What is the best short term rental calculator, and what can it do for investors? For answers to these and other important questions, keep reading.
Table of Contents
- What Is a Short Term Rental Calculator?
- Why Do You Need a Vacation Rental Calculator?
- What Makes Mashvisor the Best Short Term Rental Calculator?
- What Data Can You Get from the Mashvisor Airbnb Calculator?
- What Will Even the Best Short Term Rental Property Calculator Not Tell You?
Do you want to invest in real estate in 2023? Are you wondering whether vacation rentals will be the most profitable real estate strategy next year? Do you want to find tools that will help you make informed, data-based investment decisions?
If the answer is “Yes,” you’ve come to the right place. Owning a vacation rental business is now considered one of the best ways to make money in real estate. And the most efficient and secure way to determine whether a short term rental for sale will bring good ROI is by using a vacation rental calculator.
However, the short term rental industry has become so competitive that using just any online calculator will not do the trick. You need to find and use the best Airbnb calculator in order to boost daily rates, occupancy rates, rental income, and – ultimately – return on investment.
In this article, we’ll review the Mashvisor platform and show why it hosts the top short term rental calculator in the entire US market. We’ll show what it can do for Airbnb investors and why it’s a must-have.
Ready to gain a deeper insight into this crucial tool, why you need it, and how to get access to it?
Let’s get started!
What Is a Short Term Rental Calculator?
A short term rental calculator is an online tool developed to help real estate investors – especially beginners – find the best Airbnb investment opportunities. This app is a type of rental property calculator that focuses on searching for and analyzing vacation rental properties.
The tool is frequently referred to as a vacation rental calculator, Airbnb calculator, Airbnb investment calculator, and Airbnb profit calculator.
Short term rental property investors can use this tool to search for profitable Airbnb locations and money-making vacation homes for sale. Additionally, they can use it to analyze the investment potential of both markets and properties they’ve selected more efficiently and more accurately than ever before.
In other words, the calculator conducts both real estate market analysis and investment property analysis. The best thing about it is that it allows investors to analyze thousands of MLS listings and off market properties with a few clicks of a button. You can even manually input properties of your choice and check the cash flow and ROI potential of each investment.
Relying on AI and machine-learning algorithms, the short term rental property calculator can achieve accuracy and speed that even the most experienced investors can’t. It eliminates the need to collect, organize, and clean real estate data manually, which can take weeks or months.
Moreover, the old method of doing manual calculations on Excel spreadsheets is prone to human error, whose effect can easily spread and multiply in further calculations. Meanwhile, deploying a real estate investing app removes the risk of human mistakes and guarantees a high level of accuracy.
Not to mention that it bases its calculations on more data than any human could possibly comprehend. That’s what we call big data.
From Where Does the Tool Get Data for Its Calculations?
Before being able to confine one’s vacation rental investment decisions with any tool, an investor needs to know the data source for this tool. After all, a rental property calculator is only as good as the data it uses in its calculations.
The best short term rental calculator should get real estate data from the MLS and vacation rental data from Airbnb. While the MLS is the biggest property marketplace in the US housing market and the biggest source of data on properties for sale, Airbnb is the largest vacation rental platform.
And that’s exactly where the Mashvisor vacation rental calculator gets its data from.
Mashvisor pulls data on real estate listings and Airbnb listings in all US cities, towns, and villages – no matter how big or small, providing nationwide coverage. Then, it applies its unique algorithms to this big data to analyze the performance of entire markets, as well as individual properties.
This process allows the Mashvisor vacation rental property calculator to forecast the daily rate, occupancy rate, rental expenses, cash flow, and ROI of a property. The individual investment property analysis is based on the performance of similar short term rental listings within the area, known as rental comps.
All in all, with this revolutionary tool, you don’t need to spend weeks on end compiling data and trying to analyze copious amounts of information on Excel spreadsheets. You can find all the key Airbnb data points and analytics you need within minutes using the short term rental calculator.
Related: The Best Way to Gain Access to Short Term Rental Data
Why Do You Need a Vacation Rental Calculator?
Now that we’ve looked at what a short term rental calculator is, let’s talk about the reasons why you need one in your Airbnb investment decisions.
