How much can you make from an Airbnb rental?
Investing in short-term rental properties is a great move for any real estate investor. Knowing how to make money in real estate is key. Tying these two statements together is Mashvisor’s Airbnb profit calculator. To find out your Airbnb rental income and profit, read on.
Short-term Rentals & Airbnb Rental Income
Let’s give some explanation. When we say short-term rental properties, we’re talking about any furnished investment property that’s leased out on a short-term basis. They are commonly referred to as vacation rentals because this short-term period is usually a couple of days or a week (the average vacation period). The most popular type of short-term rentals is Airbnb properties. The ease of becoming an Airbnb investor and providing a place to stay through their online platform has taken over the real estate market. Both the Airbnb host and the Airbnb guests can easily make the short-term housing deal online without any hassle.
Related: Difference Between Short-term and Long-term Rental Properties
That was a quick run-through of what an Airbnb rental property is; but why are we specifically connecting it to making money? Well, with all the buzz around Airbnb properties and the high demand for them in the real estate market, investors are going to want to know how to profit from such an investment. Before any real estate investor can calculate the profitability of a certain Airbnb investment property, they first need to calculate the Airbnb rental income.
Related: 8 Best Places to Invest in Real Estate for High Airbnb Rental Income in 2018
With technology’s effect on real estate, investors can now easily find all these complex calculations quickly through the use of an investment property calculator. Investors all around have used these calculators, but instead of using a regular rental property calculator for your Airbnb rental income, we have something better. Mashvisor provides short-term real estate investors with something called the Airbnb profit calculator. This calculator is key to finding out the profitability of an Airbnb investment property. Everything discussed in this blog applies to typical short-term rentals, but our focus is on Airbnb rentals.
Airbnb Profit Calculator
Forget wasting your time by manually entering in all the required numbers and calculations involved in an investment property analysis. Our calculator plays the role of spreadsheets and months of research. The difference is that Mashvisor’s Airbnb calculator only requires you to input the necessary costs associated with the property. To give it to you short, the Airbnb profit calculator is quick, efficient, accurate, and easy to use. You simply put in the associated costs and the calculator does all the work, thus, giving you the expected return on investment of a property. What does it calculate? Well, basically anything you’d need to help you make the decision to invest- cash flow, occupancy rate, rental income, cap rate, cash on cash return, and many more details.
Related: How to Use the Airbnb Profit Calculator to Make the Most Money as a Host
This is what all short-term real estate investors are looking for. The net cash flow expected from a property is usually more important than the property itself to investors. Cash flow is basically the cash put in the property vs. the cash generated by the property- the Airbnb property’s expenses vs. its income stream. Positive cash flow means income exceeds expenses which translates to: profit!
The potential income generated by the property through collecting the rent payments of Airbnb guests. We’ll talk more about the details of rental income in a bit.
Renting out on Airbnb could be quite profitable when you have a high 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. The more Airbnb guests hosted at different times, the higher the occupancy rate.
The capitalization rate is the potential returns on a property. You divide your annual Airbnb rental income (minus any rental property expenses) by its market value.
Cash on Cash Return
This is probably one of the most important metrics when it comes to an investment property analysis. It is the Airbnb property’s annual net cash flow divided by the net investment.
Airbnb Rental Income
So how exactly can we calculate the Airbnb rental income? Let’s first cover what actually goes into the calculation of rental income, and then talk about how much easier it is to use Mashvisor’s Airbnb profit calculator. Hint: it’s a lot easier to use our calculator.
Based on the tenancy agreement, your Airbnb rental income could include any or all of the following:
- Rent: the obvious and major component of your rental income
- Fixed service charges- utility charges
- Variable service charges- any repairs done on the Airbnb property
- Any cash received in return for damages done on the property
- Property Insurance
Note: We’ve included the cost of repairs and utilities as income because any expenses incurred on the property are tax-deductible.
Bottom Line: How we can help
Now what it’s all been leading up to: Mashvisor’s Airbnb profit calculator. Using predictive analysis to compute results, Mashvisor’s calculator compares the features of rental comps– similar Airbnb properties on the market in the same area. The comparative analysis will show you which properties have the most favorable features. The features used in the analysis could be: occupancy rate, nightly rate, rental availability, property type, and more.
So… how exactly does our calculator help? Mashvisor is all about giving you the best information when it comes to real estate investing. All successful real estate investors know the value of timely and accurate info. Using our calculator means so much more than simply finding your Airbnb rental income. We provide you with insights on what your Airbnb rental income actually means. After calculating rental income, Mashvisor will give you the optimal rental strategy for your rental property. Our interactive calculator also provides financing methods. It’ll help you choose the better financing strategy: cash or mortgage. You can change things like loan type, loan amount, interest rate, and down payment depending on your goals. Any change in these variables will change the results so you always know what to expect.
Related: Airbnb Profit Calculator: The Ultimate Real Estate Investment Tool
Our calculator helps in finding your Airbnb rental income from the very beginning to the very end. We help you choose which property to invest in, which rental strategy to follow, and how to finance that property. It’s the best and most reliable tool to have by your side! To start looking for and analyzing the best Airbnb properties in your city and neighborhood of choice, click here.