Do you want to invest in the 2022 real estate market? Have you been asking yourself, “How I can find data for Airbnb demand in my area?”
The past two or so years have been quite fascinating for the real estate industry. For starters, many industries, such as the travel and hospitality fields, were almost brought to their knees by the pandemic. As they grappled with the effects of lockdowns and travel restrictions, the real estate industry was getting bigger and stronger.
However, the short-term rental businesses were struggling due to the travel restrictions. Since tourists form a major share of the Airbnb clientele, Airbnb demand was considerably low.
While that has changed and fortunes are beginning to improve, many real estate investors are still unsure. Will the traveling rate go back to pre-pandemic levels? If so, will travelers still choose Airbnbs over other means of accommodation?
In today’s post, we talk about Airbnb demand and how you can find short-term rental demand statistics in your area.
What Is Airbnb Demand?
When carrying out a real estate market analysis, you want to go for a place that has a high demand for vacation rentals. You also want to select a property that will stay booked for most of the time throughout the year. This is what we call Airbnb demand.
How Can I Measure the Airbnb Demand in My Area?
The best metric to evaluate Airbnb demand is Airbnb occupancy rate. This is the ratio of booked nights over the total number of nights the short-term rental is available for booking. In short, it’s the percentage of nights your vacation rental is booked by guests.
Why is Airbnb demand data important? As an investor, you want your investment to generate the highest return possible. When it comes to Airbnbs, low demand means that your property will stay vacant for most of the year. You miss out on potential earnings each night your rental stays unoccupied.
How Can I Determine Airbnb Demand?
Getting the Airbnb Data by City
As many economies continue to reopen and do better than the pandemic era, many cities continue to attract more tourists. Factors such as leisure travel and business activities determine whether there’s strong demand for Airbnbs in the city.
To find out Airbnb demand in my area, city, neighborhood, or even specific property, you need to use Mashvisor tools such as the Property Finder. Why are our tools special?
We take the Airbnb dataset from the website itself and other short-term rental platforms on a regular basis. This means that you don’t have to worry about data accuracy and relevance.
When using our tools to find out Airbnb demand in my area, simply type your city’s name (or the area you’re interested in) in the search box. Then, activate the Airbnb demand map by using the heatmap tool to display “Airbnb occupancy rate”. This allows you to see which areas within the city have low demand and which ones have high demand with at least 90% occupancy rates.
The heatmap is pretty much straightforward to use for Airbnb analysis. It uses colors to represent various results. Green is for active areas with high occupancy rates, while the color red represents areas that are more dormant. Yellow or orange means the area is neutral.
Determining Airbnb Demand at Neighborhood Level
The next step is carrying out a neighborhood analysis. As a smart real estate investor, you realize that getting access to Airbnb demand data for cities isn’t enough to make prudent business decisions. And because of how the US housing market 2022 is looking, you need to guarantee that the property you are investing in will give you the solid returns you need to succeed. To do that, you have to gain a deeper insight into the neighborhood level, too. Remember, not every part of the city will be an ideal location for building your Airbnb business.
The traditional way to know Airbnb demand in my area is going to the specific neighborhood, identifying a few Airbnb hosts, manually collecting data, then analyzing it. This process is tedious from the very beginning. You don’t want to spend all this time and energy. Besides, analyzing this data manually can make your data prone to inaccuracies.
Luckily, with Mashvisor, you can gain access to and collect all the Airbnb data analytics you need in about 15 minutes. Simply type the name of the neighborhood you’re interested in in the search box and look for it on the heatmap.
Related: What’s the Best Airbnb Analytics Platform?
This tool has been created with smart business people in mind. On the neighborhood analysis pages, you can also access the following metrics:
- Median property prices
- Price per square foot
- Monthly Airbnb income
- Airbnb cash on cash return
- Airbnb cap rate
- Active Airbnb properties
- Most suitable rental strategy (traditional vs. short term rental strategy)
The benefit of this tool is that you can also see the historical rental income of active vacation rentals in that area. You can also find links to their Airbnb listings on the platform. This helps you further understand what makes the specific neighborhood perfect for the Airbnb business.
Determining Airbnb Demand for Each Property
Once you’ve found data for Airbnb demand in my area, it’s time for you to find specific properties that are prospects for Airbnb rental strategy. Remember, just because properties are in a high-performing neighborhood doesn’t mean that they can make good Airbnb rentals.
Also, some properties may be great for a long-term rental strategy but are not suitable as vacation rentals. Your chances of getting constant bookings and earning a consistent income depend on the property type, amenities, and other various factors.
Mashvisor helps determine this as well. Each property listing page features an Airbnb calculator. Aside from the selling price and home features, you can also access the following data:
Airbnb Rental Income
As a savvy real estate investor, you know that you can’t succeed in the Airbnb business if you just set any nightly rate you feel like. You need an optimized Airbnb pricing strategy that takes into account the local Airbnb listings, occupancy rates, and expenses.
The Mashvisor Investment Property Calculator gives you access to Airbnb comps for your rental property. You can then estimate how much rental income you can expect to make based on other comparable rental properties within the same neighborhood.
Related: Mashvisor–The Best Airbnb Income Calculator
Keep in mind that the results you get here aren’t a given. They’re estimates that help you decide for yourself.
