of your short term investment.

Table of Contents

1. How Much Can You Make on Airbnb?
2. What Is an Airbnb Profitability Calculator?
3. What Does an Airbnb Profitability Calculator Tell You?
4. How Can an Airbnb Profitability Calculator Help Grow Your Investment Business?
5. What Factors Does the Airbnb Rental Calculator Take Into Consideration?
6. Where to Find the Best Airbnb Profitability Calculator

Because you are a smart investor, you know that you have to do your due diligence on a property before you get the ball rolling. This means that you should know the most important metric when it comes to real estate investing. Which is the income potential of this property. This is where the Airbnb profitability calculator comes in.

In this article, you will discover what the Airbnb profitability calculator is. You will also learn how Mashvisor, which has the best Airbnb calculator, can help you accurately pinpoint the profitability of your property.

How Much Can You Make on Airbnb?

Whether you are a new or experienced investor, the real metric you look at is how much you can make on short term rentals. To answer this, you have to look at factors like the location of your Airbnb property and its occupancy rate. Also, you need to know how much you can charge as rent on a property in that neighborhood.

Once you can answer these questions and more, you can easily estimate how much you can make on your Airbnb property. The thing is, Airbnb is a great way to earn a side income, and you can even make some good cash. This is why some real estate investors have made hosting short term rentals their major business.  

About how much you can make on Airbnb: according to research by Earnest, the revenue an Airbnb host can make is around $924 every month. Note that this number is the average amount, and there is no real specific answer to this question.

To know how much you can make from an Airbnb property you are looking at, your best bet is to use a good Airbnb profitability calculator with good artificial intelligence technology. This tool will help you accurately estimate how much you will make from an Airbnb property. Thereby removing any form of guessing and mistakes on your part.

What Is an Airbnb Profitability Calculator?

An Airbnb profitability calculator is the same as an investment property calculator or rental property calculator. It is a tool real estate investors, in general, use to calculate the return on their investment properties. It is especially important when buying a short term rental property. 

An investor only needs to provide all the costs that are associated with their short term rental property, and the calculator will do the rest.

For this purpose, the Airbnb calculator uses past real estate analytics as well as real estate comps to determine future market trends for short term rentals. Real estate investors also use it to determine the most profitable locations for short term rentals.

How Does an Airbnb Profitability Calculator Work?

The first thing an Airbnb profitability calculator does is to identify the location of your property. This is a major indicator of how much you can make from that property. Note that there are different calculators for different areas. This is even better because you get more accurate data.

What you have to do is enter the address of the property you are looking to invest in into the calculator, including the other required data. Then the calculator will show you an estimate of how much you could make on the property. 

This helps you as an investor get better insights into the property you want. It also helps you make smart decisions so that you do not end up losing money.

You can use the estimate provided to you by the calculator to determine how much you would charge for your property every month. 

Related: The Guide to Using an Airbnb Profit Calculator

What Does an Airbnb Profitability Calculator Tell You?

The Airbnb profitability calculator calculates the basic real estate metrics. These metrics are the soul of every investment regardless of the rental strategy. Here are the most important metrics that you should pay attention to.

Cash Flow 

The cash flow of a property is the rent minus the property expenses. The number you are left with is the money you get to keep for yourself. The cash flow is important to determine whether a real estate property has profit potential or not. 

Cash flow is the lifeline of any business, and real estate is not exempted. Therefore, if a rental property calculator is showing that the property is not generating positive cash flow, you might want to reconsider your investment.

Capitalization Rate (Cap Rate) 

The cap rate is the ratio you get by dividing the net operating income by the property’s market value. If you get a cap rate of 10% or higher, it is an indicator of a worthwhile investment property. 

However, you should keep in mind that the cap rate alone is not the ultimate way to spot an investment property with a good return on investment. You will need to figure out other metrics along with the cap rate to find the best short-term rental properties.

