There are numerous investment opportunities in real estate. Among them, Airbnb real estate investing has become one of the more popular options. In just a few years, short-term rentals have emerged as a top real estate investment option and many are buying Airbnb property. This is primarily because they typically provide a higher return on investment than long-term rentals.
Nevertheless, that doesn’t mean that simply buying any Airbnb rental property is going to make you money. To be a successful Airbnb investor, you should find a profitable Airbnb rental property in a top location. No matter how good you are in customer service and property management, it’s hard to make a substantial amount of money if you don’t have a profitable investment property. Therefore, learning how to find the best rental properties is an important part of how to buy rental property that every investor should master.
If you are thinking of buying Airbnb property in 2020, you need to follow the right steps and use the right tools in your property search in order to get a good investment property. Most people have been using Excel spreadsheets to analyze Airbnb properties for sale. However, this method can be inaccurate and time-consuming. Thankfully, we now have modern real estate investment tools that can make your search and real estate investment analysis not only faster but also more accurate.
In this blog, we take you through 3 important tools that Airbnb investors need when buying Airbnb investment property in 2020.
Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
1. The Heatmap Analysis Tool
Location plays a key role in successful real estate investing, especially when it comes to Airbnb investment properties. As an Airbnb investor, the return on investment of your investment property will be greatly influenced by the Airbnb occupancy rate.
In other words, the more guests you get and the fewer times you experience vacancies, the more money you will make. Therefore, when buying Airbnb property, you need to find a real estate market with a high influx of visitors. This can be tourists, business travelers, or both. For instance, popular tourist destinations like national parks and beaches usually enjoy a high number of visitors and can make for top markets for Airbnb investments.
The best tool to use to find the most profitable neighborhoods in your city is Mashvisor’s heatmap analysis tool. This unique and user-friendly tool uses different colors to provide users with a visual illustration of different ranges of Airbnb rental data. The different colors show different values for neighborhood metrics. They range from green (highest values) to red (lowest values). Mid-value neighborhoods are marked in yellow and orange. This color code system makes it easier for users to locate the best-performing neighborhoods in the real estate market when buying Airbnb property.
Mashvisor’s heatmap allows you to filter your search by Airbnb occupancy rate. That way, you can easily identify areas where tourists visit and stay in Airbnbs. Because the Airbnb occupancy rate is not the only metric to look at when searching for profitable neighborhoods for buying Airbnb property, Mashvisor’s heatmap helps you find a location using filters include listing price, Airbnb rental income, and Airbnb cash on cash return.
Related: 20 Most Profitable Airbnb Locations in 2020: Cash on Cash Return
2. The Property Finder
Once you have found a profitable location, the next step in buying Airbnb property is to begin your investment property search. There are several ways you can find Airbnb properties for sale, including newspapers, your contacts, or through real estate agents. However, the most efficient way is to use Mashvisor’s property finder.
This online property search tool enables real estate investors to find top performing Airbnb properties for sale in their market of choice that match their criteria and preferences. This can be done in a matter of minutes. No need to spend hours or days searching through the whole housing market.
You simply key in some basic filters and the tool will provide you with a list of high return Airbnb properties for sale that match your budget and other search criteria. These filters include:
- Location (Search in multiple cities in the US housing market simultaneously)
- Rental strategy (Airbnb in this case)
- Property type
- Number of bedrooms and bathrooms
With these filters, you will be able to narrow down your Airbnb property search in your location of choice. You will be left with a few top-performing Airbnb investment properties that you can then conduct a comprehensive Airbnb investment analysis on.
Related: Rental Property Finder: A Revolutionary Tool for Investing in Real Estate
3. The Airbnb Profit Calculator
When buying investment property, you want to find the most profitable one you can get. This means that you will need to estimate Airbnb income and other ROI metrics for your target properties and do a comparison.
However, manual analysis can be quite toilsome when you are dealing with multiple Airbnb properties for sale. This is where Mashvisor’s Airbnb profit calculator comes in handy. It is essentially the most important tool when buying Airbnb property.
The Airbnb profit calculator allows you to do a detailed analysis of the top-performing Airbnb investment properties for sale that match your criteria. It will provide you with projections for key profitability metrics. They include Airbnb rental income, rental property expenses, cash flow, cap rate, cash on cash return, and Airbnb occupancy rate. To use this calculator, you simply need to enter some basic data such as financing method and mortgage details.
The Airbnb profit calculator also allows you to do a quick comparative market analysis for each listing. This typically involves finding recently sold Airbnb investment properties located in the same area that are comparable to the one you are interested in (real estate comps). However, Mashvisor provides a list of comps for every property for sale on the platform. This will help you determine the fair market value of the Airbnb rental property so that you don’t overpay for it.
Related: How to Use an Airbnb Property Profit Calculator
The Bottom Line
The key to a successful Airbnb business is finding the right properties. If you are looking to get into Airbnb real estate investing in 2020, Mashvisor is the go-to real estate investment software for Airbnb analytics. Be sure to use our Airbnb tools to find profitable markets and rental properties. This is the surest way to ensure that you are buying Airbnb property that will help you achieve your specific investment goals.
To learn more about how Mashvisor can help you and how to use the platform, schedule a demo!