Mashvisor’s Airbnb property profit calculator can help you identify the location and home that would give you solid returns. Read on for more.
Real estate investing is all about numbers. When you’re armed with the right tools along with high-quality data and information, your chances of success go up. This is where Mashvisor’s Airbnb calculator comes in handy.
Table of Contents
- How Much Can You Earn on Airbnb?
- What Is an Airbnb Property Profit Calculator?
- How Does an Airbnb Property Profit Calculator Work?
- What Are the Benefits of Using an Airbnb Property Profit Calculator?
- Where to Find the Best Airbnb Property Profit Calculator
- The Top 10 US Cities for Airbnb Investment in 2023
With short-term rentals becoming more popular, investing in an Airbnb income property is now up to three times more profitable than owning a traditional rental home. But at the same time, the market is now more saturated, making competition to get bookings more intense.
As a result, it is more important than ever to estimate your return on investment in a property before you decide to buy it. The best way to do it is by using an Airbnb profit calculator.
In this article, we will take a look at one of the most powerful tools a real estate investor should use by answering your very important questions about an Airbnb calculator.
We will also discuss your potential revenue on an Airbnb property and show you the top US cities for Airbnb in 2023. If you are looking for a tool that can help you find the best Airbnb investment property this year, keep reading.
How Much Can You Earn on Airbnb?
As mentioned in the introduction, the rental income on Airbnb can be up to three times higher than traditional rental income. But it depends on three main factors:
- Location — Is the Airbnb property in a tourist hotspot or a business district? Does it get visitors year-round, or only during certain seasons?
- Property type — Do guests only book a room, or do they have the entire place to themselves? How many guests can stay at once?
- Occupancy rate — How often does it get booked in a month or year?
According to Airbnb’s Fast Facts, the company’s overall earnings were $180 billion as of the end of December 2022. There are over 6.6 million active listings on the platform around the world, managed by 4.4 million hosts. More than 150 million people use Airbnb as their go-to platform for booking their vacation stays.
Using Mashvisor’s data as of early March 2023, the median income of an Airbnb property in the US is $2,901 per month or $34,812 per year.
The above figures are higher than the federal minimum wage. Thus, it is no wonder why homeowners and even renters host a part of their property on Airbnb. Investors who want to start a rental property business are able to pay back their mortgage and eventually expand their portfolio thanks to the high returns.
But to ensure your success in this endeavor, you need to estimate your investment payback with the property you wish to buy.
What Is an Airbnb Property Profit Calculator?
Also known as an Airbnb estimator, the Airbnb profit calculator helps determine the approximate earnings of a home if it was rented out as a vacation rental. It usually bases its estimates on the following:
- Property type and size
- Location
- Selling price
In addition, investors also refer to the performance of actual Airbnbs similar to the house you are analyzing in the same neighborhood or zip code.
Using comparable properties, or rental comps, in the same area is crucial to making an accurate analysis as they define an Airbnb rental’s profitability.
The Airbnb calculator allows real estate investors and aspiring Airbnb hosts to run efficient analyses and make smart decisions on where they should invest.
Beginners would feel more confident about starting their own Airbnb business when they know that they can actually make a profit. And investors who are already overseeing several rentals can decide on whether to invest without leaving their homes to tour the place.
How Does an Airbnb Property Profit Calculator Work?
You can find more than one Airbnb income calculator online. While they are different from each other, they also share a few similarities. A basic Airbnb investment calculator may require you to input the following information:
- The address of the property you are analyzing
- The number of bedrooms
- The number of bathrooms
- How many people it accommodates
Using the said details, the calculator would find Airbnb properties with similar characteristics in the same area as the home you are analyzing. It will then get the average metrics from the rentals, such as the monthly or annual income, average daily rate, and occupancy rate. Some even provide a forecast for a few months or several years.
Other calculators also include an overview analysis of similar rentals in the neighborhood. Meanwhile, other Airbnb revenue estimators need you to input more details, such as:
- Property purchase price
- Down payment, if applicable
- Mortgage details such as duration and interest rate, if applicable
- Running expenses such as property taxes, insurance, utilities, and more
Depending on what needs to be indicated in the calculations, there might be variables that beginner investors are not familiar with. A good calculator will give concise explanations for each variable that requires input. This way, anyone who uses it will understand what they are typing into the calculator and why they need to take it into account.
