A short-term rental property is an excellent way to increase your income. For this reason, an Airbnb host calculator will come in handy.
Table of Contents
- Is It Still Worth Buying an Airbnb Property in 2023?
- What Is an Airbnb Hosting Calculator?
- Where to Find the Best Airbnb Hosting Calculator in 2023
Buying an investment property and getting it listed on a website like Airbnb is a strategy that a lot of real estate investors use to amplify their income. However, not all locations offer the same returns as far as vacation rentals are concerned. In this article, we will take a look at how an Airbnb calculator will benefit you as an investor.
For years, real estate investors have been adding houses, duplexes, apartments, and other properties to their investment portfolios. While they were once slated to be used as long-term rentals, nowadays, investors are looking at short-term rental strategies like Airbnb.
In recent years, short-term rentals, including Airbnb properties, have proved themselves to be far more lucrative investments that provide higher returns on investment. Depending on the property, some Airbnb listings can make up to double or even triple the average traditional monthly rental income of any given city.
Though you cannot say the same for all properties in a certain area, using an Airbnb hosting calculator will help you determine the profitability of an Airbnb market in general. Such a tool will also enable you to see the Airbnb income potential of any given property.
Keep reading to find out how an Airbnb estimator can boost your investments in 2023 and what is the best Airbnb hosting calculator in the market.
Is It Still Worth Buying an Airbnb Property in 2023?
With COVID-19 and subsequent travel restrictions now a thing of the past, you may be asking the question of how to invest in real estate. You need to think about it, given the current economic climate (high mortgage rates and inflation), and if it’s really worth investing in Airbnb in 2023.
While there are some drawbacks and hurdles to maintaining an Airbnb today, the short-term rental strategy seems to generate money and is a great source of income for many people.
The Upsides of Owning an Airbnb Property
Listed below are some reasons why investors continue to add Airbnb properties to their portfolios:
The Demand for Airbnb Rentals Is High
When becoming an Airbnb host, it is important to know that a property will only generate rental income when occupied. It is why demand is so important when it comes to owning a short-term rental. Without a high Airbnb occupancy rate in the area, your property will likely be vacant for days on end, costing you a lower return on investment.
While long-term rental properties will always be in demand, Airbnb is a staple among travelers and tourists alike. With the strong demand, the Airbnb platform brings in real estate investors who see it as a huge market to tap into.
In 2020 alone, Airbnb reported an estimated 193 million bookings across the site. While it may not be a record, it still shows that the demand for Airbnb properties and other short-term rentals remains strong.
Now that we’re in a post-pandemic era and things are going back to normal, the demand for Airbnb rentals is going up again. Demand continues to rise every month and looks to remain very strong in 2023.
They Give You a Higher Rental Income
Aside from the very high demand for Airbnb, it is no secret that Airbnb properties can bring in higher rental income compared to long-term rental properties if done correctly.
While long-term rental properties come with a fixed rate, Airbnb prices can fluctuate per season or even throughout the week. During the weekdays, most hosts will offer their properties at a lower price while increasing it for weekend stays.
The flexible pricing allowed hosts to set their own Airbnb daily rate, depending on the demand. They can potentially earn double or triple the average monthly income a traditional rental would generate.
Airbnb Remains Quite Popular
Since its launch in 2008, Airbnb has changed the way people look for travel accommodations throughout the world. As an often cheaper alternative to traditional hotels and establishments, people have been opting to stay at Airbnb properties.
While previously, people would search for the best hotels in the area, many have begun directing their searches to Airbnb and similar websites instead. This type of traffic and popularity is what draws real estate investors to the Airbnb business model.
With very minimal effort and an almost built-in marketing system, their properties can be seen by millions of people a day and draw in constant guests with just a few clicks.
The Downsides of Owning an Airbnb Property
As always, there are also a few drawbacks to owning an investment property and listing it as a short-term rental home. Here are a few reasons why some investors do not opt to go down the Airbnb route:
The Competition Is Tight
According to this updated article from Time Magazine, an “Airbnbust” is upon us. Not because people don’t want to travel but because the supply has finally caught up with and has overtaken the demand for Airbnb properties. It has caused Airbnb occupancy rates to go down, despite the strong demand for vacation rentals.
Market analysts say that plenty of real estate investors purchased properties and listed them on vacation rental sites like Airbnb. As of September 2022, the number of short-term rentals listed on the market was up 23.2% year-over-year to 1.38 million.
Investing in an Airbnb property at this time is something for you to think about, given the high inventory available on the rental market.
The boom in supply can be attributed to the pandemic’s record-low interest rates and the increase in remote work opportunities. Those with enough savings invested in second homes and converted them into vacation rentals during the pandemic. White-collar workers were the ones who mostly turned up and took over the market to take advantage of it.
