The Mashvisor Airbnb rental calculator can help you find a profitable investment property. But is this online tool worth the investment?
If you are looking for a new real estate investment opportunity, owning an Airbnb property can be a lucrative option. Unlike traditional rental properties, this type of rental can earn you more income. Plus, the industry is on its way to recovery as more travelers look for safer accommodations.
But being an Airbnb host is a full-time job unless you hire a property manager. You spend your days communicating with current and potential guests. You have to organize cleanings after each stay. Then you must also optimize your listings and their rates to continue attracting bookings. Before you start thinking about these, though, you must first find a property that you can list on the popular short-term rental platform.
When searching for an Airbnb property, you have to make sure that the house you will be renting out has high-profit potential. This is where an Airbnb profit calculator can help you.
In this blog post, we will take a closer look at the Mashvisor Airbnb profit calculator:
- What it is and how it works
- The many metrics it calculates
- Its pros and cons
If you are wondering whether Mashvisor can help you find new investment opportunities in real estate, keep reading.
What Is an Airbnb Rental Calculator?
Generally, short-term rentals like Airbnb can earn up to three times that of traditional long-term rentals. But this is not always the case. Some locations are still optimal for traditional rental, while others are ideal for the likes of Airbnb. But how would you know if a property would do well as a short-term rental?
An Airbnb rental calculator determines a house’s potential return on investment if it becomes a short-term rental. It uses relevant data collected from many sources to project the needed estimates. The calculator generates an investment property analysis based on the following criteria:
- Size of the house
- Location of the house
- The selling price of the house
- Comparable Airbnb properties in the area
The Mashvisor Airbnb calculator gathers data from Airbnb.com’s active and verified listings. It then uses these data to provide a clearer picture of how a property would perform as a short-term rental. This way, you do not have to spend a lot of time collecting data on the platform and then pasting them onto spreadsheets. Using the Mashvisor Airbnb rental calculator, you can find decide on whether a property is worth investing in.
How the Mashvisor Airbnb Rental Calculator Works
The first thing that the Mashvisor Airbnb rental calculator takes into account is the property’s location. Using this information, it then averages the Airbnb income and other figures of comps in the area. So when you select a house from our database to open its listing page, you will already find a quick overview of our property analysis.
You may also choose to edit the numbers. These insights can help you better decide on whether to invest in that property you are looking at.
What Metrics Does the Mashvisor Airbnb Rental Calculator Estimate?
Mashvisor’s Airbnb calculator analyzes a wide range of data from Airbnb and other sources. It then uses the provided Airbnb data to help you find the best Airbnb investment property for sale. Here is a list of metrics that you can analyze using our calculator:
Rental Income
This is the amount you can expect to earn from your short-term rental property each month. Mashvisor bases its calculations on the average daily rate and occupancy rate of comps in the neighborhood. Our AI collects these listings and their data on a regular basis to ensure that you get the most up-to-date information.
Beginner investors can use this data to determine how much to charge for rent. But you may also edit this figure on the calculator to see how an increase or decrease can affect your return on investment.
Expenses
When investing in real estate, you have to spend money to make money. Our calculator also has an Airbnb estimator, which estimates how much you can expect to spend on the property before you buy it. Knowing your expenses helps calculate your expected cash flow and returns.
The Airbnb calculator has a list of major costs and their amounts, but you are also free to edit these numbers and add your custom expenses. Here are the types of costs that our calculator includes:
One-Time Expenses
- Inspection fee
- Closing costs
- Total repair and remodeling costs
- Furniture and appliances
Monthly Expenses
- Insurance
- Utilities
- Property management fee
- Maintenance costs
- Property tax
- HOA dues
- Rental income taxes
- Cleaning fees
Mortgage
If you plan to use financing to buy your Airbnb property, our calculator will include this in its projection. Here is how it works:
- Either select the listing price or type in the price you are planning to pay for the house.
- Set your down payment amount. You can toggle the numbers to switch to either percentage or dollar figures.
- Select the mortgage type: fixed-rate, interest-only, or adjustable-rate.
- Choose the loan term: 15 years or 30 years.
- Type in the interest rate.
You can find how your mortgage affects your cash flow and earnings by scrolling down to the Investment Payback Balance section.
Cash Flow
This is the difference between your monthly income and expenses. Beginner investors should focus on buying a positive cash flow property as they tend to pay for themselves and give out a steady income stream. The more cash flow you earn from your Airbnb rental, the bigger your investment becomes.
But acquiring a property that can generate a positive cash flow from the beginning might mean having to buy it in cash. If you can only buy a house using financing, note that you might get a negative cash flow in the first few years as you pay off your mortgage and build equity.