After inputting the needed information, the calculator will then display its estimates for the following metrics:
Monthly Rental Income
The monthly rental income is your total earnings in a month from renting out your Airbnb property. While some Airbnbs earn higher than others, it does not tell a complete story. For example, a rental might bring in $5,000 a month from bookings but may incur $4,000 in running expenses. Meanwhile, a $3,000-per-month rental may run $1,500 in costs.
What matters most when evaluating a property’s potential monthly rental income is how much profit or cash flow you can take to the bank at the end of the day.
Cash Flow
Cash flow is the difference after deducting your expenses, including your mortgage, from your monthly income. The cash flow is the lifeline of your Airbnb operations.
Making money in real estate would be impossible with a negative cash flow. But with a positive cash flow, your Airbnb income is covering your expenses and leaving you enough money to spend elsewhere or save for future investments.
Cap Rate
Cap rate, which is short for capitalization rate, is one of the most commonly used metrics for comparing investment properties. It is similar to estimating the rate of return. A simple formula for calculating the cap rate is by dividing the annual net operating income by total acquisition costs. However, some Airbnb estimators may include other variables in their calculations.
Occupancy Rate
Occupancy rate is the number of nights an Airbnb property is rented divided by the total nights it is available for booking in a month or year.
It is one of the most important performance indicators for the short term real estate investment strategy. In general, the higher the occupancy rate, the more revenue the Airbnb property generates. However, it does not always apply. You also have other factors to consider, like the average daily rate you can charge.
What Are the Benefits of Using an Airbnb Property Profit Calculator?
Using an Airbnb calculator helps you estimate how much a property can earn as a short-term rental based on Airbnb demand and other factors. It can also give you insight into how to optimize your existing rental property. You get all of the said information upon entering the details that the calculator needs.
An Airbnb calculator is useful for figuring out the most profitable location for your rental strategy. If you want to know which among your preferred cities, neighborhoods, or properties is the most lucrative, it can point you in the right direction.
If the calculator you use asks for the address of the property you are analyzing, it will likely give an estimated monthly rental income based on the active Airbnbs in the area. It is especially useful for those who want to find out how much they can earn with a particular property in the said neighborhood.
Additionally, by typing in your running expenses, the calculator can show whether you will achieve a positive or negative cash flow at the end of each month.
The above are just some of the benefits of using an Airbnb calculator. However, it is important that you find one that gives all of the information you need to make good and informed investment decisions.
Where to Find the Best Airbnb Property Profit Calculator
In competitive industries like short-term rentals, making data-driven decisions is one of the keys that will lead you to success. But you cannot just use the first Airbnb investment calculator that you find online; you must also make sure that the tool you are using gives you the information you need in an accurate and efficient way.
This is why Mashvisor is the best tool for real estate investors. Mashvisor is a real estate platform that’s been helping people make wise investment decisions since 2015. It gives investors like you high-quality data and relevant information, as well as the necessary tools needed to land those great investment deals.
More than an Airbnb calculator, it turns months of market research efforts into 15 minutes, making it perfect for both beginner and experienced investors who need to find an investment property fast.
And instead of just asking you to enter the address of the property you wish to analyze, we also help you search the thousands of homes for sale that were listed on the MLS database.
How the Mashvisor Airbnb Calculator Works
Once you find one or a few houses that you wish to analyze, you can find our Airbnb calculator on each listing page. There, we‘ve already estimated the rental income, expenses, and occupancy rate of each property based on the comps and standard costs in the area.
Mashvisor’s new Airbnb calculator
However, you are welcome to customize the amounts and add other expenses that were not listed in the breakdown so you will get a more tailored analysis.
If there is a term in the calculator that you wish to know more about, just hover over it or the “?” icon and a short description will pop up. Every time you update a variable, our calculator automatically updates its analysis; no need to refresh the page.
Aside from providing the monthly income, expenses, and cash flow, we also calculate the following:
- Cash on cash return — If you are buying a property using financing, the cash on cash return metric calculates your rate of return based on how much you have paid toward your mortgage. It is a more accurate way to measure ROI compared to the cap rate.
- 10-year investment payback balance — This is your accumulated profit after 10 years after deducting your total one-time and recurring costs, including your mortgage.
Who Can Use Mashvisor’s Airbnb Property Profit Calculator?
Mashvisor’s Airbnb calculator is a versatile tool for determining and maximizing the profitability of a rental investment property. But who exactly can use it?
