Airbnb Host Calculator: How to Determine Profitability

What is an Airbnb host calculator and why should you use one? As an Airbnb host, you have a lot of things to keep under control. You have to handle guest communication, organize cleanings and make sure your guests follow your house rules. Another important thing to watch over is your pricing. To make your business profitable, you must first figure out what your space is actually worth. 

Whether you rent out an entire place or just a private room, you should set the right pricing to generate profit. You need to keep a healthy balance to ensure that your income covers the expenses and it also allows you to scale your business.

This is where an Airbnb host calculator comes into play. It can also be useful for property managers who are looking for new investment opportunities. 

Let’s take a closer look at how an Airbnb host calculator can help you with crucial business decisions.

How Does an Airbnb Host Calculator Work?

First and foremost, an Airbnb host calculator takes into account your property’s location.
There are specific calculators for different markets across regions and countries. So, you can get data for your specific area.

By using an Airbnb host calculator, you’ll be able to calculate the income potential for a new listing. Moreover, you can get insights to make smart decisions regarding your existing listings. Host calculators deliver estimations and findings instantly. All you have to do is enter into the calculator the address of your property and other required input data.

Benefits of Using an Airbnb Host Calculator

An Airbnb calculator is essential for uncovering current and future market trends. Real estate investors can use it to find the most lucrative locations for their future investments.

To grow your business and boost profitability, you need to keep up with the pricing trends.

Here are some of the metrics and projections that an Airbnb calculator can deliver:

 

Cash flow. Cash flow is the rent less than the property expenses. Only a property that has positive cash flow is one that is worth renting.

Capitalization rate (cap rate). The cap rate indicates the rate of return you can generate on your investment. It is the ratio that you get when you divide the net operating income for your property by the market value. A property that has a cap rate of 10% or greater is considered to be a good investment, excluding other factors.

Occupancy rate. The occupancy rate is the number of days during which the listing is occupied by a guest. Some of the factors that determine the occupancy rate include location, seasonal changes, and guest reviews. Maintaining a high occupancy rate increases profits for your business.

Potential rental income. It is the estimated amount that you could potentially earn from renting your property on Airbnb.

Depending on the Airbnb calculator that you decide to use, you will be able to generate different types of forecasts for your business. This will give you an opportunity to choose the best strategy to follow.

How Do Airbnb Calculators Guarantee Accuracy?

Airbnb pricing calculators pull data from reliable sources such as MLS, Redfin, and Airbnb directly. These are the same tools that professional real estate agencies use to get market data. Resources like MLS are not available to users outside of the real estate industry. This makes an Airbnb host calculator an indispensable tool for accessing real estate market data.

Top Airbnb Host Calculators

Relying on data when making a decision is a proven way to keep your business up and running. So, by introducing the right technology you will improve your decision-making process. 

You don’t have to create long spreadsheets and rake in loads of data or try to hear your gut feeling. Here are some of the most popular tools that can come in handy to estimate your vacation rental profit and potential ROI.

Mashvisor

Mashvisor claims to be able to turn 3 months of research into 15 minutes. Their Airbnb host calculator delivers comprehensive details in a few clicks. With Mashvisor, you’ll get the necessary information to outperform your competitors.

Mashvisor pulls data from over 450,000 properties. It provides real estate comps for both traditional and Airbnb rentals. The calculator fetches data for any city area that it covers. 

The Mashvisor host calculator uses a heat map to identify areas that meet your search criteria. Moreover, you’ll be able to see how many rental properties there are in a city.

LearnAirbnb

LearnAirbnb goes beyond a simple Airbnb host calculator. It provides a comprehensive financial model for your Airbnb business. It is a downloadable template that uses formulas to create financial statements for your business. 

It allows you to estimate startup and recurring costs and your revenue. Moreover, the calculator can analyze your pricing strategy. Finally, you can also produce a two-year profit plan and ROI calculation.

AirDNA

AirDNA is also a useful tool for estimating revenue and deciding on your pricing. It allows you to compare the performance of your vacation rentals to others in your area. 

AirDNA can assist in identifying short-term rental trends. Using them you can achieve the highest profitability from any new property.

It also comes in handy if you are going to extend your property portfolio. By analyzing data from over 10 million vacation rentals in 80,000 cities worldwide, the tool helps hosts to make decisions about where to buy.

Conclusion

Selecting the most lucrative property for your next investment or setting the right price will get you closer to your desired profits. By accessing the necessary data, you will be able to make the best choice right from the start. A vacation rental business based on analytics and research has a greater chance of taking off. This is why you should add an Airbnb host calculator to your digital toolbox.

The next step is to maintain success and amplify your business growth. Luckily, there are plenty of software solutions, such as iGMS, to level up your hosting efforts. Getting your business automated will save you time and remove the everyday hassle of constant upkeep. With iGMS, as a host, you can: 

• Use a channel manager to manage your multiple accounts and listings from Airbnb, Booking.com, and Vrbo/HomeAway within a single interface; other platforms can be added via iCal;
• Handle all your guest inquiries from a unified inbox and convert your regular responses into automated replies;
• Create review templates and automate the process of review send-outs directly from the software;
• Manage bookings coming from your business website, messengers, or other channels by taking advantage of our direct booking management toolkit;
• Generate invoices and receive payouts via our payment processing functionality;
• Automate cleaning schedules and collaborate with your team within a single dashboard;
• Create professional reports to keep track of your business growth.