In this section, we will focus on the pros of using a vacation rental property calculator instead of doing manual calculations in Excel:
- Analyze the potential of entire markets and individual properties: The best short term rental calculator allows investors to perform both Airbnb rental market research and rental property analysis. It doesn’t limit itself to just one or the other.
- Calculate return on investment on more listings than ever before: With the help of this calculator, you don’t need more than a few minutes to read the readily available analysis on each property. It means that you can analyze multiple properties for sale in no time.
- Rely on solid vacation rental data: The top vacation rental calculator is able to access, gather, and analyze data that regular investors don’t have access to. It uses data from platforms such as the MLS and the Airbnb website. All data and analyses are checked against the performance of actual rentals in the area.
- Make faster and smarter investment decisions: All in all, using this tool helps investors boost their short term rental investments. They need only a fraction of the time to be able to move forward with the purchase of an investment property that they need when doing calculations the traditional way.
Considering what the best Airbnb rental property calculator should be able to do for investors, let’s examine why Mashvisor is precisely this.
What Makes Mashvisor the Best Short Term Rental Calculator?
We’ve already stated that Mashvisor constitutes the top vacation rental calculator in the US market. And we’ve promised to show you why.
Let’s break down the aspects of Airbnb real estate investing that our tool helps with:
Finding the Best Location for Short Term Rentals
Any savvy real estate investor will tell you that location is one of the core factors that determine your investment property’s cash flow and profitability. That’s why carrying out Airbnb market research and analysis is essential before deciding where to buy a vacation rental property.
However, analyzing a market manually is nearly impossible. Not to mention analyzing several markets to select the best one for your specific investor needs and requirements. It can take months to compile and analyze the necessary amount of data.
Don’t forget that the real estate market is dynamic, meaning various aspects might’ve changed by the time you’re done with your initial calculations.
Related: US Housing Market Predictions: What’s to Come in 2023
This is why you need the vacation rental investment calculator. It will save you time and money by showing you the best neighborhoods to buy property for starting a short term rental business in any market in the US.
As an investor, if you want to target the right property for your investment, you need to start at the very top. A short term rental investment calculator will come in handy for this purpose.
Use the Mashvisor real estate heatmap to identify the areas with the lowest property prices and the highest Airbnb rental income, occupancy rate, and cash on cash return in any US city.
Next, deepen your area-specific research with the Mashvisor neighborhood analysis pages. There, you can access detailed Airbnb data analytics on all neighborhoods nationwide. Some of the available data points include average home values, Airbnb occupancy rate, short term rental cash on cash return, the ideal rental property type, and overall investability score.
Carrying Out Comparative Market Analysis
When buying an Airbnb property, real estate market analysis isn’t just about finding an optimal neighborhood to invest in. You want to know whether you’re paying the right price since the purchase price is one of the factors used to calculate the rate of return, with the other being rental income.
Performing comparative market analysis can be grueling for an inexperienced real estate investor and is expected to take many months to complete.
You need to identify recent sales of properties that are as similar to the one you’re considering buying as possible. Moreover, they need to be located within the same area. Their sale prices will form the range of reasonable asking prices for your investment property.
Then, you must find a few expired listings from the same time period to confirm what price level is unreasonably high for the local market.
Alternatively, using the Mashvisor Airbnb profit calculator, you can get everything done in a matter of minutes. The tool will list recent real estate comps in your neighborhood of choice, including all relevant data and information. You can use them as a benchmark to make sure that you don’t pay for your short term rental property more than the fair market value.
After all, the lower the purchase price, the higher the ROI on your vacation rental. Both the Airbnb cap rate and Airbnb cash on cash return – the two main metrics of profit in the industry – rely on the property price in their formulas.
Related: What Is a Good Cash on Cash Return?
Locating the Right Short Term Rental Property
Once you’ve identified the most suitable location and neighborhood, it’s now time to find the best property for the vacation rental investment strategy. In this digital age, you don’t need to drive through neighborhoods looking for “For Sale” signs – known as driving for dollars – or flip through newspaper pages looking for property ads.