Related: What Is Cash on Cash Return in Real Estate?

Rental Income 

The potential rental income is also calculated by the Airbnb profitability calculator. That is a good way to tell right away if you want to invest in a certain property. It can also help you compare different investment properties and choose the best. 

Keep in mind that this does not mean that the result you get is a given. The Airbnb profitability calculator only produces estimated figures based on comparable data from external sources and your inputs.

Airbnb Occupancy Rate 

This is a very important indicator of a short term rental property. This indicates the ratio of time in which the property is occupied to the total number of days it is available for booking. If you have low occupancy rates, then you might want to look at the reasons causing it. Factors like location, marketing, and Airbnb guest reviews are important to keep occupancy rates high. 

How Can an Airbnb Profitability Calculator Help Grow Your Investment Business?

As we already mentioned, an Airbnb profitability calculator calculates the most important real estate metrics for your rental property. So, when real estate investors have an estimated positive cash flow for their property, it will be easier to determine whether they will be able to grow their business.

Here are other ways this profitability tool can help grow your investment business:

Figure Out Trends

A good Airbnb profitability calculator can help you as an investor to identify the present and future trends of the real estate market. This tool can help an investor like yourself to make smart decisions in choosing the location in which to invest.

Pricing trends are also important to note as an investor. This will help you figure out if you should buy a property now due to an increase in prices. Or maybe you should hold off investing because the tool predicts a fall in prices in the nearest future.

Identify Potential Rental Income

A good Airbnb profitability calculator can help you identify how much you will make on your investment. It accomplishes this by identifying the cap rate, cash flow, and occupancy rate of the property.

These important metrics let the calculator easily estimate how much the rental income of the property will be.

Provide Accurate Data for the Property

The Airbnb profitability calculator is a tool that an investor can trust because it gives them an accurate result on any property or neighborhood. It gets its data from reliable sources; the same ones that real estate experts use to prepare their reports. 

Some sources are so important that they are not allowed to be used anywhere outside of the real estate industry, making them a vital tool for Airbnb hosts.

Give You a Competitive Advantage

The Airbnb profitability calculator, if you use it, gives you an advantage over your competition. The tool will help you identify profitable properties before your competitors can even get a sniff. 

You will have a leg up over competitors who do not know that they can use a profitability tool to reduce their research time in half. You will even be better off than those competitors who do not use good tools like Mashvisor.

In business, the person with the most knowledge wins. And since you now know that you can use a great tool like Mashvisor’s Airbnb calculator to grab profitable properties, you are ready to crush it in the short term rental market.

Conduct Property Search

Instead of spending weeks and months searching for the best and most profitable property in a particular neighborhood, the profitability calculator does that for you in minutes. 

No smart investor goes around looking for properties, wasting resources. Instead, they use tools like the Airbnb profitability calculator that help them save time and money. They also ensure that they don’t make any costly mistakes and provide them with the most profitable property they can find.

The Airbnb profitability calculator accomplishes all these in minutes.

Analyze Investment Property

The Airbnb profitability calculator also helps the investor conduct an accurate investment analysis on the property. Apart from the fact that it will help you know how much the property makes daily, monthly, and yearly, it also does a comprehensive analysis to ensure that you are making a sound investment. 

A property might show that it brings in a lot of money monthly, but it might also have a ton of things for repair and many dues to be paid. And when you pay for these things, you may not have as much income as you thought.

The Airbnb profitability calculator helps to avoid this by conducting an investment analysis to ensure that you are getting a good deal.

Earn More Money

Since the Airbnb profitability calculator shows you profitable properties to invest in, you’ll be able to bring in more money for your investment business. 

You then use the profits you have made to invest in another profitable short term rental property that you found using this Airbnb profitability calculator. This, in turn, will also bring in more money.

Now all you have to do is rinse and repeat this process until you are satisfied. You can do this for as long as you want. It only depends on how much money you want.

