Today, we are focusing on the features, pros and cons, and more of an Airbnb comparison tool. Stay with us and find out how to use one properly.
If you’re not adjusting your nightly prices based on seasonality, the day of the week, community events, and other factors, you’re heading in the wrong direction. Maintaining the same pricing every day of the year costs you money.
To ensure that your rates remain competitive all year and that you maximize your revenues, you should begin utilizing a vacation rental pricing tool. Such tools allow you to alter your rates and distribute them to your networks automatically. They help you avoid wasting money from setting your rent too high or too low.
They are crucial components of an investor’s toolkit because they can significantly improve income. Let’s look at how the Airbnb pricing tool functions and what tool to pick to get you started.
Table of Contents
- Does Airbnb Smart Pricing Work or Not?
- Dynamic Pricing vs. Rule-Based Pricing: What’s the Difference?
- Why Should You Use an Airbnb Comparison Tool?
- The Best Airbnb Pricing Tool
- Top 10 Cities With the Highest Average Daily Rate
- Conclusion
Does Airbnb Smart Pricing Work or Not?
You might ask why you should utilize an automatic Airbnb comparison tool when Airbnb provides its Smart Pricing option. In such a situation, the answer is simple—Airbnb Smart Pricing does not act solely in your best interest.
The issue with Airbnb Smart Pricing is that it serves two functions. It doesn’t simply want to assist hosts to make more money—it also needs guests to pay the least amount of money possible. As a result, the tool will usually undercharge your rentals.
Using the tool can result in high occupancy, but it will not provide the highest daily rates. Furthermore, if you’ve been leasing out your space for a long time, you’ll know that optimizing for profit rather than occupancy is the method to go for.
Moreover, while Airbnb Smart Pricing allows you to choose a minimum and maximum rate, it does not allow you to set a base pricing. It provides almost no room for personalization, and the tool is likely to suggest the same price every day.
Rule-Based Pricing vs Dynamic Pricing: What’s the Difference?
Airbnb comparison tool comes in two types: rule-based pricing and dynamic pricing.
Rule-based pricing solutions enable you to automate your price by developing a set of pricing rules specific to your listings. The strategy involves thoroughly understanding your local market and the fluctuations in demand throughout the year.
Airbnb dynamic pricing systems, on the other hand, evaluate changes in market supply and demand using big data and machine learning technology. They offer pricing recommendations based on various data factors, ranging from past performance to special events and community celebrations.
While the above solutions are both acceptable options, rule-based pricing is often preferable for smaller hosts because it is easier to implement and can be customized to your specific listing. On the other hand, if you are a seasoned host, you’ll be better off with the dynamic pricing Airbnb tool since you will save a lot of time when you implement it. You can provide price suggestions in bulk rather than tailoring your pricing strategy to every rental.
What Is a Dynamic Airbnb Pricing Tool?
A dynamic pricing tool is a software that analyzes your rental history—as well as external aspects such as season, market demand, occasions, and property type, among others—to provide an ideal price for your vacation rental. The data that the programs evaluate may come from a variety of sources. However, typically, they compare Airbnb prices from your rental properties to that of your competitors and offer an optimal price point for you.
Other elements that may determine the proposed pricing are the availability of your location and the services you provide.
Why Should You Use an Airbnb Comparison Tool?
If you own a rental business, you may be familiar with the Airbnb pricing tool since most hosts are now talking about the simplicity they provide. If you’re asking why you should spend on a pricing tool, here are some reasons.
As a vacation rental owner, you must have a lot on your schedule. Would you be able to devote time to continually monitor the pricing your rivals give, the activities taking place locally, or the fact that it is peak season? Wouldn’t it be simpler if you could rely on a trusted tool to handle all the work for you?
As we previously mentioned, there’s an issue with the built-in technology in that Airbnb’s primary goal is to deliver the lowest possible pricing to visitors. A professional dynamic pricing tool, on the other hand, is more focused on giving you the highest nightly charge.
