In order to evaluate how profitable an airbnb investment may be you must first determine how much money you think the property can generate. Determining the anticipated average daily rate (ADR) and occupancy rate will allow you to anticipate the gross annual revenue for a prospective short term rental investment purchase. There are a number of different ways you can do this. Simply looking at similar properties on airbnb can help you get a sense of the ADR in the area, and looking at their calendar and timing of reviews can help you determine occupancy rate. There are also a number of different online based estimator softwares that can help. Below are links to some popular tools for estimating potential short term rental income.
Once you have an idea of how much income a given property can potentially generate, the next step is to determine how profitable it may be as an investment. Our STR Investment Calculator allows you to easily calculate expected cash on cash return and cap rate. Simply download the spreadsheet below and enter the property details to see how profitable a given property may be for you.
