Finding reliable Airbnb rental data is one of the essential steps to launching a vacation rental business if you want to succeed in this space.
Table of Contents
- Why Invest in Airbnb Rental Properties?
- Defining Airbnb Rental Data
- How to Find Airbnb Rental Data: The “Old School” Way
- The Efficient Way to Find Accurate and Updated Airbnb Rental Data
- Why Real Estate Market Analysis Is Important
- Important Metrics Investors Should Keep an Eye on
- Why Mashvisor Is the Most Efficient Way to Find Airbnb Rental Data
- How to Interpret Airbnb Rental Data
- The Bottom Line
But how does one find this real estate data? Where should investors go? In this blog, we will discuss the most efficient way to find Airbnb rental data along with other real estate investment tools that will increase investor confidence.
Why Invest in Airbnb Rental Properties?
Airbnb has become one of the most successful innovations in the hospitality industry, which led to its status as a global phenomenon. For those who are unfamiliar with Airbnb and what it’s all about, it is simply a platform that allows people to rent out spare rooms or properties as short term home rentals for tourists and visitors.
While still a relatively young short term rental company, Airbnb already has over 150 million active users worldwide and more than half a billion guests in Airbnb homes annually. Here are some noteworthy numbers concerning the vacation rental home-sharing platform:
- There are around 5.6 million Airbnb listings globally.
- At least 100,000 cities have active Airbnb listings.
- Over 150 million folks use the platform for booking accommodations and experiences.
- There have been over a billion people who stayed in Airbnb homes.
- The short term rental company has listings in over 200 countries.
- At least 60% of platform users are millennials.
- As a vacation rental platform, it is presently worth $113 billion.
These statistics make investing in a rental property and having it listed on Airbnb an ideal business venture among many real estate investors. However, just like any other business, exhaustive research and analysis need to be done to see if it truly is worth investing in. For this reason, gathering the most relevant data is crucial.
Related: Is Airbnb Profitable in 2022?
Defining Airbnb Rental Data
Airbnb rental data simply pertains to all the relevant information and data about Airbnb properties and markets. This data includes, but is not limited to, the following key performance drivers:
- Median property price
- Monthly rental income
- Cash on cash return
- Cap rate
- Daily rate
- Occupancy rate
On top of that, investors also need to find out the local regulations and legislation on short term rental properties as well as Airbnb rental comps. Data gathering and Airbnb data analytics are crucial parts of the process of launching an Airbnb business. This means that performing due diligence will be quite an overwhelming—and usually exhausting—task that investors need to do.
How to Find Airbnb Rental Data: The “Old School” Way
Back when technology wasn’t as easily accessible, real estate investors had to do things the hard way to gather important information and data about particular markets they were considering. The process involves plenty of going to places to get the proper documents and talking to the right people. From going to local civil registry offices to setting appointments with real estate agents, the entire process of data gathering the traditional way is costly and time-consuming especially when you’re from out o town.
This is especially harder for folks who want to look for investment properties outside their backyards. Out-of-state investments back then only typically involved the most affluent investors who can easily afford to make several out-of-town trips to check out a prospective investment property. Those who aren’t as financially well-off had to settle for whatever options they have left in their area.
As far as rental properties are concerned, since Airbnb was launched in 2008, technology has become a handy tool for investors to gather essential information on different markets and connect with real estate professionals online. This made out-of-town investing a lot easier and more accessible to regular folks who have been wondering how to invest in real estate, specifically Airbnb properties.
However, back then, gathering Airbnb data still proved to be a chore despite all the 21st-century technology available. Airbnb was—and still is—a relatively new company; market information wasn’t as accurate and accessible before as it is today. This meant that, though the research process can now be done online, there’s not enough information to go by. Investors still found it hard to conduct an Airbnb analysis due to a lack of available data.
The Efficient Way to Find Accurate and Updated Airbnb Rental Data
It is very important to any investor that they have as much information on hand before purchasing a rental house or any real estate investment property for that matter. It would be totally irresponsible, not to mention insane, to make a huge purchase without gathering sizable market information and data. Market research is one of the very first things investors should do before making the jump. This helps investors have an idea of how viable a project is and if the location is right for them.
Real estate market research helps investors understand the market, know how much properties are worth in the area, what prices they can put on the property, and other vital information. Everything they gather helps them locate the right investment property that meets all their goals, preferences, and budget.
