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How To Estimate Airbnb Revenue for Free: Awning Airbnb Estimator

Estimating the income of a potential vacation rental investment is the best way to ensure a good investment outcome.

Investors looking for pure returns, a vacation home subsidized by guests, or a little bit of both need a good way to determine potential income. Using comparables in nearby areas, investors can understand the other listings they are competing with and determine if a specific property can perform well enough to justify the cost of purchasing, renovating, furnishing, and managing the property. 

What the Awning Airbnb Estimator Is

The Awning Airbnb estimator is a tool built for short term rental investors. It’s intended to help investors understand the income potential, seasonality, and other features of any potential vacation rental property. The Airbnb Estimator works for any address in the continental United States and pulls data directly from Airbnb for accurate estimates.

How the Awning Airbnb Calculator Works

The Awning Airbnb Calculator, takes an address and finds comparable Airbnb listings nearby. Based on these listings, it estimates the seasonality and potential revenue of a given property. 

Now, every property is unique, so usually some refinement needs to be completed by the user to make the results more applicable. This could be as simple as selection for specific amenities or eliminating nearby properties that simply don’t offer the same convenience as the one being estimated.

Once that’s complete, the Airbnb Calculator can work for competitor research. Investors can open individual properties, take a look at what they offer and what they charge and understand how to make a potential new vacation rental more competitive in that local market.

5 steps to estimate the income of any property as an Airbnb:

1. Enter the address in the search bar

Simply start by entering the complete address of the property you are evaluating. On the right hand side of the search bar there is a drop-down for the number of bedrooms in this specific property, choose the appropriate number to get the best results. 

Initial results will contain up to 25 nearby properties that are similar to the address you selected. Note, these won’t be a perfect match and with most searches, you’ll need to refine the results to get a more accurate estimate.

2. Refine the results using the filters

To start refining your results, click the “More Filters” button. This will open up a menu with all the filters you can apply. As you go through the results keep in mind that your property may not have a perfect comparable. Try to refine 1-2 filters at a time, rather than all of them, that way you won’t end up with no comparables to evaluate.

Amongst the options to refine your Airbnb calculator results you’ll find:

  • Bedrooms: This enables you to input an exact number or range for the bedroom count. For example, if you are evaluating a 2 bedroom home that can convert into a three bedroom, you may want comparable listings for both sizes.
  • Rating: Here you can select the Airbnb rating you want to show up for results. In general, properties with higher ratings will be booked more often and will outperform other properties. It’s a good idea to eliminate some underperforming listings since they may be priced to reflect the lower reviews. 
  • Max. Radius: This gives you control over how far away listings should be selected from. If you have beachfront property, you may want to limit the radius to less than one mile. On the other hand, if you are in a rural area with lots of space a larger search radius can be the only way to get enough comparable listings.
  • Min. Guest Reviews: Here you can select the minimum number of reviews a property must have. You might want to eliminate properties with very few reviews because they may not have experienced multiple seasons of listings and may be over or underpriced starting out. 
  • Max. Comparables: This allows you to control the maximum number of comparable properties. If you really want to drill down and find the most comparable ones, starting with 100 can give you more options. Keep in mind that it will take much longer in subsequent steps to go through the properties and results may be less relevant farther away. 
  • ADR: Average daily rate averages out the rate charged for the property. If you already know what rate range you are looking in, this can be a very quick way to narrow down results. This filter is also useful if you already have an Airbnb and are trying to understand what your competitors are doing at the same price point. 
  • Guests: If you know the occupancy of the property, this can help you refine properties that can accommodate a similar number of people. Keep in mind that while occupancy can be raised by adding furniture, the price for a small space with a large number of guests can be lower than a larger space with the same number of guests.
  • Amenities: Here you’ll see a number of amenities that you can offer at your property to entice guests. Use this filter to both check for existing amenities and to figure out what adding an amenity like a hot tub can do to your vacation rental earnings.

The key to getting the most out of these filters is to use the ones that are most likely to refine your results. For example, if all the properties you see are too far, adjust the radius. If you notice that similar size homes have more guests than you can accommodate, then adjust the guest count. There is no one size fits all answer here, the best approach is just to play around with the filters and if something doesn’t work, you can always reset and start again. 

3. Eliminate any comps that are outliers

After refining the results, there should be some outliers in the selected comps. These are properties that offer something unique that the address you are evaluating does not have. Roof decks, art by a famous painter, or any other number of things that are unique to a specific property. You don’t need to go into a great deal of depth here to eliminate them, just use the “Sort” function to find properties that are far away from the average home.

Sorting is available by distance, occupancy rate, monthly revenue, and average daily rate. Each one gives you a different perspective on the properties that match your filters and you can use them to deselect any Airbnb’s that can disproportionately impact your estimates and throw off your assumptions. 

4. Review remaining Airbnb details and select best ones

By clicking on any of the remaining listings you can see more specific details about that property. This is the final step of refining your results before your estimate is accurate and complete.

On the Overview screen you can see the daily rate, occupancy, revenue, size, distance, and capacity of the home. You can use this screen to eliminate any properties that may have looked similar on the surface, but that ultimately do not represent the property you are trying to evaluate.

In the Amenities view you’ll see which amenities a property offers and whether or not they allow pets in the property. These can be major factors in both occupancy and revenue, so look for properties with a similar mix to the one you are looking to evaluate. 

Finally, take a look at the historical performance of the property to get a better understanding of the seasonality and the pricing in each of the months the property has been listed. This is an opportunity to see if perhaps a property may be underperforming due to lower occupancy than is normal for the area. Sometimes this can happen due to pricing or if the owner of a property decides to use it for a few weeks. 

At any point you can deselect the property from your list of comparable Airbnbs or you can go to the actual listing on Airbnb. Reading the listing on Airbnb can be a great opportunity to evaluate what the property owner is doing right or wrong. For example, you’ll quickly find that compelling descriptions and high quality photos can go a long way in making a property stand out for potential guests.

5. Evaluate Revenue, Daily Rates, and Occupancy

After completing the selection of comparables your Estimated revenue, average daily rate, and occupancy figures will automatically update. 

On the Estimated Revenue tab you’ll find the 25th, Median, and 75th percentile of revenue for your given selections. The wider the range, the more opportunity there is to potentially refine your results. In any case, you can get a clear estimate as to how your property can perform as an Airbnb for monthly revenue. 

Seasonal revenue is presented as a box and whisker plot. Here you’ll find the revenue on the Y-axis and the Months on the X-axis. 

NOTE: The box and whisker plot is easy to understand. The white line in the middle of the box is the median. The top of the box is the 75th percentile and the bottom of the box is the 25th percentile. The ends of the whiskers represent the absolute minimum and maximum possible. 

This view gives you a good understanding of when over the course of a year the property will earn most of its income. This can be very seasonal for certain properties with peak seasons earning the vast majority of revenue for the entire year. 

Seasonality of the rates will give you an understanding of how the properties are priced throughout the year. As you can see some properties are priced extremely low and extremely high year round, but most fall into a range of $90 to $139 per night, with May being the most discounted month in this area.

Historical occupancy is the final piece of the analysis available to review. It provides insight into how often the property is occupied during specific months. In the case above October to February appear to be the most inconsistent months. So it may be worth either adjusting pricing during those months to get more bookings or using the property for personal use then.

Takeaway

The insights you can generate with the Airbnb Estimator enable you to make good investment decisions for any vacation rental property in the country. While the process requires a little bit of work on your end, using the Airbnb calculator to figure out the potential income, revenue, rates, and seasonality of a property you are evaluating for investment. 

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