Related: What Can You Do to Always Have Strong Positive Cash Flow Income Property?

What Factors Does an Airbnb Rental Calculator Take Into Consideration?

Here are a few factors that the calculator takes into consideration when calculating the profitability of your property.

Location

First of all, the location of your property plays a major role in this. Your investment property’s location affects its potential in terms of cap rate and occupancy rate. This is because, in terms of occupancy rate, there are places that are more attractive to tourists and places that are less attractive.

If you are looking at a property in a less attractive location, the chances that you will make a profit are low. But if you plan on investing in a more attractive location like Miami, the chances that you will make a killing is high. This is because Miami is a haven for both citizens and tourists.

Therefore, if you want the Airbnb profitability calculator to favor you when it estimates your income, choose a location that has the most chances of success. When you do this, you will eliminate most of the challenges that you may encounter if you choose a location that is not well-favored by travelers.

Seasons

Another important factor is the seasons. There are seasons when the demand for short term rental properties is high. For instance, the demand for short term rental properties is usually high during the holidays. The calculator considers this.

That is the beauty of this tool. Instead of bundling up data for the whole year, the calculator ensures that seasonality is considered when calculating the potential income on a property.

Amenities

Amenities are another major aspect. Your property’s pricing also depends on the amenities available for guests. 

If the location you are looking at does not have great amenities like shopping malls, security, and power, the chances of the profitability calculator giving it a favorable potential income estimate are low. 

You have to understand that people look at these things when looking for a place to stay for their vacation. If they realize that there are no attractive amenities that can make their lives easier and more fun, they will find another place. This will also reduce the demand for properties in that area which will, in turn drive down the income potential of homes in that neighborhood.

The profitability calculator picks up on this using its algorithm learning machine. When you run the property through the profitability tool, if it lacks basic amenities, the calculator will let you know that you may not make any profit from that investment.

Similar Properties

The profitability calculator looks at other similar properties in the neighborhood and how much they make to estimate the potential income of your property accurately. 

Let’s assume that your property has three bedrooms and four baths and is 4,500 square feet. If there are three or four similar properties on Airbnb for $200 per night, you should also price your property for that same rate to stay competitive.

This tool uses comparative analysis to estimate how much income your property will make due to the average amount of income similar properties make.

Where to Find the Best Airbnb Profitability Calculator

Not all Airbnb profitability calculators are the same. It is one thing to have just any calculator at your disposal, and it is another thing to have a good and reliable Airbnb profitability calculator. And as a serious investor, you probably know that you cannot take any chances on something as important as real estate investment.

This is why you must invest in the best profitability calculator in the market. And you can find it at Mashvisor. It uses artificial intelligence that learns big data to analyze properties and give you the best income estimate accurately.

With these estimates, Mashvisor’s profitability calculator tool helps you find the best properties to invest in without the possibility of coming at a loss. Just input your location and other relevant information in the tool, and voila, it spits out the most profitable properties you can invest in.

Start your 7-day free trial with Mashvisor’s Airbnb profitability calculator.

Conclusion

The Airbnb profitability calculator is the best friend of the short term rental investor because it helps to avoid the possibility of investing in a bad property. It does this by calculating the daily rate of a property and how much you can earn on the property monthly. 

When looking at a property to invest in, using the numbers provided to you by an Airbnb profitability calculator can be the best decision you ever make. This is because, as mentioned earlier, it is a great tool that gives you the most accurate numbers on a property. You also do not have to spend time researching a property.

If you choose to rely on a tool like Mashvisor’s Airbnb profitability calculator, you will cut down your research process significantly. This is because Mashvisor’s profitability calculator tool has gone through the hassle of sourcing accurate information and providing you with data that will guarantee that you make a profit.

Input the location of the property you want, in addition to other basic information, and let Mashvisor’s Airbnb profitability calculator handle the rest.

Schedule a demo today to try Mashvisor’s Airbnb profitability calculator.