Short-term rental investing can be really profitable when utilizing Airbnb analytics. Let’s see how Mashvisor Airbnb data can help with it.
Table of Contents
- The Benefits and Challenges of Investing in an Airbnb Rental
- Why Do Investors Need to Do Airbnb Analysis?
- How Can Mashvisor Help Investors with Their Airbnb Analysis?
- Mashvisor’s Best 2022 Rental Cities for Airbnb
The Benefits and Challenges of Investing in an Airbnb Rental
Of course, if you’re still unsure what route to take as a new real estate investor, namely traditional or short-term rental investing, it’s important to be aware of all the benefits and challenges in terms of Airbnb investing.
Main Benefits of Airbnb Investing
Here are the primary benefits afforded by investing in Airbnb rentals:
1. Short-Term Investing Can Be More Lucrative Compared to Traditional Investing
When you’re doing your Airbnb analysis, you’ll probably notice that the chances of making more profit with short-term rentals are definitely bigger than with traditional ones. After all, as an Airbnb owner, you can charge a higher price per day and enjoy the benefit of having more than one tenant.
For instance, recent statistics show that in a city like Seattle, an annual tenant lease can provide the owner with about $24,000 in annual revenue. This is by no means a bad deal, but what about short-term rental?
Based on the recent Mashvisor Airbnb data, daily rental price in the same city is about $153 while the occupancy rate is 65%. That said, it’s highly likely that the owner will be able to rent out their property for approximately 270 days in a year, which would warrant $41,300 in annual revenue. That’s a considerably higher total income.
2. The Ability to Diversify Tenant Portfolio
When you’re doing traditional renting, you rely solely on one single tenant for your income. In that sense, if this tenant skips their rent or simply decides to up and leave, your finances might suffer a significant blow.
On the other hand, when you’re dealing with Airbnb short-term rentals, your income depends on many different tenants that naturally come and go. Therefore, if one tenant decides to cancel on you, the financial impact wouldn’t be as strong.
3. Better Control of Your Property
Short-term rentals like Airbnb are essentially designed to offer a selection of vacation homes. There’s nothing stopping you to use your own property as your own vacation place. Just like any other potential tenant, you can simply check the dates you wish to spend on the place.
It is not the only way to check up on your property though. With the right kind of maintenance service in place, you’ll always be notified when certain repairs and fixes have to be made. You can also make sure the service you hired properly cleans up after every tenant’s stay. What’s more, Airbnb rental prices are more flexible, meaning that they fluctuate with the change of seasons. It allows you to change the pricing accordingly.
Main Challenges of Airbnb Investing
In addition to the benefits, Airbnb investing comes with the following challenges:
1. Expenses Can Be a Bit Higher
When we compare traditional with short-term rentals, it’s clear that having one single tenant for a longer period of time will also require less effort in terms of maintenance and expenses. After all, this tenant will actually live on your property, meaning that they themselves will do a lot of property management and care. Chances are that you as an owner will only need to jump in occasionally for some emergencies and major upkeeps.
With a short-term rental, you as an owner will definitely have to step up your maintenance game if you plan to continuously attract new tenants. Not only will you have to make sure that all the furniture, amenities, and decorations are up to par with the current Airbnb demand, but you’ll also need to hire staff who will manage and maintain the property for you.
This is not all, however; in order to truly impress your Airbnb guests, it would be rather effective to provide them with some food and beverage items on your property. Also, make sure that there’s a strong Internet connection, all of which you pay for yourself.
2. Patience Is Necessary to See Progress
If you’re thinking of starting your own rental Airbnb business, keep in mind that the progress is gradual. When you first list your rental, you can’t expect to get bookings for every single day right away. The more satisfied tenants you get, the better your host ratings will become, which will consequently and gradually boost your bookings as well.
Just because your property may be the perfect vacation spot in a lovely area, it’s not enough to rely only on those things in the beginning. Therefore, it would be wise to come up with an incentive plan in order to attract more guests. Of course, don’t forget the short-term investment tax either.
3. The Issue of Unpredictable Income
As we stated before, there are some drawbacks to traditional renting when you only get income from one tenant. But if you find a responsible and reliable tenant who plans to stay in your property for a long time, it can easily turn into an amazing benefit. Namely, such an arrangement would provide you with a consistent stream of income, not to mention some peace of mind.
On the other hand, it’s true that collecting income from more tenants can be safer but it can be more unreliable at the same time. The thing is that there will undoubtedly be some empty rental days in your Airbnb calendar during the year. You might even need to set unoccupied days in between rentals in order to prepare the property for the next guest.
As mentioned, short-term rental pricing is flexible, which would allow you to potentially balance the inconsistencies in your schedule. However, you will need to rely on other factors for it, as well. After all, the occupancy rate is often affected by seasons, location, weather, etc.
Why Do Investors Need to Do Airbnb Analysis?
In order to determine whether short-term real estate investing is the right choice for you and determine the profitability of different properties, it’s crucial to perform a thorough and comprehensive Airbnb analysis.
What the analysis basically entails is the influx of available real estate data that investors can then further inspect and interpret in order to decide whether a certain investment is a good deal for them or not. What’s more, such data can significantly make the investor’s job and life easier, especially when you make the most out of available Mashvisor Airbnb information.