- Beginner investors: When you are new to the industry, it can be overwhelming to find your first investment property with all of the factors you need to consider. Mashvisor’s calculator and other features simplify all of that while helping you learn more about investing.
- Investors who want to expand to a new market: If you are planning to buy a property in an unfamiliar state, city, or neighborhood, having the right tools at your disposal can help you find the right investment. Our calculator can analyze any property in the US and also help you find a lucrative property that is currently for sale.
- Owners of second homes: Even if you are not a career investor, you might be thinking about turning your secondary residence into a short-term rental property. By uploading details about your home into our database, our calculator will be able to analyze and estimate the projected income that your property will generate.
- Real estate agents: If you want to work with real estate investors who are looking for a new investment property, using Mashvisor’s calculator will help establish your credibility.
- Rental arbitrage investors: Our calculator does not only analyze a property’s potential as a short-term rental. We can also determine if it is more optimal as a traditional rental home. The tool could then help you find a property that would do well with either strategy.
How Is Mashvisor’s Airbnb Property Profit Calculator Accurate?
Unlike other calculators that pull data from all active Airbnb listings and get the average figure, our AI tends to be more selective.
For our estimates, we only use the data pulled from Airbnb listings that are not just active but are also verified or have received at least three reviews on the platform. It means that we are only using the data from Airbnb properties that are already doing well while ignoring the listings of hosts who may still be giving the platform a try.
The above method helps us make sure that the information we give is based on existing successful short-term rentals.
We also get the median figures instead of the average for greater accuracy. It eliminates any outlier data, which may skew the results and compromise the overall analysis.
For other variables in the calculator, such as mortgage and expenses, we use the latest data collected from Redfin and public records. As for the listings of properties for sale, they are taken directly from MLS websites, which can only be accessed by licensed real estate professionals.
Lastly, we verify the accuracy of the data we collect by comparing them to other sources, such as Realtor.com, Zillow, and Auction.com, among others.
Each of the above websites provides different data. MLS, Realtor.com, and Zillow include the details of the properties for sale, such as the description, price, size, and more. Meanwhile, Auction.com provides data on foreclosed properties that are still available for purchase.
Start using Mashvisor today to get access to its Airbnb property profit calculator and other tools to get you on your way to a thriving real estate investing career.
The Top 10 US Cities for Airbnb Investment in 2023
To give you a taste of how Mashvisor’s investment tools can help you, we used the platform to find the top 10 US cities for Airbnb investment this year. All of the information shown provided is based on the data we collected from the aforementioned, as well as Airbnb itself.
Due to different market behaviors and trends, the following rankings and data might change over the next few weeks. Be sure to sign up to get the latest information.
According to Mashvisor’s March 2023 Airbnb data, the following ten locations are ideal for Airbnb investments in 2023. We went through the site’s massive database and used the following criteria to filter this list:
- Each location must have no more than $1,000,000 in median property price.
- Each location must have at least 100 active Airbnb listings to indicate demand.
- Each location must have a minimum monthly rental income of $2,000.
- Each location must have no less than 2% cash on cash return on vacation rentals.
- Each location must have a 50% and above Airbnb occupancy rate.
The locations below are ranked from those with the highest to the lowest cash-on-cash return.