Such pricing tools are the most secure and straightforward approach to boosting your Airbnb business revenues and adjusting your Airbnb listing rates. And now that we got the part covered, let’s focus on the reliable Airbnb comparison tool that can boost your income.
The Best Airbnb Pricing Tool
You may be wondering what the tool that will help you out with all the analysis is. It’s Mashvisor. We’ll show you Mashvisor’s Airbnb pricing tool and the wealth of valuable Airbnb data it offers.
Mashvisor’s Airbnb Calculator
Mashvisor’s Airbnb comparison tool may assist you in determining how much to demand rent for any Airbnb unit listed on the site and any off-market real estate property whose addresses you personally enter into our database. It does so by giving nightly rates and monthly Airbnb rental income statistics.
Our dynamic Airbnb investment calculator generates highly accurate figures for nightly prices based on Airbnb rental comparisons from dozens of active listings.
Mashvisor also provides such data since you need to evaluate Airbnb income and see how much cash you can anticipate generating every month. The provided nightly rate and Airbnb occupancy rate calculate the expected monthly Airbnb rental revenue.
Mashvisor’s Airbnb Comparison Tool: Additional Features
As we mentioned, becoming a professional Airbnb investor entails more than just determining the appropriate nightly rate. Before investing in Airbnb, you should ensure that the property offers the best profit potential.
Mashvisor’s Airbnb calculator was created to assist Airbnb investors in making the correct investment decisions possible by leveraging the latest Airbnb information. You can obtain a complete set of important Airbnb metrics that you need to manage your short-term rental investment with several clicks.
Mashvisor’s comparison tool incorporates data from Airbnb, and all of our estimates and statistics are confirmed by the hosts, so you can trust the figures you’re viewing. It essentially compresses months of research into 10-15 minutes. It helps you find lucrative investment property for sale before the rest of the market.
Aside from aiding you in determining how much to charge, below is a summary of the other data provided by our Airbnb pricing tool.
1. Cash Flow
Your rental income must meet your rental expenditures for your short-term rental property to be viable. If that’s not the case, you’ll wind up with a negative cash flow and risk losing your home to foreclosure as a result of missing mortgage payments.
If you invest in positive cash flow rental properties, you need to do a cash flow Airbnb analysis as part of your Airbnb investing research. The Airbnb calculator gives easily generated cash flow predictions, eliminating the need for you to perform the calculations manually.
2. Return on Investment
The return on investment is an essential performance metric for determining the success of an Airbnb investment. It is often estimated using two measures, based on whether or not the type of funding is considered. Airbnb cash on cash return and cap rate are two of the indicators. Each of the parameters is also generated by our Airbnb comparison tool.
3. Rental Comps
Before purchasing an Airbnb rental home, investors should do rental market research to evaluate how similar Airbnb houses in the region (Airbnb rental comps) are performing. Mashvisor’s Airbnb comparison tool speeds up your job by giving active rental comps.
The Rental Comps tool allows investors and prospective hosts to view similar Airbnb property listings in a specific location and compare their rental performance.
4. Occupancy Rate
It is one of the factors used to anticipate Airbnb income. Mashvisor’s Airbnb comparison tool also gives investors the Airbnb occupancy rate data. Evidently, the higher the occupancy rate, the better the rental revenue, despite seasonal swings in demand. It means that the residence will generate enough money to cover you throughout the off-season and avoid cash flow issues.
5. Rental Costs
Our calculator will predict the one-time starting charges, as well as the regular rental fees you should anticipate spending. The figures are based on current market pricing. You can also use the information to calculate other important Airbnb parameters.
One advantage of using our Airbnb price tool is that you can manually change any of the readily available rental charges and add any other costs you are aware of that might not have been included. The software will quickly display how the changes influenced other estimates.
6. Occupancy Rate Insights
Airbnb reviews may significantly impact your occupancy rate. But do you know how big an influence they’ll have? Mashvisor’s occupancy rate analytics provide a solution to the problem. Determine how many good reviews you need to increase your occupancy rate and how much the rate goes up.