The Expenses Are Costly
The prospect of owning a vacation home is quite attractive to a lot of investors because of the financial returns. However, if you plan to invest in an Airbnb property, you should know that it comes with certain fees and expenses that long-term rentals don’t have.
Airbnb fees are one of the things that will determine the way you price your rental property. Airbnb charges hosts a flat fee of 3% of the booking’s subtotal. The booking subtotal includes your nightly rate, along with other fees you may charge your guests, such as cleaning fees. It does not include taxes and Airbnb charges.
The fees Airbnb charges are used for the company’s operating costs to ensure that hosts and guests receive quality products and services.
On top of the Airbnb fees, you also need to take into account the typical expenses required to maintain a rental property. They include maintenance and repairs, utilities, and other legal and governmental fees associated with running a rental property business.
However, if you do your research well and crunch the numbers, you can set nightly rates that are appropriate for the market of your choice. Doing so will allow you to operate the business and still bring home a decent profit.
It Can Be Very Time-Consuming
Owning a rental property business can be considered a passive income source, depending on the rental strategy. In most cases, long-term rentals enjoy a greater advantage over vacation rentals because the turnover frequency is lower. Long-term rentals usually come with contracts for at least six months before a tenant moves out.
In this case, landlords don’t need to deal with frequent inspections and fixes of the property. They also don’t need to worry about paying for utilities as tenants are the ones responsible for paying for them. A landlord just needs to ensure that the house is habitable and up to par with building standards.
On the other hand, managing a short-term rental property can be quite time-consuming as the turnover frequency rate is far greater compared to long-term rentals. Generally, the higher the Airbnb occupancy rate, the busier the vacation rental owner is.
You will need to make sure that the property is always fully stocked with the essential items before a guest arrives. In addition, you must monitor and respond to messages and inquiries. Also, you need to regularly inspect the property for any damages or maintenance issues.
Owning a vacation home is nowhere near a passive income source. If you want to have more free time as a vacation rental owner, you may consider working with a property management company.
What Is an Airbnb Hosting Calculator?
While many benefits come with a short-term rental such as an Airbnb property, there are some drawbacks, too.
One of the disadvantages is that it’s quite difficult to project how much of an Airbnb return on investment a rental property can truly yield.
Unlike traditional rentals, where there is a fixed price per month, calculating the rental income that an Airbnb can generate is quite tricky due to its dependency on how often it is occupied. While it would be ideal to get your property booked for every day of the month, it will likely not be the case.
This is why many real estate investors are now using and relying on calculations and metrics from an Airbnb rental calculator. As the name suggests, an Airbnb hosting calculator is used to estimate and project how profitable a certain property will be as a short-term rental on Airbnb.
By pulling data and analytics from real estate websites, city data, and metrics from the Airbnb site itself, they will be able to determine a property’s profitability. This includes things like the daily rate, the Airbnb occupancy rate, the potential rental income, the cash-on-cash return, and the cap rate.
If done right, such a real estate investment tool can really help you determine whether or not a property is worth buying and listing on Airbnb.
Though it is possible to manually perform all the calculations to determine how profitable a property may be, it is a long and tedious process.
Airbnb Calculator: An Easier Way to Get Things Done
When it comes to real estate investing, time is of the essence, and while calculations are necessary, gathering your own data and crunching the numbers could take months. By then, your data may no longer be up to date and no longer a good reflection of the Airbnb real estate market.
That is why using an Airbnb hosting calculator is a good idea. Not only will it take a few minutes to get the results, but using a reliable Airbnb profit calculator will ensure that your data and analytics are all up to date.
By using an Airbnb estimator, you are sure that you are making your real estate investments based on accurate and reliable data that is current and reflective of the current Airbnb market.
Where to Find the Best Airbnb Hosting Calculator in 2023
While many sites offer their own version of an Airbnb earnings hosting calculator, not all of them were created equal. The whole idea of using an Airbnb calculator is to use a smart tool that can gather accurate Airbnb data to show the potential profit from a short-term rental.
However, depending on which Airbnb hosting calculator you use, you may find that the calculations are either inflated or underscoring specific properties. It is an issue as you would not want to invest in an underperforming property. You would also not like to miss out on a potentially successful Airbnb.
To avoid such a situation, you should always check where the Airbnb profitability calculator you plan to use gets its data from. Ensuring that the Airbnb income calculator is pulling data from reliable sources may require an additional step on your part. However, it can make a world of difference in your Airbnb investments and income.