The Airbnb profit calculator has automated the investment property search process. The tool will show you a list of short term rental properties for sale that match your exact search criteria. Your search criteria can include any or all of the following metrics:
- Location (city and neighborhood or zip code)
- Property price
- Financing method (cash or mortgage)
- Property type (condominium, single family home, townhouse, or multifamily home)
- Rental income
- Cash on cash return
- Cap rate
Once you’ve set up all the criteria to reflect your investor needs and expectations, you will get a complete list of all matching short term rentals for sale available in the area. You can sort them by property price, property size, Airbnb income, cash on cash return, or cap rate.
In this way, you can focus your rental property search on the most profitable opportunities, without wasting time on suboptimally performing properties.
Notably, the short term rental property calculator will include both MLS listings and off market properties in the search results. Both property types have pros and cons, and you can decide which matches your requirements.
Related: How to Get Access to the MLS Database Without a License
Conducting Investment Property Analysis
As described above, all the metrics used by the Mashvisor vacation rental calculator are pulled from the most reliable short term rental data platform to ensure accurate results. They’re based on reliable rental comps and Airbnb data, so you can be confident in the forecasts.
The tool helps you access a comprehensive report that includes all the important numbers and indicators you’ll need to know how a property will perform before buying it. It is known as short term rental property analysis.
The Mashvisor Airbnb calculator provides the following numbers:
- Property price
- One-time startup costs (inspections, repairs, furniture, appliances, and closing costs)
- Rental income
- Monthly rental expenses (insurance, utilities, property management, maintenance, property tax, HOA fees, rental income tax, and cleaning fees)
- Airbnb occupancy rate
- Cash flow
- Cash on cash return
- Cap rate
Sometimes, as an investor, you might believe that the property you plan to buy might perform differently from comparable vacation rental listings. It can be based on your own experience as an Airbnb host or something that’s happened to another investor in the same neighborhood. Or, you might have a different plan on how to manage and advertise your rental.
Luckily, with the best vacation rental calculator on the market, you can change any value you see that could be different based on your analysis. The short term rental income calculator will immediately recalculate and adjust all the related numbers.
The calculator’s interactivity and flexibility make Mashvisor the top real estate investment tool for Airbnb investors in any US city.
Using the newly generated data, you can then compare various investment properties for sale and decide which one will be the most profitable in your situation.
Performing Financial Analysis
How you pay for your income property is one of the main factors that determine both affordability and profitability in real estate investing. That’s why the best Airbnb rental property calculator should consider the financing method and allow investors to factor it into their analysis.
The Mashvisor calculator comes with such a functionality, serving as a mortgage calculator. You can choose whether you will pay in cash or with a mortgage loan, and your selection will be reflected in the investment property analysis.
Related: Investment Mortgage Calculator: How to Calculate Your Monthly Mortgage Payment as an Investor
And that’s not all. You can set up multiple filters to choose the best loan type for your short term rental property. The criteria include:
- Property price
- Down payment (as a dollar amount or percentage of the property price)
- Mortgage type (fixed rate mortgage, interest only mortgage, or adjustable mortgage)
- Loan term
- Interest rate
As soon as you’ve set up all the above values, the best short term rental calculator will perform the financial analysis for you and let you know if your financing plan makes sense.
What Data Can You Get from the Mashvisor Airbnb Calculator?
The Mashvisor short term rental calculator provides real estate investors with a wide range of Airbnb data and analytics. Let’s look at the most crucial numbers and figures that the tool generates for you:
Airbnb Property Price
First, our vacation rental calculator will show you how much the potential investment properties are listed for on the MLS. In addition, you also get access to the Redfin estimate of the fair market value for this specific property.
While the said figures aren’t the final selling price, they give you a good idea of how much you can expect to spend on the property. How much you end up paying for your vacation rental is key, as the price is present in all formulas for profit in real estate.
Real estate prices and terms can always be negotiated to a more favorable level for all parties. If you want to get the best at the negotiating table, make sure to work with a top-performing real estate agent in the local housing market.
When buying a vacation rental home, hiring an agent makes perfect sense – especially for beginners. Remember that in the US market, the seller and not the buyer pays the agent fees, so you have nothing to lose. Meanwhile, you have a lot to gain from the agent’s expertise, experience, and negotiating skills.
Combining the power of the best Airbnb rental calculator with the knowledge of a top agent can be your winning ticket in short term rental property investments.