Now that you’ve seen how our tool works and how it can help you achieve the best ROI, let’s see some of the best cities with the most considerable average daily rate provided by Mashvisor.
Top 10 Cities With the Highest Average Daily Rate
According to Mashvisor data, as of March 2022, here is the list of the top ten cities with the highest Airbnb daily rate:
1. Pomona, NY
- Median Property Price: $476,843
- Average Price per Square Foot: $299
- Monthly Airbnb Rental Income: $7,304
- Airbnb Cash on Cash Return: 61%
- Airbnb Daily Rate: $1,025
- Airbnb Occupancy Rate: 53%
- Walk Score: 20
2. Matamoras, PA
- Median Property Price: $382,632
- Average Price per Square Foot: $176
- Monthly Airbnb Rental Income: $5,981
- Airbnb Cash on Cash Return: 94%
- Airbnb Daily Rate: $879
- Airbnb Occupancy Rate: 63%
- Walk Score: 57
3. Rancho Palos Verdes, CA
- Median Property Price: $1,859,122
- Average Price per Square Foot: $793
- Monthly Airbnb Rental Income: $13,256
- Airbnb Cash on Cash Return: 13%
- Airbnb Daily Rate: $718
- Airbnb Occupancy Rate: 54%
- Walk Score: 22
4. Clifton Heights, PA
- Median Property Price: $234,456
- Average Price per Square Foot: $162
- Monthly Airbnb Rental Income: $2,608
- Airbnb Cash on Cash Return: 25%
- Airbnb Daily Rate: $682
- Airbnb Occupancy Rate: 68%
- Walk Score: 63
5. Pleasantville, NJ
- Median Property Price: $279,377
- Average Price per Square Foot: $129
- Monthly Airbnb Rental Income: $2,126
- Airbnb Cash on Cash Return: 44%
- Airbnb Daily Rate: $663
- Airbnb Occupancy Rate: 30%
- Walk Score: 82
6. Smithville, TN
- Median Property Price: $450,500
- Average Price per Square Foot: $206
- Monthly Airbnb Rental Income: $3,588
- Airbnb Cash on Cash Return: 6.19%
- Airbnb Daily Rate: $661
- Airbnb Occupancy Rate: 46%
- Walk Score: 58
7. Coachella, CA
- Median Property Price: $352,556
- Average Price per Square Foot: $275
- Monthly Airbnb Rental Income: $3,937
- Airbnb Cash on Cash Return: 6.06%
- Airbnb Daily Rate: $657
- Airbnb Occupancy Rate: 36%
- Walk Score: 63
8. Centreville, MD
- Median Property Price: $515,892
- Average Price per Square Foot: $250
- Monthly Airbnb Rental Income: $5,088
- Airbnb Cash on Cash Return: 6.95%
- Airbnb Daily Rate: $649
- Airbnb Occupancy Rate: 39%
- Walk Score: 63
9. Florida, NY
- Median Property Price: $402,433
- Average Price per Square Foot: $231
- Monthly Airbnb Rental Income: $5,323
- Airbnb Cash on Cash Return: 7.05%
- Airbnb Daily Rate: $613
- Airbnb Occupancy Rate: 46%
- Walk Score: 46
10. Chester, MD
- Median Property Price: $564,542
- Average Price per Square Foot: $256
- Monthly Airbnb Rental Income: $4,531
- Airbnb Cash on Cash Return: 5.07%
- Airbnb Daily Rate: $602
- Airbnb Occupancy Rate: 52%
- Walk Score: 32
Conclusion
Investing in a common Airbnb comparison tool to complete your pricing research will help you create an efficient strategy and provide you with a competitive edge. Nevertheless, most Airbnb apps are pretty limited and will not offer you all of the data that you want to improve your return on investment.
The substantial amount of valuable data and insights provided by Mashvisor’s calculator makes it the most fantastic pricing tool. Aside from Airbnb nightly rates and income forecasts, you can gain access to various other vital aspects and indicators. Each of the numbers, when combined, can assist you in making more lucrative investments.
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.