As an Airbnb host, you want to maximize your profits and ensure that you stay competitive when it comes to pricing. In order to do that, you must first figure out what your space is worth. Fortunately, there are tools available that can help you accurately calculate what to charge for your Airbnb listing.
Here’s how to use an Airbnb host calculator to determine the profitability of your Airbnb listings.
Airbnb calculators take location into account with specific calculators developed for different markets across regions and countries. This ensures that you always have an Airbnb price calculator that applies only to your specific market.
With an Airbnb host calculator, you’ll be able to calculate income potential for a new listing, as well as, maximize the profitability of your existing listings. All of this information is delivered to you instantly as soon as you enter the address of your property or your business assumptions into the calculator.
An Airbnb calculator is essential for uncovering current and future market trends. Airbnb hosts can also use it to figure out the most profitable locations for future rental investments. If you want to grow your business, you need this information to stay competitive and ensure that the market metrics will always lead to profitability.
You’ll be able to calculate the following metrics:
Cash flow: Cash flow is the rent less the property expenses. Only a property that has a positive cash flow is one that is worth renting.
Capitalization rate (cap rate): The cap rate is the ratio that results from dividing the net operating income for your property by the market value of the property. A property that has a cap rate of 10% or greater is generally considered to a good investment, excluding other factors.
Occupancy rate: The occupancy rate is the ratio of time in which a property is rented as supposed to when it is vacant. Some of the factors that determine occupancy rates include location, seasonal changes, guest reviews, and marketing. Maintaining a high occupancy rate increases profits for your business.
Potential rental income: The potential rental income is the estimated amount that you could potentially earn from renting your property on Airbnb.
Depending on the Airbnb calculator solution that you decide to use, you’ll be offered different options to develop detailed forecasts that will help you to create a growth strategy for your business.
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 in order to obtain rental market data. Resources like MLS are not directly available to users outside of the real estate industry, which makes an Airbnb host calculator an indispensable tool for accessing real estate market data.
Now that you understand the essential information that these calculators can provide, you should know that there are already solutions available so that you don’t have to research property information or create your own spreadsheets.
Here are some of the most popular tools on the market for estimating the Airbnb revenue:
Eliot uses billions of pricing points from vacation rentals in order to accurately come up with an estimated figure for your potential short-term rental revenue. You’ll get an average estimate for rentals in your area of a similar size to your own property. It can also predict trends and surge price events. It offers a widget and API so that you can connect it to your website or other tools that you use to manage your Airbnb business.
Mashvisor claims to be able to turn 3 months of research into 15 minutes, thanks to the comprehensive details delivered by its Airbnb host calculator. With Mashvisor, you’ll get the information that you need to outperform your local rental market.
Mashvisor pulls data from over 450,000+ properties and offers the option of calculating both Airbnb and traditional rental comps for any city area covered by its calculator. It uses a heat map to identify areas that meet your search criteria and you can also see how many rental properties there are in a city.
LearnAirbnb goes beyond a simple Airbnb host calculator to provide a comprehensive financial model for your Airbnb business. It is a downloadable template that uses formulas to create financial statements for your Airbnb business. With this calculator, you can produce a 2 Year Airbnb Profit Statement and an Airbnb Return on Investment (ROI) Calculation.
Start by inputting your assumptions including startup costs, recurring costs, revenue and your Airbnb pricing strategy. LearnAirbnb then uses spreadsheet formulas to automatically calculate the details of your financial statements.
While every property is different, an Airbnb calculator can help to fill in any questions you have about making new rental opportunities happen. Before you invest in your next property or post a new listing, try these tools to get some estimates for your business.
Pro tip: If you want to fully automate your hosting business and increase occupancy rate dramatically, vacation rental software is the way to go. You can start for free and create an account right now.