Cash on Cash Return
This is one of the most important metrics for investors, especially those who are financing their Airbnb property or doing an Airbnb arbitrage. Cash on cash return provides a more comprehensive view of the rental home as it calculates the ratio of your annual cash flow (before taxes) to the total amount of cash invested in that same period.
For example, if you are financing your Airbnb property, you will divide your annual net operating income (before taxes) by the total mortgage payments you made in that same period. Meanwhile, for Airbnb arbitrage, you have to divide your net operating income (before taxes) by the total rent you paid in that same period. The result for either formula is the cash-on-cash return, which is expressed as a percentage.
Cap Rate
This metric allows investors to quickly compare the profitability of an investment property without taking financing into account. Instead of cash invested, you will be dividing your net operating income (before taxes) by the property price or current market value. The cap rate indicates the property’s intrinsic, natural, and un-leveraged rate of return.
While this metric can be useful for quickly comparing the relative value of similar properties on the market, it should not be used as the sole indicator of a house’s profitability. Since it does not take into account other factors that might affect the property’s value in the future, it does not provide an accurate picture of an Airbnb rental’s potential. This is why Mashvisor relies more on cash on cash returns when determining the profit potential of a property.
Occupancy Rate
Depending on its location, your property may experience fluctuations in bookings because of seasonality. For example, if your Airbnb is in a ski town, you are likely to get more bookings during winter. To calculate your expected Airbnb income, we take into account the occupancy rate. The more bookings you get in one month, the more income you could generate in that same period.
As much as possible, you would want to have an occupancy rate of at least 51% or earn enough income to cover the off-season. The Mashvisor Airbnb calculator estimates the Airbnb occupancy rate based on the historical performance of comps in the area.
10-Year Payback Balance
While the cash flow shows you how much you will have leftover after deducting your monthly expenses, it does not give a complete picture of your investment. The 10-year payback balance shows your accumulated earnings after 10 years. It takes into account all of the figures used in the calculator and summarizes them in a table view.
Here, you can see how much you are getting at the end of each year for the next 10 years. You might find, for example, that even if your monthly cash flow is positive, your investment will not be in the green until after a few years because of the high startup costs. This tends to be the case when you pay with financing.
You can use the 10-year payback balance table to decide on whether the property is worth investing in. It is also a good visualization tool to share with your partners and lenders as it provides enough information about the property without overwhelming them with the little details.
Pros and Cons of the Mashvisor Airbnb Rental Calculator
Excuse us for tooting our own horn, but we believe that Mashvisor has one of, if not the best Airbnb calculators available. Here are some reasons why:
Investors Can Save Time Analyzing Properties
Mashvisor’s greatest strength lies in saving real estate investors time by providing everything they need to analyze potential investment properties. We pull in data from multiple reliable sources such as the MLS, Auction.com, Airbnb, public records, and more to provide accurate estimates in our calculator.
This can take out the guesswork for beginner investors who have no idea how much rent goes in a certain neighborhood or how much closing costs may amount to. Investors who want a more sophisticated analysis when figuring out the rent and other figures in their chosen area have found our calculator to be reliable.
Interconnected Features
While other calculators are separate tools that require you to input the address or property features, the Mashvisor Airbnb rental calculator is embedded in every listing page on its database. You do not have to go on another website to look for a property before using our calculator.
If you are not even sure where to invest yet, you can use the heat map on our Property Search page to find the best-performing neighborhoods anywhere in the US. Just set the map to highlight which parts have the highest cash on cash return, rental income, or Airbnb occupancy rate.
Meanwhile, the Property Finder lets you search for properties in up to five cities at a time to find the one with the highest profit potential. When you find a property that interests you, click on it to open its listing page, which contains information about the home as well as the Airbnb rental calculator. In that section, the income, expenses, and occupancy rate have already been estimated by our AI based on actual comps in the area. But you can edit the figures if you already know how much you will charge for rent or spend in each category.
Everything You Need on One Page
Whereas other calculators require you to go to different pages to find different information, Mashvisor provides everything you need–from details about the property to our insights about the neighborhood–on the listing page itself. We also made sure to organize these details to make them easier for you to understand and analyze.
The One Caveat
While some Airbnb investment platforms offer their Airbnb income calculator for free, investors must sign up for our comprehensive service to use our tools. It is, however, worth the investment. The other “free” calculators offer only basic insights, meaning you have to do your own legwork to research other information you need to analyze a property. But with Mashvisor, you can access the features you need to search for and analyze potential Airbnb rental homes.
Begin Your Search for the Best Airbnb Property With the Mashvisor Airbnb Rental Calculator
Acquiring the most profitable property as your next investment and charging the optimal rate will help you reach your investment goals in no time. But first, you need an Airbnb rental calculator like Mashvisor that not only lets you compute your cash flow and returns but also provides estimates taken from reliable sources. By giving you access to such powerful data, you will have enough information to decide which Airbnb rental home to invest in.
To use 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.