Why Real Estate Market Analysis Is Important
There are several reasons why investors should never ever skip this entire process. But the main reason real estate market analysis is crucial is that it allows folks to invest and buy safely and confidently.
The other reasons are:
- Identifying which city to invest in
- Finding out the different challenges that could potentially hinder and harm an investment
- Knowing the demographic aspects of the market to help determine the area’s evolution
- Determining a property’s appreciation rate and profitability
There are also a few types of data analysis for investment properties. The first one is the state-level analysis, which shows how a specific state performs overall in the rental property market. The second is the city-level analysis, which investors use to determine which specific town or city is worth investing in.
Once an investor already has a specific city in mind, the third type of analysis takes place, which is the neighborhood analysis. This helps them determine which parts of the city will help them achieve their investment goals. In this case, this will help them identify which neighborhoods are ideal for Airbnb rental properties.
Lastly, there’s the investment property analysis, which focuses on a specific property and its characteristics. Once an investor is satisfied with all the details of the property, all parties involved can now proceed with the inspections, the offer, and the closing.
To put it simply, real estate market analysis allows investors to have a bird’s eye view of the market as well as a better understanding of its present conditions and future potential.
Important Metrics Investors Should Keep an Eye on
Folks considering investing in Airbnb properties should keep an eye out for the following metrics:
Median Property Price
A median property price or value typically gives investors an idea of how affordable properties are in a certain location. According to Mashvisor’s data, the median price for properties by the state is $555,856. Wyoming, surprisingly, has the highest median price with $1,213,522 while Iowa has the lowest median with $252,609.
This particular information is important because it is a more accurate representation of a market’s housing affordability compared to an average property price. It helps alert buyers to overpriced properties in a market as well as points them to inexpensive properties with great income-generating potential.
Airbnb Monthly Rental Income
An Airbnb business feasibility study would not be complete without knowing how much potential income a property can generate. An Airbnb monthly rental income based on Airbnb comps gives investors a general idea of how much they can make in a month if they choose to have their properties listed on Airbnb.
Airbnb Cash on Cash Return
There are two ways to determine the return on investment of a property. The first—and most ideal—one is the cash on cash return rate. This basically tells you how much money you can potentially earn on a property for every dollar you have invested in it. This simply means that its profitability is based on how much money you can make in a year against the total amount of cash you put into the property.
This is a very important metric to watch out for because, on top of the cash investment, it also takes into account debt services and the financing option used to purchase the property.
Airbnb Cap Rate
The other metric investors use to determine property profitability is the cap rate. Generally, the cap rate is somewhat similar to cash on cash return with the main difference being instead of the total cash invested in the property, the net operating income is divided by the property’s current market value.
One thing investors should know about cap rates is the higher the cap rate, the higher the risk. The logic here is that higher cap rates indicate higher returns, which also indicate greater risks. This is why higher cap rates are most likely found in riskier markets, and why larger and more stable markets like New York and DC have lower Airbnb cap rates of 1.12% and 1.36%, respectively. In contrast, states like Hawaii and Alaska have higher Airbnb cap rates of 4.85% and 4.97%, respectively.
Airbnb Daily Rate
Investors can easily determine the going Airbnb daily rates in a certain neighborhood with the use of rental comps. Knowing how much similar properties are going for as vacation rentals gives you an idea of how much you can charge for a nightly stay. You can easily set competitive prices that will still give you a decent income to help cover your overhead costs and make a profit.
Airbnb Occupancy Rate
One of the downsides of owning an Airbnb or traditional rental property is that its operating and maintenance costs are generally the same whether they’re occupied or not. For short term rentals like those on Airbnb, the higher the occupancy rate, the bigger their income is. Markets that have very low Airbnb occupancy rates are not conducive to this type of real estate investment strategy. This means you should look at a different location if you expect to earn substantially on your investment.
The above-mentioned metrics are used by thousands of investors to determine a vacation rental property’s profitability in a specific market.
Why Mashvisor Is the Most Efficient Way to Find Airbnb Rental Data
Given that there’s a lot of research and analysis involved in real estate investing, where should you turn to for the most accurate data and most efficient data analysis tools?