Considering that Airbnb Mashvisor numbers are up-to-date and accurate, the collected data makes for an amazing asset in locating the most lucrative cities and areas within the real estate market. In such a way, investors can pinpoint the best short-term rental properties with the highest ROI completely stress-free.
Aside from finding the ideal property, investors can use Mashvisor Airbnb data analytics to also determine potential drawbacks and risks that a certain investment might have. For instance, if you find a property that seems to fit all your investment criteria, you can then turn to the numbers to check just how big of a profit it would generate.
Both traditional and predictive ways of gathering useful data can be very useful for a detailed analysis of Airbnb properties. Still, by using predictions and estimations, investors can safely presume the profitability of a specific property in the long run. This is where Mashvisor Airbnb data can prove to be extremely valuable.
How Can Mashvisor Help Investors with Their Airbnb Analysis?
When you sign up for Mashvisor, you also get automatic access to Mashvisor Airbnb data.
Market-Level Airbnb Data
Investors can access the active Airbnb listings performance on average for different cities and neighborhoods.
Real Estate Market Data
Obviously, location is one of the most important factors for short-term rentals. Real estate market data will provide insight into the best cities and areas in terms of traditional and short-term rentals. Mashvisor Airbnb statistics include the updated Airbnb regulations by the city as well.
It’s further possible to filter the data with different metrics, such as monthly Airbnb income, average Airbnb occupancy rate and ROI, median listing price, etc.
Neighborhood Data Analytics
An excellent way to make the most out of Mashvisor Airbnb data is to use Mashvisor’s Heatmap tool. Aside from allowing investors to narrow down their property search by cities, the tool is also a great help for pinpointing the most lucrative neighborhoods for investing within each city.
For instance, if a certain neighborhood shows real promise in terms of short-term rentals, you can then perform predictive analysis to check whether this success will continue in the future. While you filter through the Heatmap, make sure to use your budget and other determining factors in order to pinpoint the best investment properties for your portfolio.
Property-Level Airbnb Data
Furthermore, investors can use Mashvisor’s Airbnb calculator in order to assess the potential cash flow based on their own estimated income and mortgage.
Airbnb Rental Income
Essentially, the mentioned calculator will provide the investor with a complete insight into the property’s potential income. The Airbnb estimate is extremely helpful for deciding whether to go for a certain investment deal or not.
Airbnb Return on Investment
Return on investment (ROI) is one of the most important data numbers that an investor can get. To get as accurate an estimate as possible, it’s necessary to gather other pieces of data, such as Airbnb cap rate and cash on cash return.
Manual calculations are possible but also prone to error. This is where using Mashvisor can significantly minimize the risk of making a mistake when faced with an investment decision.
Airbnb Rental Comps
It’s also possible to pinpoint more than one investment property in your search and data analysis. However, if you cannot afford to buy more than one property, it’s essential to go into the smallest details in order to properly compare the ones that match your criteria. Again, this is where you can use Mashvisor for reliable Airbnb comps and finally find the one property that’s truly above all others for your particular needs.
Airbnb Cash Flow
With the ability to access Mashvisor Airbnb data for every US city through the Mashvisor platform, there’s absolutely no need to bother yourself with calculating Airbnb cash flow manually. You can simply click on the property that interests you and gain immediate insight into valuable metrics, such as cash flow, as well as the occupancy rate, reviews, investment payback balance, Airbnb fees, other costs, and so on.
Mashvisor’s Best 2022 Rental Cities for Airbnb
Based on Airbnb cash on cash return rates and Mashvisor Airbnb data, we’ve come up with a list of the top 20 US cities that show the best potential when it comes to short-term rental investing.
- Monroeville, PA: 9.97%
- Destrehan, LA: 9.62%
- New Berlin, WI: 9.62%
- Petersburg, IL: 9.60%
- Princeton, IL: 9.58%
- Freeport, IL: 9.57%
- Thomson, GA: 9.52%
- Prairieville, LA: 9.44%
- Alton, IL: 9.37%
- Corydon, IN: 9.28%
- Peninsula, OH: 9.27%
- Belding, MI: 9.23%
- Kingston, NH: 9.14%
- South Saint Paul, MN: 9.09%
- Mascotte, FL: 9.07%
- Calera, AL: 9.03%
- Winneconne, WI: 9.02%
- Winter Springs, FL: 9.01%
- New Castle, PA: 8.99%
- Inkster, MI: 8.96%
Related: What Is a Good Cash on Cash Return?
In case you’re considering delving into the world of short-term rental investing, it’s essential to carefully go through all the benefits and challenges. As mentioned, you can definitely realize a substantial financial benefit in terms of profit. However, it also comes with its share of expenses and effort.
Of course, if you’re 100% certain that short-term investing is the right deal for you, you still need to make sure that you choose the ideal investment property for your portfolio. In order to do so, thorough and comprehensive analytics, backed up by Mashvisor Airbnb data, should prove to be indispensable, especially when minimizing risks and calculation errors. What’s more, relying on the Mashvisor platform will also save you a significant amount of time.
If your goal is to be the most successful real estate investor you can be, don’t hesitate to use everything that Mashvisor has to offer. Sign up for a 7-day free trial of Mashvisor today.