Airbnb Rental Income
Airbnb income is a crucial metric for short term real estate investors looking to create a sustainable business. The Mashvisor vacation rental income calculator provides an estimate of the revenue you can expect to make from any property listed on the platform or any off market property you search for.
The Airbnb rental income figure is based on other crucial figures, such as Airbnb occupancy rate and Airbnb daily rate. To calculate the expected Airbnb revenue of your property, the best calculator uses the Airbnb demand and nightly rates that comparable vacation rental listings are able to generate. They are known as Airbnb rental comps.
However, as a smart Airbnb investor, you should not adopt a single daily rate and stick to it throughout the week and throughout the year. One of the best things about the Airbnb investment strategy is that you can adopt a dynamic pricing model. It allows you to increase rates when demand is strong and vice versa.
In such a way, you can strike the right balance between occupancy and nightly rates and optimize your Airbnb income.
So, while the comparable rental income available on the Mashvisor calculator is an excellent indicator of the potential of a property for sale, it doesn’t mean the number is set in stone. You can always work on optimizing the performance of your property and maximizing profit.
Airbnb Occupancy Rate
Short term rental booking rates are dynamic, depending on the season, which is usually unique to every individual market. As such, knowing the expected – or average – occupancy rate is crucial for anyone who wants to find out the profitability of any short term rental property for sale.
The higher the occupancy rate, the more revenue the property can generate every month. High Airbnb income ensures that you’re still comfortable during off-peak season and can avoid running into financial issues.
The Airbnb calculator provides an estimated Airbnb occupancy rate based on the performance of comparable rental properties in the chosen neighborhood.
However, there are plenty of things that you can do to increase the occupancy rate of your vacation rental investment property and push up both cash flow and profit.
For example, you can optimize your marketing efforts by listing on multiple vacation rental websites like Airbnb and Vrbo. You can also create top listings with professional photos and share them across social media and within your network. You can even create your own website to promote your short term rental through content marketing and paid ads.
Meanwhile, you need to work on making sure that your Airbnb quests are always satisfied and leave you positive reviews. Your property’s ranking is a major component of how easy it will be to find future guests.
Also, as mentioned above, you can adopt a dynamic pricing strategy to capture reservations even during the low season.
Airbnb Startup Costs and Monthly Expenses
Spending money on any investment is a must. That’s why it’s important to come up with an estimate of exactly how much money you should expect to spend before investing. Expenses are also important when calculating expected cash flow and return on investment (ROI).
Our short-term rental calculator provides you with the one-time costs and the recurring expenses you can expect to incur. All the numbers are sourced from reliable sources and are adapted to the prevailing rates in the local real estate market.
Here is a breakdown of the startup costs and monthly expenses you can get on the Airbnb vacation rental income calculator:
- Closing costs
- Furniture and appliances
- Repair estimates
- Property insurance
- Rental property tax
- Property management fees
- Cleaning fees
- Property maintenance
- HOA expenses (if you buy a condo or another property within an HOA)
Typically, an Airbnb owner faces more costs than a traditional rental owner – or landlord. Nevertheless, our nationwide real estate market analysis shows that vacation rentals are – on average – more profitable than their traditional counterparts. It is because rental rates are also higher.
As an investor, you might know that some of your expenses will differ from the market averages. For instance, you might plan to make major renovations to the property to boost your daily rates. Or, you might decide to manage the vacation rental yourself instead of hiring a professional Airbnb rental property management company.
Of course, with our vacation rental income calculator, you can adjust the expenses as you deem fit. You can do so by changing the existing numbers, removing existing costs, or adding new custom costs. As always with our calculator, the remaining numbers will be automatically computed to customize your short term rental property analysis.
Airbnb Cash Flow
Airbnb cash flow refers to the difference between the rental income and the Airbnb rental expenses. If you’re new to short term rental investments, we recommend focusing on positive cash flow properties. It is the only way to guarantee that you will make money from Airbnb rather than lose money.
It is why you need to conduct a cash flow analysis before investing in any vacation rental property. The cash flow calculator, integrated within the Mashvisor short term rental property calculator, provides you with readily calculated cash flow estimates for any property you want to analyze.
