Real Estate AnalysisHow to Conduct a Thorough Airbnb Investment Analysis by Alex Karani April 20, 2019April 20, 2019 by Alex Karani April 20, 2019April 20, 2019Airbnb real estate investing has become quite popular in recent years as more people realize its potential for making money in real estate. Generally, Airbnb real estate investing is delivering great returns all over the world. However, not all properties are worth listing on Airbnb. When it comes to investing in short-term rentals, finding one that will help you achieve your goals is key. So, how do you find a profitable Airbnb investment property?Acquiring an Airbnb investment property requires the same amount of meticulous research as required when buying any other kind of investment property. With the many options available in the market, you need to find the best ones. Successful Airbnb investors usually conduct thorough Airbnb investment analysis to find lucrative vacation rentals. In the past, investment property analysis used to be a long and hectic process. However, you can now do Airbnb investment analysis using online tools in a matter of minutes. These tools help real estate investors to find lucrative investments and minimize risk. With Airbnb rental data, you will be able to make better investment decisions.Let us go through the steps you will need to take to conduct a thorough Airbnb investment analysis.Related: Four Things to Consider Before Purchasing an Airbnb Investment Property1. Find a Good City to Invest In The first step when conducting Airbnb investment analysis is to find a good city to invest in. Location is key in real estate investing. It is even more crucial when it comes to investing in Airbnb. You need to find the best city for your Airbnb investment property. A good city for investing in Airbnb property is one that has a strong economy with tourism as a leading industry. This is because vacation rentals significantly rely on tourism to be successful. The city you invest in should also have good public transportation, shopping centers, and other essential amenities. Your goal is to invest in a city with easy and quick access to the main tourist attractions and different points within the city.It is also important to consider seasonality trends and average Airbnb occupancy rates of the cities. If tourists only visit during certain seasons, will you be able to afford vacancies during off-peak seasons? You can use Airbnb analytics to guide you towards a city with high Airbnb return on investment.Related: What Is the Best Airbnb Analytics Platform for 2019?2. Study the Airbnb Regulations of the City When conducting an Airbnb investment analysis, you also need to examine short-term rental regulations. Regulations governing Airbnb rentals usually vary from one state/city to another. Specific standards may be applicable to the location of the Airbnb investment property or the property itself. There are also some policies that may concern the Airbnb guests. Check the city’s laws regarding short-term rentals and assess how they are going to affect you. This is will help you to avoid getting into trouble with the law.Some cities have stringent regulations restricting the use of Airbnb. Some have even totally banned Airbnb rentals. You ought to avoid such cities. For instance, Los Angeles and New York are some of the cities with rigid regulations against Airbnb use. Therefore, before you start looking for the best Airbnb investment opportunities approach your local city council and find out about the current Airbnb regulations. To operate efficiently in the business, go for cities with the most flexible regulations governing Airbnb rentals.Related: What You Need to Know Before Buying an Airbnb Investment Property3. Find a Good NeighborhoodThe investment potential of neighborhoods within the same city usually differs. To choose a suitable neighborhood, it is important for you to know your target audiences and what they desire. Airbnb guests are mostly tourists. They are looking to stay near popular and attractive places like city centers, game parks, beaches, or universities. Through Airbnb market analysis, you can find neighborhoods with the best Airbnb investment opportunities. With Mashvisor’s Heatmap Analysis Tool, you can select the best neighborhoods using filters like listing price, Airbnb cash on cash return, Airbnb rental income, and Airbnb occupancy rate.Mashvisor’s Heatmap4. Find the Best Airbnb Investment PropertyAfter finding a profitable market and neighborhood with favorable Airbnb regulations, the next step in Airbnb investment analysis will be to find the best Airbnb investment property. While a real estate market may generally seem ideal for Airbnb real estate investing, ensure that the actual real estate property will be lucrative. The investment property should have a good potential Airbnb return on investment.Mashvisor’s Airbnb Property Finder is a tool that you can use during Airbnb investment analysis to narrow down your options. The tool allows you to find income properties based on your search criteria and preferences. If you already have a certain city in mind, you can use the Property Finder to locate Airbnb properties that are performing well in the area based on cash on cash return. From the list of top properties it will give you, you can then choose one to analyze.After narrowing down your options with the Property Finder, you can use an Airbnb Profit Calculator to analyze the rate of return of specific Airbnb properties. This calculator is essentially an investment property calculator but it includes data on short-term rentals. It will show you the cash flow, Airbnb cap rate, cash on cash return, Airbnb rental income, and Airbnb occupancy rate for a particular Airbnb investment property. You will use these metrics to compare and select the best Airbnb property. Find a Profitable Airbnb Investment PropertyThe Bottom LineTo spot the best Airbnb investments in the market, you will need to conduct a thorough Airbnb investment analysis. When conducting Airbnb investment analysis, you need to find the best city, neighborhood, and Airbnb property. Mashvisor has a number of tools that you can use to achieve this. Mashvisor’s Heatmap Analysis Tool, Property Finder, and Airbnb Profit Calculator are the main tools you will need for Airbnb strategy analysis. They can help you to analyze Airbnb investment properties in a matter of seconds. Also remember to study Airbnb regulations of the cities before investing!To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here. Start Your Investment Property Search! START FREE TRIAL AirbnbAirbnb RegulationsHeatmapInvestment CalculatorLocationProperty Finder 0FacebookTwitterGoogle +PinterestLinkedin Alex KaraniAlex is an entrepreneur and an experienced content writer focused on personal finance, business, and investing. For over six years, he has contributed to a number of publications, both online and print. When he's not writing or working, Alex enjoys reading, traveling, and the outdoors. Previous Post The Beginner’s Guide to Getting Started in Real Estate Investing Next Post What Is a Good Return on Investment for Real Estate? Related Posts Rental Property Calculator: What Are the Main Components? 10 Fundamental Principles of Real Estate Investing to Build Wealth What Return on Investment Property Should You Expect in the US Real Estate Market? Real Estate Return on Investment: What to Expect Can a Home Appraisal Calculator Replace a Professional Home Appraisal? How to Conduct Multifamily Market Research Before Buying a Rental Property What Makes for an Effective Comparative Market Analysis? 5 Ways to Find a Buyer’s Market The 6 Real Estate Research Steps Investors Should Follow How to Find Rental Comps to Price Your Property Learn How to Calculate Rental Property Cash Flow How Is Cap Rate Used for Evaluating a Real Estate Investment?