Mashvisor is an online real estate marketplace designed to make real estate investing easier by providing investors with the most up-to-date data on numerous markets all over the US. It also has several practical real estate investing tools that help investors find investment properties and perform Airbnb investment analysis. Some of its most noteworthy tools are:
Property Search. This tool makes finding investment property a breeze, no matter where you are in the country. All you need to do is type in the location you’re considering in the search bar (city, neighborhood, or zip code) and you will be given a list of available properties that are listed on the MLS. You can even streamline your search according to your needs using the different filters available on the platform.
Real Estate Heatmap. The heatmap tool, on the other hand, gives investors a better idea of the market condition on a neighborhood level. It is color-coded to indicate which neighborhoods are white-hot, ice-cold, and everything in between. You can further explore neighborhood data by clicking on the little house icon on the top left of the screen and using filters to activate this feature in your search.
Investment Property Calculator. One of the advantages of Mashvisor is that its investment property calculator does not just function as a simple calculator. It also allows users to locate the most ideal properties, analyze the data, and determine the right investment strategy.
Is Mashvisor Worth It?
Although we only highlighted a few of Mashvisor’s popular features, it has several other things that will catch your attention.
For one, its regularly updated data gives investors confidence that they will get the most accurate and realistic ROI projections. Performing a real estate market analysis or a more in-depth investment property analysis will give you market-accurate projections.
Two, Mashvisor shows investors how a traditional rental strategy stacks up against a vacation rental strategy with a side-by-side comparison. Let’s say you have a property in mind and want to find out how much it can make as a traditional or Airbnb rental. The real estate website lets you see how it will perform in the market using data based on actual traditional and Airbnb rentals. Mashvisor is a great tool to locate the right investment property that lines up with any investor’s goals.
Three, Mashvisor has very affordable subscription plans compared to others that have fewer features. Investors get more bang for their buck when they sign-up for one of the real estate website’s three tiers.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
How to Interpret Airbnb Rental Data
As an investor in real estate, you need to ensure that you have all the necessary information you need to make the wisest possible decision. This includes market-specific information, such as real estate comps.
But the thing is, data gathering—no matter how essential it is—is only one part of the equation. One important aspect of real estate investing is interpreting real estate data.
Comparing Two Markets and Reading Into Their Data
Let’s take a look at the Airbnb data from two markets and see how they stack against each other.
According to Mashvisor’s latest data, this is what the short term rental market looked like in Tampa FL in June 2022:
- Median Property Price: $607,569
- Average Price per Square Foot: $336
- Number of Airbnb Listings: 1,935
- Monthly Airbnb Rental Income: $2,771
- Airbnb Cash on Cash Return: 2.56%
- Airbnb Cap Rate: 2.62%
- Airbnb Daily Rate: $142
- Airbnb Occupancy Rate: 51%
For our other example, let’s check out what the vacation rental data is like for the Airbnb market in State College PA during the same period:
- Median Property Price: $497,473
- Average Price per Square Foot: $238
- Number of Airbnb Listings: 271
- Monthly Airbnb Rental Income: $5,505
- Airbnb Cash on Cash Return: 7.30%
- Airbnb Cap Rate: 7.45%
- Airbnb Daily Rate: $615
- Airbnb Occupancy Rate: 40%
Based on the data for these two markets, Airbnb investors will do better in State College than in Tampa. While Tampa’s performance in the short term rental market isn’t bad with a healthy monthly income of $2,771 and cash on cash return rate of 2.56%, the median property price indicates that it will take a longer time for an investor to break even and start making a profit. This is already considering that property prices have slightly gone down in Tampa since March.
On the other hand, since the median property price in State College PA is lower and thus more affordable, breaking even won’t take as long here. This is also considering that the median price has gone up in the State College market for investment properties since March. Very good cash on cash return rate of 7.30% and higher rental income helps speed up the investment payback.
The Bottom Line
Investing in short term rental properties can be a very lucrative move for investors. However, just because vacation rental data shows how profitable Airbnb rentals are doesn’t mean it’s like that in all locations. Each location has different stats depending on economic factors and real estate market conditions. This is why acquiring accurate Airbnb rental data is very important.
Having access to reliable and accurate Airbnb rental data and information makes performing due diligence a lot easier. It also makes data analysis a lot more efficient and faster. Mashvisor has helped thousands of real estate investors find the right investment properties with its relevant data and handy investment tools.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.