When using a cash flow calculator for vacation rentals, you can see right away which properties will yield positive results. A positive cash flow Airbnb rental will settle all the monthly expenses, leave you with a good profit, and create a decent monthly income stream.
Airbnb Cash on Cash Return
The Airbnb profit calculator provides an estimate of what ROI you can expect to make on your short term rental. The two main metrics when calculating the ROI for rental properties are the cash on cash return and the cap rate.
The cash on cash return is the more comprehensive measure as it takes into account the total amount of money you’ve invested in the property. The short term rental calculator helps calculate the cash on cash return. It takes into consideration the cash down payment you made while buying the property, as well as other cash expenses, like closing costs and repairs.
As such, it’s always important to get the cash on cash return calculation before investing in any property, especially if you’re getting financing for your investment. In Airbnb investing, aim for a good cash on cash return of 8%-10% or more. With the best short term rental property calculator, you can easily find properties with double-digit profits in the US market.
Related: 100 Best Short Term Rental Markets
Airbnb Cap Rate
The Airbnb cap rate is another return on investment metric. Investors can use the cap rate to quickly compare the profitability of investment opportunities without factoring in the financing method. In short, the cap rate estimation assumes you financed the investment 100% yourself.
The cap rate calculation allows you to get an idea of what your short term rental property is worth. It also helps determine how profitable the property is compared to its market value.
In terms of a good cap rate, the values recommended by experts are usually in the range of 8%-12%. It’s smart to put a limit on the cap rate because it also measures risk in short term rental property investments.
With the help of the top vacation rental property calculator, you can ensure that your property’s cap rate is exactly within the given range above.
Related: Where to Find the Best Beginner-Friendly Cap Rate Formula Calculator
Before investing in a short term rental property, you should know that your financing method will significantly affect your return on investment and cash flow. That’s why the Mashvisor Airbnb calculator helps you choose the best financing strategy.
You simply enter the mortgage details, and the tool shows you the size of each down payment, the loan type, and the interest rates. Through the interactive investment property analysis, you see how each factor affects your Airbnb cash flow and cash on cash return.
What Will Even the Best Vacation Rental Calculator Not Tell You?
The Mashvisor vacation rental calculator is an extremely useful tool that helps investors save a lot of time and effort while making informed, decision-based investment decisions.
However, no tool can claim perfection. There is one crucial aspect of Airbnb investment you need to take care of yourself, even if you use Mashvisor for the rest. It is knowing whether short term rental properties are legal or illegal in your preferred real estate market.
Many cities across the US have imposed major restrictions on Airbnb rentals. In some locations, non-owner occupied short term rentals are simply illegal. These markets include major tourist destinations, such as Las Vegas, New York, Los Angeles, and San Francisco.
Nevertheless, there are plenty of top tourist destinations where operating a vacation rental remains a viable option. Some markets to check out include cities in the Florida real estate market, the Georgia real estate market, and the Tennessee real estate market.
Another good place to start is this list of the US cities with the least Airbnb legal issues. You should also keep an eye on our real estate investing blog, where we provide regular updates on changes in short term rental laws and regulations across the US for free.
Final Words: How to Get Started With the Top Vacation Rental Income Calculator
With the recent technological advancements in real estate, access to the best data and the top analytical tools serves as a powerful tool in the property investment world. Your Airbnb investing decisions will be only as good as the rental data and analytics platforms that you use.
Mashvisor offers you the best short term rental calculator by applying AI, machine-learning algorithms, and big data to provide you with comprehensive and accurate calculations. It comes with all the features and functionalities that you need in order to find the most profitable vacation rental properties for sale to invest in.
With the help of our Airbnb analytics platform, you can now conduct investment property search and rental property analysis with speed and level of accuracy previously unimaginable. You can easily get ahead of the competition without putting more effort or work into your real estate investment processes.
Nevertheless, the most unique thing about the Mashvisor short term rental investment calculator is that it benefits both Airbnb hosts and long term investors. The same level of analysis is available for long term rentals as well.
So, if at any point you decide to switch from the vacation rental strategy to traditional rentals, the real estate investment ROI calculator will provide you with all the help you need.
Join the growing number of smart real estate investors who use AI and predictive analytics for their short term rental business.
Sign up for a 7-day free trial to start using Mashvisor’s vacation rental calculator today.