1. Northlake, IL
- Median Property Price: $323,180
- Average Price per Square Foot: $217
- Days on Market: 139
- Number of Airbnb Listings: 120
- Monthly Airbnb Rental Income: $4,269
- Airbnb Cash on Cash Return: 8.29%
- Airbnb Cap Rate: 8.44%
- Airbnb Daily Rate: $171
- Airbnb Occupancy Rate: 53%
- Walk Score: 33
2. Columbia Heights, MN
- Median Property Price: $294,482
- Average Price per Square Foot: $142
- Days on Market: 22
- Number of Airbnb Listings: 314
- Monthly Airbnb Rental Income: $3,724
- Airbnb Cash on Cash Return: 8.06%
- Airbnb Cap Rate: 8.21%
- Airbnb Daily Rate: $158
- Airbnb Occupancy Rate: 58%
- Walk Score: 82
3. Bridgeton, MO
- Median Property Price: $264,711
- Average Price per Square Foot: $136
- Days on Market: 23
- Number of Airbnb Listings: 120
- Monthly Airbnb Rental Income: $3,291
- Airbnb Cash on Cash Return: 7.69%
- Airbnb Cap Rate: 7.83%
- Airbnb Daily Rate: $154
- Airbnb Occupancy Rate: 58%
- Walk Score: 3
4. Rileyville, VA
- Median Property Price: $332,031
- Average Price per Square Foot: $192
- Days on Market: 15
- Number of Airbnb Listings: 155
- Monthly Airbnb Rental Income: $3,733
- Airbnb Cash on Cash Return: 7.57%
- Airbnb Cap Rate: 7.69%
- Airbnb Daily Rate: $236
- Airbnb Occupancy Rate: 56%
- Walk Score: 10
5. Harahan, LA
- Median Property Price: $398,200
- Average Price per Square Foot: $209
- Days on Market: 57
- Number of Airbnb Listings: 111
- Monthly Airbnb Rental Income: $4,022
- Airbnb Cash on Cash Return: 7.46%
- Airbnb Cap Rate: 7.57%
- Airbnb Daily Rate: $137
- Airbnb Occupancy Rate: 59%
- Walk Score: 56
6. Harpers Ferry, WV
- Median Property Price: $384,688
- Average Price per Square Foot: $239
- Days on Market: 64
- Number of Airbnb Listings: 118
- Monthly Airbnb Rental Income: $3,956
- Airbnb Cash on Cash Return: 7.17%
- Airbnb Cap Rate: 7.27%
- Airbnb Daily Rate: $187
- Airbnb Occupancy Rate: 51%
- Walk Score: 0
7. Columbia, MO
- Median Property Price: $277,834
- Average Price per Square Foot: $144
- Days on Market: 81
- Number of Airbnb Listings: 252
- Monthly Airbnb Rental Income: $2,758
- Airbnb Cash on Cash Return: 7.16%
- Airbnb Cap Rate: 7.34%
- Airbnb Daily Rate: $138
- Airbnb Occupancy Rate: 58%
- Walk Score: 30
8. Lyons, IL
- Median Property Price: $269,543
- Average Price per Square Foot: $210
- Days on Market: 88
- Number of Airbnb Listings: 173
- Monthly Airbnb Rental Income: $3,164
- Airbnb Cash on Cash Return: 7.11%
- Airbnb Cap Rate: 7.27%
- Airbnb Daily Rate: $166
- Airbnb Occupancy Rate: 53%
- Walk Score: 65
9. Broadview, IL
- Median Property Price: $251,790
- Average Price per Square Foot: $208
- Days on Market: 83
- Number of Airbnb Listings: 307
- Monthly Airbnb Rental Income: $3,189
- Airbnb Cash on Cash Return: 7.04%
- Airbnb Cap Rate: 7.18%
- Airbnb Daily Rate: $164
- Airbnb Occupancy Rate: 59%
- Walk Score: 77
10. Crystal, MN
- Median Property Price: $272,519
- Average Price per Square Foot: $165
- Days on Market: 56
- Number of Airbnb Listings: 208
- Monthly Airbnb Rental Income: $3,110
- Airbnb Cash on Cash Return: 6.95%
- Airbnb Cap Rate: 7.08%
- Airbnb Daily Rate: $163
- Airbnb Occupancy Rate: 52%
- Walk Score: 59
Note: This list does not automatically indicate that Airbnb–especially non-owner-occupied rental–is legal and allowed in the cities mentioned. The data presented are solely based on information collected from Airbnb’s website. We recommend contacting the respective local government about their short-term rental regulations before committing to your purchase.
To get access to our real estate investment tools, click here to sign up for Mashvisor today.
Find Your Next Airbnb Investment Property With Mashvisor
Investing in Airbnb properties is a very rewarding experience if done right. It is not, however, a matter of jumping on the Airbnb bandwagon just because a lot of investors made a decent profit from it. You still need to do your due diligence if you want to succeed.
Part of the required due diligence is knowing what type of data and information to look for, where to look for them, and what tools are needed to come up with an accurate Airbnb analysis. This is where a website like Mashvisor comes in.
Mashvisor has a massive database that covers nearly every market in the US. Its short-term rental data contains all the information you need for good rental property analysis. Its tools, like the real estate heatmap and investment property calculator, will help you find the best possible deals in the most profitable markets.
With Mashvisor’s Airbnb property profit calculator, you can search for lucrative investment opportunities, optimize your current short-term rental property, and pitch to fellow investors.
Learn about how Mashvisor can give you access to an Airbnb property profit calculator to locate the best deals in the most profitable markets by scheduling a demo now.