Over the last decade, Airbnb real estate investing has grown and become a popular investment strategy for real estate investors. Ever since it was founded, Airbnb has had a huge impact on the hospitality industry. Many guests actually prefer Airbnb rentals to hotels, making them a lucrative investment option. While many have made a substantial amount of money from Airbnb real estate, it’s never a guarantee. Many fail in the business too.
So, how do you ensure that you get a good return on your investment when investing in Airbnb? Well, it boils down to finding a profitable investment property through proper analysis. Finding the best Airbnb real estate for sale is not complicated if you know what you are doing. By following the right steps and using the right tools, anyone can be successful.
If you have been wondering how to find Airbnb real estate, here is our simple guide to help you get started.
1. Find a Top Real Estate Market for Airbnb Investment
You want to look for a real estate market that enjoys a high influx of visitors (tourists or business travelers). The more guests you have, the lower your vacancy rate will be. Also, with high demand for Airbnb rentals, you will be able to charge higher nightly rates. Both of these will contribute to a higher monthly rental income and rate of return. But how do you identify top locations for Airbnb investment?
To select a good location where you will enjoy high demand for your Airbnb rental property, you should research the market at both the city and neighborhood levels.
Finding the Best City for Airbnb Investment
If you want to succeed with Airbnb real estate investing, you should consider cities with popular tourist attractions like beaches, parks, mountains, etc. Additionally, you should choose a market with a relatively low supply of hotels and other Airbnb listings. Such cities will have a higher demand for Airbnb rental properties.
No matter the level of demand, you don’t want to operate an Airbnb investment property illegally. Consequently, you should review the short-term rental regulations before you decide to invest in that city. Some cities have strict Airbnb regulations that can adversely affect your return potential or render some Airbnb investments illegal.
Finding the Best Neighborhood for Airbnb Investment
After identifying a good city for Airbnb investment, you need to narrow down your market analysis to the neighborhood level. You can find the most profitable neighborhoods in your city of choice by doing a quick neighborhood analysis using Mashvisor’s real estate heatmap. This revolutionary tool uses visual cues to help investors locate the best-performing neighborhoods for the Airbnb rental strategy.
The tool allows you to filter your analysis using the following key metrics:
- Listing price
- Airbnb rental income
- Airbnb cash on cash return
- Airbnb occupancy rate
2. Use the Property Finder for Your Airbnb Property Search
Once you have identified a profitable area to invest in Airbnb, you can now begin searching for Airbnb properties for sale. There are several sources including listing websites, your network, newspapers, your real estate agent, etc. However, not all sources allow for an efficient search. The easiest and most efficient way to do your property search is to use Mashvisor’s Property Finder tool.
The Property Finder allows you to find profitable Airbnb for sale in any housing market in the U.S. based on your criteria and preferences. By simply entering some basic filters, you will get a list of top-performing Airbnb real estate for sale that match your search criteria.
The tool supports the following filters:
- Location (Search in an unlimited number of cites at the same time with an Expert Plan)
- Rental strategy
- Property type
- Number of bedrooms
- Number of bathrooms
3. Conduct a Thorough Analysis
The Property Finder helps you to narrow down your search to only a few properties that fit your budget and match your criteria. However, to find the best Airbnb rental property among them, you need to conduct an in-depth Airbnb investment analysis.
First, you need to perform a comparative market analysis (CMA) to establish the fair market value of your target Airbnb rental. This involves looking at the selling prices of some comparable properties that are in close proximity to the one you’re interested in and which were sold recently. After that, account for the differences between those Airbnb properties and the one you are interested in. Knowing the fair market value of an Airbnb property for sale will ensure that you don’t overpay for it.
Next, you want to analyze the Airbnb properties themselves. This involves calculating key Airbnb investment metrics. As you know, real estate investing is all about numbers. The numbers have to make financial sense before you consider buying a vacation rental. You want to find Airbnb real estate that will yield positive cash flow and a good Airbnb return on investment in terms of cash on cash return and cap rate.
However, using spreadsheets for analysis is time-consuming and can sometimes be inaccurate. The best way to estimate Airbnb income and other profitability metrics is to use Mashvisor’s Airbnb calculator. Our calculator provides pre-calculated Airbnb data such as Airbnb rental income, Airbnb cash flow, Airbnb cap rate, Airbnb cash on cash return, and Airbnb occupancy rate.
The Bottom Line
The key to successful Airbnb real estate investing is finding a profitable investment property in a top location. To achieve that, you need to follow the right steps and use the right real estate investment tools in your Airbnb real estate search.
Fortunately, Mashvisor makes the process easier and more efficient. With this real estate investment software, you can easily access Airbnb data and Airbnb analytics that will help you make smart investment decisions.
To find and analyze the best Airbnb investment properties in your city and neighborhood of choice, click here to sign up for a 7-day free trial with Mashvisor.
What’s next? Once you find a profitable Airbnb rental, you’ll want to learn how to become an Airbnb host. We’ve already put together a great guide to help you out. Check it out here: How to Become an Airbnb Host in 2020.