Putting Numbers to Words
We know that Math is not a top favorite subject amongst many real estate investors. However, the numbers are indeed a property investor’s best friend. When you’re figuring out the secret to making money in real estate, you’ll find the numbers are more than just digits.
Depending on which of the many real estate investing strategies you decide to pursue, you can approach profit making in a number of ways. Here, we focus on the short-term rental property approach. Specifically, Airbnb rentals.
We previously wrote a blog on the top U.S. real estate markets that are known to be the most profitable Airbnb cities. Now, we took those cities and gave you a glimpse of those Mashvisor numbers we always gloat about.
These numbers include the projected Airbnb rental income, Airbnb cash on cash return, Airbnb capitalization rate (cap rate) and the median home price in the city.
Don’t be quick to think that is all we offer. The Mashvisor package comes with far more than meets the eye. For example, we have a special Airbnb profit calculator that is ideal for a rental property investor like yourself.
You need to know how much profit is being made by your income producing asset. No use in investing in the most profitable Airbnb cities if you aren’t getting the goal numbers from your property investment, right?
No more small talk, it’s time to talk business. Real estate business.
Mashvisor Dictionary- Quick Metric Definitions
We don’t just want to throw a bunch of numbers in your face without letting you know what they mean. A number is just a weird looking shape if there is no meaningful value to it. Here is a quick explanation of the real estate analytics we’re going to mention. We promise not to bore you.
Airbnb Rental Income
This is simply the amount of rent you collect from your tenants. In this case, your rental income would be the amount you collect from your Airbnb guests per stay at the rate you set. Later, we will show you the projected monthly Airbnb rental income of the most profitable Airbnb cities.
Airbnb Cash on Cash Return
Concisely, this is the return on an investment you receive. In Airbnb words, it is the calculation of Airbnb cash income earned on the cash you invested into the Airbnb property.
Related: Real Estate Investing 101: How to Calculate Cash on Cash Return
Airbnb Cap Rate
The Airbnb capitalization rate is the rate of return on an Airbnb property investment based on the income the property is expected to generate. You’re getting to know the potential of your investment property.
Note: You will notice both the Airbnb CoC and Airbnb Cap rate values are the same for each of the most profitable Airbnb cities. This is because we are assuming you paid for the rental property in full cash.
Median Home Price
This is the average home price of all types of properties in the area. You got multi-family homes, single-family homes, apartment buildings, the list can go on. We provided you the average with consideration of all rental property types.
Previously on Mashvisor
Now that we have that out of the way, let’s get to the good stuff. Now, we mentioned that we recently found 2018’s most profitable Airbnb cities.
We gave nice little descriptions and reasons why they are considered the top dogs of the most profitable Airbnb cities. What we didn’t give you were our special numbers. For now, here are our top 5 most profitable Airbnb cities:
Related: Real Estate Money Making: The Most Profitable Airbnb Cities in 2018
Palm Springs, CA
Virginia Beach, VA
To get an analysis of neighborhoods in these most profitable Airbnb cities, or anywhere else, click here!
Mashvisor Numbers of the Most Profitable Airbnb Cities in 2018
And finally, what you’ve all been waiting for: the Mashvisor numbers! Investment analysis software is a marvelous real estate investment tool. To think you can perform a property valuation at the click of a button + a $24.99 a month subscription is pretty admirable, don’t you think?
Small price to pay when you find your million dollar baby investment property by using Mashvisor’s product if you ask us. Anyway, here is a sneak peak of what the real estate analytics look like for the most profitable Airbnb cities in 2018:
Let’s Talk About those Cash on Cash Rates Real Quick
Now we know what you may be thinking. “Mashvisor, don’t real estate experts agree that a good cash on cash return in real estate is between 8-12%?” Well yes, real estate investors, we know that a CoC return rate of 8-12% is what we aim for. However, we call this the “text-book” friendly rate.
In a world of “unicorns and butterflies,” the economy would be skyrocketing, U.S. housing market values on a high, and money would just be flying everywhere. We are sure you know this, but we don’t live in a “unicorns and butterflies world.”
The economy has flaws, the rates are always changing, and new expenses and laws are being added here and there. These factors all contribute to how real estate investing is going at the moment.
So although we would love to have all the investment properties at such a high cash on cash return rate, at this moment of time, it is a bit unrealistic. We can come close, but we won’t always fall within that range in the real estate business.
Related: Forget Everything You’ve Heard About What is a Good Cap Rate
So don’t you dare be discouraged or pass up a good property investment opportunity just because it’s not up there in CoC rate. We do want you to be aware, but we don’t want you to consider the CoC to be a deal breaker on its own.
Look at the investment property as a whole, the numbers as a whole, and go with your gut. Potential is very much alive in investment properties, so don’t be afraid to put a little extra sweat and tears to get that cash flow going. Take the diligent risks.
Are You Still Here? Go Over to The Most Profitable Airbnb Cities!
The clock is ticking! Time waits for no man, and opportunities are being introduced to real estate investors like you as we speak. We know there are so many different investment properties located in the most profitable Airbnb cities just waiting for you.
Although we gave you some of those important real estate investment analytics, there is even more to explore. This is just the first step to making your decision on whether or not to invest in 2018’s most profitable Airbnb cities. We know you are hungry for the most profitable investments out there, so go get ’em, tiger! Your feast is awaiting.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.