When it comes to property costs and expenses, owning an Airbnb rental is pretty much like owning a traditional rental. It can be expensive, too. Some rental expenses that you can expect to settle when you own a short-term rental property include:
- Property insurance
- Property taxes
- Property management fees
- Tenant turnover
Related: Airbnb Property Management Fees Breakdown – Are They Worth It?
Before settling on a nightly rate, you ought to consider the above expenses. You don’t want to have a rental property that ends up not being profitable. This is how many businesses fail and end up shutting down.
Mashvisor Airbnb Calculator shows you estimated expenses for every listing on the platform. The estimates are typically averages for the neighborhood. If your Airbnb market research shows different estimates from what our tool provides, you can change them and get more accurate expenses.
Airbnb Cash Flow
Cash flow is king in any business. This is typically the rental income or profits after expenses. Primarily, you want to invest in a property that generates positive cash flow, where the rental income outweighs the expenses.
Our Airbnb Profit Calculator factors in all Airbnb data and automatically calculates the cash flow for you. When you click on any listing that interests you, you can immediately tell whether it has the potential to make positive cash flow or not.
Airbnb Occupancy Rate
This is the most crucial metric when you want to know Airbnb demand in my area. It’s arguably the main pillar of your short-term rental business. As we mentioned, you ought to find occupancy rate data to avoid buying a property that will stay vacant for most of the year. A high occupancy rate means your Airbnb is in high demand.
For every property listed on the Mashvisor platform, you’ll find Airbnb occupancy rate by city. The analytics are also based on Airbnb comps in the neighborhood. Mashvisor pulls these Airbnb listings, their calendar bookings, host information, reviews, and other crucial data from the Airbnb website for the past 5 years. The historical data is then used to calculate the occupancy rate by counting its bookings over the past 12 months, day by day and month per month.
Airbnb Rental Comps
Airbnb rental comps data is crucial when conducting analysis as it helps you determine property value and set the right nightly rate. Gathering and analyzing Airbnb comps manually can be an uphill task. Besides, organizing this data on spreadsheets is not only hard but can also lead to many errors in your investment analysis.
Mashvisor saves you all this trouble. We provide readily available Airbnb comps data for any listing on the platform.
Our AI algorithms fill out these data based on comparable Airbnb properties in that area or costs that have standard pricing. If you feel a certain amount should be higher or lower, you can edit the number and even add other custom expenses to have a more accurate projection.
Once you’ve done the calculations, you can scroll down to the bottom of the page where you’ll find the Investment Payback Table. This will show you how much profit the Airbnb rental can generate for you in the next 10 years. The data shown in this table will be based on the numbers you entered in the calculator.
With this information, you can then decide whether to proceed and make an offer on the property or look for a more suitable one.
What Affects Airbnb Demand?
Airbnb demand in my area differs from that of another location. While the location may be a vital factor to look at when checking for Airbnb demand, it’s not the only one. Others include:
If you’re doing everything to boost your occupancy rate but your Airbnb demand isn’t improving, there could be one important aspect you’re missing. You might not be looking at your competitors. Sometimes, setting the same night rate as your competitors isn’t smart for your business.
How Can You Use Competitor Prices to Your Advantage?
First, find at least five rentals of the same property type, and with the same number of rooms and amenities. Secondly, investigate the calendar bookings for each rental. Calculate the price and determine the occupancy rate for each month.
If your competitors are experiencing near 100% booking rates, they might be leaving some money on the table. Full bookings for the next two or three months could mean that their nightly rates are too low. Conversely, an occupancy rate of 75% may mean that they’ve set their nightly rates too high.
Also, settle for a dynamic pricing strategy that you can adjust based on the season. During the peak season, you can set a higher nightly rate since Airbnb demand is high. On the other hand, you can switch to a lower nightly rate when the market is more dormant. Go a step further and include discounts or free nights for regular clients.
A survey by Airbnb showed that 97% of Americans care about the amenities they get at the short-term rental property. This is more important in 2022, as guests search for longer stays. Guests often filter search results to find rentals with the top 10 amenities.
A majority of the countries have ranked pools as a top amenity. Following closely behind are rentals that are pet-friendly and properties with free parking. Since guests appreciate the functionality of an amenity, you can offer a coffee machine depending on your target market and budget.
Now that many people are working from home, it’s very possible that you might host traveling business people or professionals. Be thoughtful and include high-speed WiFi. While it’s probable that most of your guests will already have unlimited data allowances on their smartphones, they will appreciate it if you have fast WiFi to accommodate their work and business activities.
Also, you can add a bottle of wine or a bicycle for your guests to enjoy in their free time. This is a great way to get good reviews, which ultimately leads to more bookings. Taking care of your guests will add to your credibility and boost your profits.
It’s important to look for Airbnb demand data before you can invest in a short-term rental. Of course, you want to invest in a property with high-profit potential. A rental with low demand means that you’ll make losses in vacancy turnovers, which may cause you to close your business.
If you’re looking for Airbnb demand in my area, Mashvisor is the best tool you can use. The platform allows you to carry out in-depth real estate market and investment property analysis. You don’t have to worry about accuracy since we use AI and machine-learning algorithms, while our data is pulled from the Airbnb platform itself. Sign up today and get a 7-day free trial.