The Only Airbnb Calculator You Will Need
That is why Mashvisor’s Airbnb hosting calculator is one of the best in the market. As a real estate data company at our core, we understand the importance of getting all the most up-to-date information and metrics in making any type of Airbnb investment.
For this reason, our Airbnb calculator gathers big data directly from the Airbnb website itself, as well as other available real estate data available in that area.
By using multiple sources, we are able to closely estimate the profitability of any property you may be considering. We can give you the bigger picture and detailed breakdown of its potential nightly rent, occupancy rate, monthly rent, cash on cash return, and cap rate.
Whether you are a new or seasoned Airbnb real estate investor, you are sure to get all the information you need to make the best decision for your investment portfolio.
Get started with Mashvisor today on your way to a thriving real estate investing career.
Using the Mashvisor Airbnb Calculator
Mashvisor’s Airbnb hosting calculator is pretty straightforward and can be easily maneuvered by anyone looking to invest in an Airbnb. It will help you from finding a potential property for investing to breaking down every detail about its profitability. Mashvisor’s Airbnb estimator is a great tool that can give you a comprehensive look at any Airbnb real estate investment.
Here is how you can use our tool:
1. Finding the Perfect Location
When buying any type of real estate investment, location is everything. For an Airbnb investment, the market will majorly determine how much traffic and how many visitors you are likely to attract throughout the year. That’s why Airbnb hosting calculators will usually start with zeroing in on the property’s location.
For investors, a good start is picking a state and a city that sees tourists and all types of travelers for vacation and business. It will help ensure that the demand for your investment property is always high, resulting in more occupancies than vacancies.
However, with so many people investing in Airbnb rentals, you may need to refine your property location search even further.
Mashvisor’s real estate heat map can help you not only pick the best city but also the best neighborhood in the area for an Airbnb. Using Mashvisor’s investment property search tools, you can filter through your search by which neighborhood offers the best Airbnb market.
2. Taking into Account the Initial Investment and Maintenance Costs
After finding a couple of potential properties, Mashvisor’s Airbnb hosting calculator will show you the upfront cost of buying an Airbnb property. It will also give you estimates of other expenses that may come with the property. The expenses include taxes, HOA dues, repairs, loan and mortgage payments, and others.
Knowing all of the above will only help you prepare to take on the investment. Additionally, it will give you a better idea of how much return you can realistically expect after deducting the cost of owning the Airbnb property.
3. Gathering Airbnb Metrics
Once you’ve found a place and seen the costs to buy and maintain an income property, Mashvisor’s Airbnb hosting calculator will take them into account and calculate the following:
- Airbnb Daily Rate
- Airbnb Occupancy Rate
- Airbnb Rental Income
- Airbnb Cash Flow
- Airbnb Cash on Cash Return
- Airbnb Cap Rate
More importantly, Mashvisor’s Airbnb calculator will compare the above Airbnb metrics to the performance of traditional rentals within the area. It will help you determine if it is truly better to invest in an Airbnb property or in a more traditional rental in your chosen market.
4. Showing Rental Comps and Airbnb Performance Comparisons
With all the metrics for your potential investment property in your hands, Mashvisor’s Airbnb hosting calculator compares its performance to that of other Airbnbs in the surrounding area.
Comparison with properties similar to your potential investment will allow you to see the performance of different Airbnbs in the area. You can check the occupancy rate, average rental income, cash on cash return, and other metrics.
Overall, Mashvisor’s Airbnb calculator will give you a comprehensive overview of the Airbnb property you are considering. It will also show you a direct comparison to similar properties in the area.
To get access to our real estate investment tools, sign up for Mashvisor today.
The Bottom Line
Airbnb analysis tools, like an Airbnb host calculator, can help real estate investors diversify their portfolios in 2023.
Using an Airbnb calculator allows you to make investment decisions based on up-to-date metrics and data without manually finding and calculating them yourself. It can be valuable throughout your investing journey, from helping you find a potential location to comparing a property’s potential performance on the Airbnb market.
Investing in rental properties in 2023 is tricky, given the high interest and inflation rates, but if you use the right tools to compute your ROI, you’ll be all right.
Fortunately, Mashvisor’s Airbnb calculator can help you do the math on potential investment properties in any market of your choice. You can come up with a highly accurate and realistic rental property analysis as you are given access to its huge database. You can use rental comps found on the site or customize your analysis based on numbers you get from your research.
Aside from giving a comprehensive look at the potential any property can have on Airbnb, the Mashvisor platform provides investors with the most recent data from the Airbnb website. You can also access data from other reliable real estate sources, making it the number 1 Airbnb hosting calculator this 2023.
Learn more about how Mashvisor can help you find the best deals in the most profitable markets by scheduling a demo now.