Vacation rentals have become increasingly popular among travelers all over the world. Platforms like VRBO, HomeAway, Vacasa, Booking.com, FlipKey, Hotels.com, Domio, and Home Exchange have made booking a short-term rental very easy. However, all these pale in comparison to Airbnb. With a presence in more than 100,000 cities in over 220 countries, Airbnb is the most popular short-term rental platform. There are over 5.6 million active Airbnb listings, with the United States having the most listings.
Thus, if you want to make good returns in real estate, consider investing in an Airbnb investment property. Statistics show that in 2019, Airbnb had 187 million bookings and generated $4.7 billion in revenue. Due to Coronavirus-related travel restrictions and stay-at-home orders, Airbnb rentals experienced a sharp decline in bookings.
However, with the release of the Covid-19 vaccine, Airbnb is expected to rebound and generate more revenue than ever before. Besides making a good return on investment, owning an Airbnb rental also allows you to enjoy Airbnb tax deductions.
Whether you already own an Airbnb investment property or are planning to buy one, you need to learn strategies to increase your Airbnb income.
How to Maximize Your Airbnb Income
Here are a few ways to maximize your Airbnb income:
1. Choose the Right Location
The first step of Airbnb market research is finding the most profitable Airbnb locations for investment. Where you choose to buy an Airbnb rental property will determine your occupancy rate and daily rate – and, in turn, your return on investment. To start with, you can check out the 8 best cities for Airbnb investment.
Once you’ve selected a city, in order to find the 8 best neighborhoods to invest in Airbnb, you can use Mashvisor’s real estate heatmap. This tool uses property data and predictive analytics to show the average performance of rental properties in different areas. You can filter your search using the following metrics:
- Listing price
- Airbnb cash on cash return
- Airbnb rental income
- Airbnb occupancy rate
To take advantage of this handy tool, start out your 7-day free trial with Mashvisor now.
Once you’ve found the ideal location, you can use Mashvisor’s Property Finder tool to look for properties that fit your investment criteria. This search tool comes with a wide range of interactive filters including budget, location, miles from location, rental strategy, property type, number of bathrooms, and number of bedrooms.
Meanwhile, if you are interested in off market properties, try the Mashvisor Property Marketplace, which has similar functionalities.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
2. Analyze Properties Using Mashvisor’s Airbnb Income Estimator
As the name suggests, the Airbnb estimator is a tool that helps you estimate Airbnb income. Also referred to as the Airbnb income calculator, this real estate investment software uses predictive Airbnb analytics and reliable Airbnb data to analyze the profitability of investment properties. The Airbnb data you will find on this calculator includes:
- Airbnb rental income
- Airbnb occupancy rate
- Airbnb cash on cash return
- Airbnb cash flow
- Airbnb cap rate
- One-time startup costs
- Recurring rental expenses
- Airbnb rental comps
- Financing method
The Airbnb income estimator is not only reliable and accurate in Airbnb investment analysis, but is also highly responsive and interactive. This allows you to adjust your analysis according to any additional real estate data you might have.
3. Have an Effective Pricing Strategy
Your Pricing Strategy Is Key for Maximizing Airbnb Income
Your pricing strategy will determine not only how much you earn, but also the types of guests and reviews your listing will attract. The Airbnb income estimator will give you a good idea of what Airbnb daily rate you should charge for your rental property.
You should also check the prices set by other Airbnb hosts in your area to make sure that your rate is competitive. One way to maximize your revenue is to set a minimum number of nights per stay for your rental.
However, don’t have a one-size-fits-all pricing strategy. To ensure high occupancy rates which will help maximize your income, you should customize your prices according to the season. For example, if there will be a major concert, conference, or festival in your area, there will probably be a high demand. You can therefore raise your prices to take advantage of the opportunity.
Related: Should You Use Airbnb Smart Pricing?
4. Target Domestic Guests
With the coronavirus pandemic being far from over, there is still a decline in travel. Very few international tourists are willing to go out of their countries. However, travelers will still want to take vacations locally, whether in a nearby state or within their own area. You should therefore adjust your marketing strategy in order to attract domestic travelers.
Start by listing and advertising your rental on the most popular national channels. This could be social media platforms, websites, newspapers, or even radio. In your description, mention that your rental property is fully compliant with the Airbnb health and safety requirements.
If you offer free parking, mention it as well since most people will travel by car. Finally, be sure to recommend local experiences that your guests can enjoy during their visit.
5. Highlight All Your Amenities
The amenities offered in your Airbnb rental will make you stand out and enhance your chances of getting more bookings. Therefore, be sure to highlight all these amenities in your rental listing description.
This could be things like ceiling fans, heating and air conditioning, free and fast Wi-Fi, fireplace, cable TV, free parking, and full kitchen. If you provide bed linen and towels, or daily cleaning services, mention it in the description.
6. Improve Your Marketing
Having a solid marketing strategy can do wonders in increasing your bookings and Airbnb business income. Consider offering discounts based on the length of the stay or the date. You could also have special offers for last-minute or early bookers. Promote the discounted prices in your description and listing price. To ensure more visibility, share your discounts and promos on all social media channels.
As you look for new guests, take time to persuade past guests to return. Send a short email mentioning that you are offering a special deal for their next stay. You could also ask them to recommend you to their friends and relatives. If a guest enjoyed their stay at your rental, they he/she not hesitate to tell everyone about the experience.
Related: 4 Tips to Improve Your Airbnb Marketing Strategy
Conclusion
Making money with Airbnb as a host requires some visionary thinking and creativity. Applying the tips mentioned above will help you stand out from the competition and boost your Airbnb profit margin. Don’t be afraid to experiment and try out some new strategies for increasing your average Airbnb income.
Above all, use Mashvisor’s tools to evaluate Airbnb properties in the US housing market even before buy them, to ensure that you are purchasing top-performing short-term rentals.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.