Whether you are an experienced real estate agent or someone beginning their career in the short-term rental world, all investors can look to improve their Airbnb profitability in the upcoming year. There are tips and tricks real estate investors can use to increase their return on investment and their profits on their investment properties. This article will explore all of these tips and tricks to help investors improve their Airbnb profitability in 2022.
How Profitable is an Airbnb?
Although how profitable your investment property is will vary by the location the property is located in, your Airbnb has the potential to be extremely profitable. There are many different factors that can help determine how profitable tour Airbnb property can be. One way to help access all of this information in one place is with Mashvisor’s Airbnb Property Calculator. This tool allows investors to calculate the specific profitability of their property. You can input where your Airbnb is located, and specific features of your property, and the Airbnb calculator will show investors accurate data relative to their property. Mashvisor’s Airbnb Property Calculator shows investors Airbnb return on investment, Airbnb rental income, and a short-term rental strategy. Additionally, this Airbnb calculator gives investors data such as costs on interest rates, property tax, and maintenance of the property. All of this data can help investors ensure they are making money in real estate.
What is the Average Airbnb Profit?
It is hard to determine the average Airbnb profit or monthly income, as this number will fluctuate depending on the location of the property, the size of the property, and the style of the property. Additionally, there are other factors that can impact an investor’s monthly Airbnb income such as property tax, maintenance, and repairs that could come out of the income cost. An average Airbnb profitability is difficult to determine, but on average, investors make around $950 a month on an Airbnb property.
An additional factor that can increase Airbnb profitability is how the property was financed. For example, investors will either finance a property by cash, or by a mortgage. These two financing methods create a much different return on investments. This may create some difficulty when trying to determine how profitable your Airbnb investment property may be. Mashvisor’s Airbnb Property Calculator takes how you are planning on financing a property, or how you did finance a property into consideration when determining its return on investment. This Airbnb calculator gives investors accurate data regarding their cash on cash return or cap rate on their short term rental properties. Mashvisor also uses the medians, rather than the averages, to determine these numbers. This excludes all unwanted outliers that averages on other software platforms may have that completely skew the numbers, creating unreliable information. Mashvisor gives investors accurate data when determining how profitable their Airbnb property can be.
7 Tips for Increasing Airbnb Profitability
Now that you understand how to use Mashvisor’s Airbnb Property Calculator to help determine your Airbnb profitability, here are some additional tips to help increase your Airbnb profitability in the 2022 housing market.
Look for a Property in a Popular Destination
One of the best ways to help increase your Airbnb Profitability is by locating a property in a desirable location. Whether this location is desirable because it is a tourist location or just heavily populated, any popular destination will ensure a higher rental income and occupancy rate.
Before purchasing any property though, make sure that city and states guidelines allow Airbnb properties or short term rental properties. Some larger tourist cities do not offer short term rentals. Purchasing a property in one of these places before checking the rules of that city would be a bad investment and cause you to lose a lot of investment money. Always check a cities rules and regulations before purchasing an Airbnb property.
Look for Properties around a Beach Area
Looking for a beach property can be a great way to help boost your Airbnb Profitability. Beaches are always popular destinations when it comes to short term vacation rentals. People will always be looking to travel to the beaches and stay somewhere right on the beach or just a short walk away.
Some potential negatives of beach property for an Airbnb investment are potential weather damage to the property and high insurance costs. Although there are some negatives, these shouldn’t stop you from investing in a beach property as the Airbnb income could be significantly higher than any other type of short term rental.
Look for Airbnb Properties in a City
Any city with a lot of tourist traffic and business travelers can be a great location for your Airbnb property. In cities, you can rent out your Airbnb to both people looking to stay in the city on a vacation, or business travelers needing a place to stay while on business. There are many options of potential renters for people traveling to a city.
Airbnb properties in the city can be in many styles including homes, apartments, or even condominiums. Travelers are always looking for any type of property to stay in. Before purchasing any property in a city though review the city guidelines to ensure that short-term rentals are legal in that city. It would be a waste of investment money to purchase a property you are planning on using as an Airbnb to increase your Airbnb profitability and that city does not allow short-term vacation rentals. Doing your research on the city you are interested in is always smart before purchasing an investment property.
Advertise your Property in both the Peak Seasons and Off Seasons
Depending on the location of your property, there may be seasons in which it is much more profitable and desired than other seasons. Some investors may let this impact their decision to purchase a property in that area. Although there might be more desirable for your Airbnb in a certain season, that doesn’t mean people are not looking to rent it year-round.
