Home Money Airbnb 101: Making Money & Calculating Revenue for Your Investment Property

Airbnb 101: Making Money & Calculating Revenue for Your Investment Property

by Louise W. Rice

So you’ve bought an investment property, now what? Well, maybe you’ve considered your investment property as a second home option, or perhaps you’d like to fix it up and rent it out. The options are plentiful, but have you considered listing your property as a vacation rental on Airbnb?

With the high rates that resorts and hotels typically charge in today’s vacation and hospitality industries, listing your property on Airbnb can be a lucrative option. Not only can you slide in and steal some of the competition, but many vacationers are also tending to use Airbnb options for the comfort of being away from other travelers.

Having an entire home for yourself while on vacation is an attractive option to consider. So, if you’d like to throw your hat into the Airbnb ring, there are a few things you should know.

How Much Can You Make?

The amount of money you can make on your Airbnb listing will depend on a variety of factors. In order to calculate this, first, you have to consider the overall package that you’re offering.

If you’ll be offering your property during peak seasons such as spring and summer, chances are you’ll be able to make a bit of money off of it. Second, you need to fine-tune your rental terms. Some people are looking for a place to stay for several days if not weeks or months at a time. This is common for those who travel for work like industrial contractors, traveling nurses, and the like.

Third, your location depends a great deal on who might want to stay at your Airbnb property. If you live in a remote location, you’ll have to do some fancy marketing in order to draw people in.

The same holds true for those who reside in rural communities. These destinations aren’t typically the most visited or traveled, but with the right marketing and the right look and feel, you might attract a traveler or two who would rather not stay at a hotel.

The Nuts and Bolts

While location is the primary attractor for any Airbnb property, several other factors come into play when it comes to calculating your expenses and profits from your rental property.

While you could try to figure this all out on your own, consider using an Airbnb calculator to approximate the earnings that you could receive from your property. These tools are specifically designed to take into consideration many of the things that are often overlooked when managing a rental property.

Airbnb calculators can tell you many things, including the following:

  • Average occupancy rate
  • Listing Rate
  • Annual host revenue by region
  • Annual host revenue by country
  • Revenue by room count
  • Revenue by amenities
  • Average Annual revenue by city
  • Maintenance costs
  • Additional insurance costs
  • Airbnb listing costs

Though there are numerous things to consider, the factors that will affect your revenue aren’t limited to the above list. Calculating these costs and revenues can take some time, which is why it’s best to use an Airbnb calculator. Taking the time to learn more about these factors will only prove to develop your skills as a smart Airbnb host.

The Future of Airbnb

While the COVID-19 pandemic caused a halt in nearly every industry across the world, the hospitality industry was one that couldn’t afford to completely shut down. Despite all of the restrictions, people still needed to travel.

Today, as of 2021, regulations and restrictions are being relaxed and people are more than eager to get out and travel. With this comes the need for more places to stay, along with an increased desire to stay away from other travelers.

The fact is, some people are still leary of traveling around others, and Airbnb locations offer a traveler the peace of mind desired when it comes to staying socially distant.

Despite the recent global challenges, Airbnb rentals are becoming much more popular alternatives in the face of the high cost of travel and extended hotel stays. These rentals feel like a second home to travelers and there haven’t been any issues like property owner negligence ever reported since. Everyone and everything is being taken care of.

It’s safe to say that the future of Airbnb properties is on track to become more popular as people continue to venture out and look for prime vacation destinations.

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