The COVID-19 pandemic might have slowed things down for all of us, but after almost two years in it, people have already made the necessary adjustments to navigate the situation and keep their heads above water.
Despite many companies shutting down in the past two years, business and travel are now starting to go back to normal. Travel restrictions have been eased up, and local Airbnb hosts have been slowly but steadily regaining their lost momentum.
Airbnb has become a staple on many travelers’ checklists. The platform has provided them with a more affordable alternative to the more expensive hotels and business inns when out on a trip. The pandemic all the more drove more travelers to Airbnb hosts’ doors, which made a lot of people consider getting into the vacation rental business. Plenty of would-be Airbnb hosts and real estate investors are now going online looking for the right property investment tools and asking themselves, “How much can I make on Airbnb calculator?”
Airbnb Hosting Questions
If you are thinking of starting an Airbnb business, you have a lot of things to know before setting it up. To help you, we answered the most frequently asked questions that aspiring Airbnb hosts have about this lucrative investment strategy:
What Is Airbnb?
For those living under a rock for the past decade – and those who genuinely just don’t know – Airbnb is a global company that provides travelers with cheaper accommodation alternatives by connecting them with property owners who have their houses listed as short-term vacation rentals on their site. That was a mouthful. Simply put, Airbnb is an inexpensive but pretty decent substitute to hotels and resorts when you’re on a business trip or vacation.
Is Airbnb Legal and Safe?
The short answer to both questions is yes. Airbnb is legal and safe. Generally. Let’s talk about the latter before we get into the former.
Generally, as a traveler, staying at an Airbnb rental has nearly the same safety standards as that for bigger hotels and resorts. Airbnb has high standards when it comes to applicants wishing to have their properties listed on the platform. Even before a property is listed as a vacation rental, property owners need to go through a rigorous checklist of safety requirements to ensure travelers get the best possible experience during their stay. Responsible hosting is what they call it, and they expect every host to implement their health and safety guidelines strictly. So if you’re a traveler and you’re second-guessing whether to book an Airbnb rental or not, it is safe to say (no pun intended) that each rental property listed on the platform adheres to strict health and safety guidelines.
On the other hand, property owners are subject to the following risks when registering their properties as vacation rentals: liability risks, renting out to squatters, changing short-term rental legislation, and canceled bookings.
As far as legal issues are concerned, different states and counties have different legislations and regulations on short-term rental properties. In recent years, many states and cities have doubled down on Airbnb and other vacation rentals to protect their communities from certain negative effects these types of properties may have on property values and the locals. Some of the most common challenges rental property owners may face are stricter requirements to get their business off the ground and limitations on the number of days a property can be rented out.
How Do I Become an Airbnb Host?
Given how most people almost always need an extra source of income, several business-minded individuals are considering becoming Airbnb hosts, especially when they have an extra room or two to spare on their properties. Generally, it’s easy to become an Airbnb host. In fact, almost anyone can become a host. However, Airbnb is looking for potential hosts who are willing to play by their rules and uphold certain industry standards.
According to Airbnb’s website, hosts are required to:
- Respond to inquiries
- Accept requests
- Avoid cancellations
- Maintain a high overall rating
While these requirements may seem very easy to meet, the website has a way of checking how your performance would stack up against all the hosts’ averages on the platform. On top of that, because of the global health crisis, Airbnb has to up the ante on its health and safety standards and expect all hosts to meet said standards.
How Much Can I Make on Airbnb Calculator?
The question “How much can I make on Airbnb calculator” is actually a bit misleading and a little off. You can make money off an Airbnb calculator if you develop software that allows investors and aspiring Airbnb hosts to compute their estimated rental income and then make it available online. The subscriptions and traffic the website gets can give you additional income, yes. But in this context, we’re talking about making a profit off a real estate property by converting it into a short-term rental home and having it listed on Airbnb and other similar websites.
“So what’s my place worth as an Airbnb rental,” you may ask. This question is quite similar to “How much can I make on Airbnb calculator” in the sense that the answers depend on several factors. Even if you have the best Airbnb calculator, but your property is located in a market where short-term rentals aren’t doing very well, you will be disappointed.
Smart investors will always consider the different factors and variables surrounding rental property investments, such as Airbnb data, the acquisition and overhead costs, and other things that could affect the property’s performance on the rental market.
Investors asking themselves “How much can I make on Airbnb calculator” should first determine what the market is like before arriving at an Airbnb estimate.
Airbnb Estimate Meaning
Simply put, an Airbnb estimate is a property’s earning potential that is computed by factoring in all the Airbnb dataset for a certain property. An investor can easily do this by using a short-term rental calculator found online. One of the most reliable Airbnb calculators investors and hosts use is Mashvisor’s investment property calculator. Using this particular tool, investors can come up with an Airbnb estimate for almost any property that’s publicly listed on the MLS, as well as several off-market properties. Its range covers a wide range of markets all across the US.
The site’s investment property calculator allows you to do the math on properties from multiple markets. This multimarket feature is an absolute timesaver as it permits users to perform property searches and data analytics in a fraction of the time.
Mashvisor uses reliable and relevant Airbnb data gathered from several reputable sources, including Airbnb.com. Investors no longer need to spend weeks combing through all the different listings on Airbnb and working on an Airbnb profit calculator spreadsheet. All they need to do is go to Mashvisor and start using the different tools and data that are readily available to its subscribers. Signing up for its services can help you get the answer to the question, “How much can I make on Airbnb calculator?”