You can advertise tour property year-round and offer discounts in the off-season. Even though people then would be renting the Airbnb at a discount, you still can generate a profit and increase your Airbnb profitability. Renting your Airbnb at a discount is better than not having it be rented out at all. Never let the location of an Airbnb property completely impact your decision to purchase it or not, always do your research as to how you can advertise your Airbnb year-round.
Accommodate More People in your Listings
When you are listing out your Airbnb property an easy way to make your Airbnb more profitable is by accommodating more people in your property. Even if your property only has a certain amount of bedrooms and you only think it can fit a certain amount of people, there are always ways to increase your occupancy. Take a search around the property and see what area could be transformed into a sleeping arrangement. Maybe a sleep sofa or pull-out couch could be added to a living room or an office area transformed into another bedroom.
Any way you can increase your occupancy can make your Airbnb more profitable. When people are looking through Airbnb properties to rent, they type in how many people they will be traveling with. Even if your property is big enough to fit a lot of people, but it’s listed only as 3 or 4 occupants, that means your listing isn’t even reaching potential renters. Updating your Airbnb to accommodate more people and adding sleeping arrangements can get your property to reach even more people, and produce an even higher profit.
Add Amenities to your Property
Updating your property and adding amenities that make your Airbnb stand out from the others in the area can help increase your Airbnb profitability. Certain features such as a pool or a hot tub can make your property more desirable to people looking to rent. Even simple things such as providing breakfast can increase the number of people interested in your listing. There are always amenities you can add to your property, big and small, that can have huge increases in your Airbnb profitability.
Help Other Investors Manage Their Listings
Another easy way to increase Airbnb profitability is to be a co-host on other investors’ listings. Although this option may be a little more work on your end, all co-hosts receive a commission on every listing. If you’re in an area in which Airbnb properties are very popular, it is likely other investors would be looking for co-hosts to help them manage the property. A good way to see if other investors are in need of a co-host is to join Facebook groups about real estate investing or reach out to other investors in the area you are friendly with. Becoming a co-host is both a great way to help increase your Airbnb profitability, and increase your real estate network in the area.
Where Do I Find a Property to Invest in?
Now that you have all the tools to have a profitable investment property, you may be having trouble locating a property you are interested in investing in. As the Airbnb demand is high, you want to make sure you make a good decision on what property to invest in. Mashvisor’s Property Finder tool is a great way for investors to find an Airbnb property that fits their wants and needs. The Property Finder tool lets investors search through properties by filtering out the ones that don’t match their desires. You can search through properties by:
- Your budget
- The location you want your property to be in
- The type or style of property
- The number of bedrooms and bathrooms
- Your Airbnb rental strategy
Mashvisor’s Property Finder makes it easy for investors to find their perfect property.
Consider Working With a Real Estate Agent
Once you find a property you are interested in, you need to find a real estate agent to help you purchase this property. All real estate investors know that working with a real estate agent helps get the best price for your investment property, which increases your return on investment in the long run. Use Mashvisor’s Real Estate Agent Directory to search through the profiles of agents in your area. This tool is great as you can read an agent’s real estate portfolio to find an agent who will work well with you.
Mashvisor’s Real Estate Agent Directory has the profiles of real estate agents and breakers all around the United States. Therefore, if you are looking for an agent outside of your local area, Mashvisor’s Real Estate Agent Directory is the best place to look through a variety of agents to find one that will best work with you. The Real Estate Agent Directory tool is a great place for investors to find real estate agents and brokers in any location.
To Recap: Join Mashvisor Today!
There are many ways investors can increase their Airbnb profitability in the 2022 real estate market. Whether it be adding amenities to your property, increasing occupancy, or purchasing a short term rental property in a popular city or location, there are plenty of ways one can increase their Airbnb profitability this 2022. Mashvisor offers many tools that help investors get started in the real estate investing markets such as the Property Finder tool and the Real Estate Agent Directory tool. All of these tools make it easy for investors to find great investment properties.
If you are a real estate investor interested in taking advantage of Mashvisor’s tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life. Mashvisor offers the most accurate and reliable data to investors to ensure they are making a smart decision in their real estate property. Join Mashvisor today to start looking for and analyzing the best investment properties in your city and neighborhood of choice.