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.
Mashvisor’s Airbnb Calculator
Masvhvisor’s Airbnb calculator allows investors to avoid the guessing game when it comes to the profitability of short-term rental properties. This tool uses Airbnb data and analytics to come up with a projected revenue before you buy it. As the name suggests, it calculates how much money a certain property can make.
Mashvisor uses the following factors to determine a property’s profitability:
- Airbnb occupancy rate. This determines the rate at which a property is booked or vacant. Mashvisor does not just have data for cities, but it also zooms in on all the neighborhoods in a given city. This makes property search a lot more efficient.
- Airbnb cash on cash return. Cash on cash return is one of two important factors that affect a property’s profitability. This number is calculated by taking a property’s net operating income and dividing it by the investor’s total cash investment.
- Airbnb cap rate. A property’s cap rate measures the expected rate of return on investment. This is handy because it allows investors to compare properties in a given market and gives them an idea of the potential investment risks.
- Airbnb rental income. The site gives users access to market-specific information about monthly and daily Airbnb rental rates.
- Airbnb rental expenses. Another feature the site has is its accurate projection of rental expenses associated with a given short-term rental market, including Airbnb fees.
- Airbnb cash flow. This shows whether a certain property can generate a positive or negative Airbnb cash flow.
- Airbnb rental comps. Rental comps, or rental comparables, are data used to compare similar properties in a specific market.
- Financing method. The financing method an investor chooses will have a great impact on the property’s cash flow and profitability.
How Does One Use Mashvisor’s Airbnb Calculator?
To answer the question “How much can I make on Airbnb calculator,” one only needs to turn to the right investment property calculator. And Mashvisor has one of the best out there today.
Here’s a quick step-by-step guide to using Mashvisor’s Airbnb calculator:
Step 1: Choose a Specific Investment Property Using the Property Search Tool
First things first. Before you make any calculations, you need to find a particular property to analyze. Mashvisor’s Property Search is fairly simple to use. Whether you’re looking for traditional rental property or a vacation home, the site’s investment property search tool is your friend.
All you need to do is put in the name of the city of your choice and the site will bring you to a heatmap of the city that will show the list of all available properties in every neighborhood. If you want to be more specific with your search, you can use the different search filters on the site.
Now let’s say you already own a property but want to see if it can bring in a significant amount of money as an Airbnb rental. In order to do so, just enter your address in the search bar and some basic information. The site will then come up with a list of rental comps to help make your Airbnb estimate as accurate as possible.
Step 2: Determine How You Want to Go About With the Financing
Financing is one of the most important aspects of real estate property acquisition. Without sufficient funding, looking for a property that aligns with your investment goals will be difficult. However, as an investor, you need to understand that the way you choose to finance your Airbnb project will have a significant impact on your cash flow and return on investment. Understandably, not everyone can pay in cash. Potential investors will have to consider other financing options to fund their purchase.
One good thing about Mashvisor’s Airbnb calculator is that it also comes with a Mortgage Calculator, which has the financing method set to cash by default but can easily be changed to a mortgage option.
Step 3: Come Up With an Estimate of Costs and Expenses
Another cool feature of the site’s investment calculator is it also gives investors a list of all expected rental expenses and costs. The values set in this particular section are all based on the average numbers in the neighborhood of the property. However, as helpful as these defaults may be, we highly recommend that investors perform their due diligence and find out what other possible numbers may be so they can modify the calculations accordingly. This brings more accuracy to the property analysis.
There are two categories of rental property expenses and costs. There are the one-time costs, and then there are those recurring expenses.
One-time startup costs include:
- Inspection fees
- Home improvements and repairs
- Closing costs
On the other hand, recurring expenses include, but are not limited to, the following:
- Property management fees
- Taxes (including rental income taxes)
- HOA dues
- Cleaning fees
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Step 4: Find Out the Rental Strategy Comparisons
The next step to answering the question “How much can I make on Airbnb calculator” is to find out which rental strategy you should go with. The site’s rental strategy comparison section will show you all the important numbers and indicators to see how profitable a rental property could be.
ROIs will be shown for both traditional long-term and short-term rental strategies. The calculator will display the following comparative information:
- Monthly income
- Monthly expenses
- Cash flow
- Cash on cash return
- Cap rate
- Occupancy rate
This will help you make a well-informed decision of whether to go the traditional rental route or take a chance with an Airbnb rental.
Step 5: Check the Site’s Rental Comps and Insights Section
Lastly, to get the most accurate prediction on an investment property’s profitability, see how other similar properties are performing in the same market. The Rental Comps and Insights section will show active comparable rental property listings, the most recent sales of similar properties, and other essential neighborhood information.
The Rental Comps and Insights section also shows other properties’ data like nightly rates, occupancy rates, rental income, and even ratings of similar rental properties in the area. Having access to this type of data leads investors to estimate how much they can actually earn.
The Bottom Line
With Mashvisor’s Airbnb calculator, investors can gain access to a wide range of rental properties all across the country, along with updated and accurate data for all markets. Using this tool will help investors answer “How much can I make on Airbnb calculator” and other related questions.
So how much money can you really make with an Airbnb investment? It really depends on the property location and the neighborhood data associated with it. If you know exactly what you’re looking for and you play your cards right, you may be on the verge of uncovering a potential gold mine.
To learn more about how Mashvisor can help you make faster and smarter real estate investment decisions, click here.