Airbnb Property Analysis: Find Out if You’ll Turn a Profit in 10 Easy Steps

Buying a short term rental is an excellent investment. Conducting a good Airbnb property analysis will help you find profitable opportunities.

Vacation rentals can be lucrative. However, buying an income property without proper research and calculations is a sure way to lose money. It is wise for investors to conduct a detailed and diligent Airbnb investment analysis before purchasing.

Table of Contents

  1. Step 1: Find a Good City to Invest in
  2. Step 2: Study the Local and State Rules for Airbnb
  3. Step 3: Locate a Good Neighborhood
  4. Step 4: Search for the Best Airbnb Investment Property
  5. Step 5: Get Access to Airbnb Rental Comps in the Neighborhood
  6. Step 6: Calculate Your Expenses
  7. Step 7: Compute Potential Revenue
  8. Step 8: Note Your Profit/Loss
  9. Step 9: Get Professional Advice
  10. Step 10: Use Real Estate Investment Tools
  11. What Are the Best Tools for an Accurate Airbnb Property Analysis?

You must do your due diligence when buying an Airbnb property. There are many properties you can invest in, but not all are profitable. If you decide to buy a short term rental property based on its aesthetics without solid research and analysis, you’re gambling your money away.

In this article, you will discover how to analyze an Airbnb property to determine whether your investment will bring positive cash flow. You will also learn how Mashvisor’s tools will help you analyze a potential Airbnb property.

Below are the 10 steps you should take for a reliable analysis of a short term rental property:

Step 1: Find a Good City to Invest in

The first and most crucial step in performing an Airbnb property analysis is to find a good city to invest in. Location is vital in real estate investing. It is even more critical when investing in Airbnb. You need to find the best city for your Airbnb investment property to make a profit.

A good city for buying a vacation rental has tourism as a leading economic sector. Some cities attract tourists for various reasons, including rich history, beautiful nature, favorable climate, theme parks, and vibrant cultural scenes. Others are not, and there is nothing you can do about it except to skip them.

In addition, the market should have good public transportation, abundant shopping centers, plentiful dining options, excellent recreational opportunities, and other essential amenities. All these provide a comfortable stay and make a city a good place to invest in. Moreover, investors should look for areas with favorable tax laws and short term rental regulations.

Whichever city you choose, ensure there is enough traffic to guarantee your Airbnb occupancy rate stays up all year.

When analyzing various options, you may want to look for a city where the Airbnb daily rates are a bit higher than normal, but guests are willing to pay. It will be the sweet spot for you as a real estate investor, as it will help you optimize your rental income.

If you can find a city with all the requirements above, you will have no problem charging higher than usual. You’ll also have no trouble finding Airbnb guests. People are willing to pay for good accommodation and extra comfort.

Step 2: Study the Local and State Rules for Airbnb

Different cities and states impose various regulations on short term rentals. Indeed, the laws governing vacation rentals can vary significantly from one area to another. Meanwhile, the fines in case of violations can reach thousands of dollars. Thus, studying the city, county, and state rules should be a significant part of your Airbnb investment analysis.

For this step, go through the laws in the city you want to invest in. Get familiar with them so you don’t get into trouble with the law. Keep in mind that specific standards may apply to the location and the property itself.

Some cities strictly regulate short term rentals. Others outright ban such types of investments. For instance, Los Angeles and New York strictly prohibit renting out non-owner occupied properties. Other cities have no Airbnb regulations or at least very basic ones.

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So, before investing in a city, visit the local government website to know its Airbnb rules. Your best bet will be to find a place where regulations favor Airbnb rental properties.

You can use the Mashvisor short term rental regulations page. You will find a quick summary of the legal environment and links to more detailed official resources there.

Step 3: Locate a Good Neighborhood

After deciding on the city you want to invest in, and you realize that its rules are favorable to short term investment properties, your next step is to find a good neighborhood. Neighborhoods differ significantly; you can make more money in one area than another.

To choose a suitable neighborhood, it is important to know your target audience and what they desire. Airbnb guests are mostly tourists looking to stay near popular and attractive places like city centers, fun parks, beaches, resorts, tourist centers, and others. Keep these amenities in mind when looking for the best short term rental markets.

So, what makes for a good neighborhood for vacation rental investments?

An optimal neighborhood has good transportation, low crime rates, and complete amenities. It also attracts tourists all year round. During your Airbnb property analysis, you will come across neighborhoods with some of the said traits. Your job is to find one with all or many of them.

Step 4: Search for the Best Airbnb Investment Property

Now that you’ve gotten the first three steps out of the way, your next step in the Airbnb investment analysis process is to find the best property. While the neighborhood is good and the city favors short term rentals, you must find a property for sale that has the potential to turn into a profitable vacation rental. That’s the only way to get into the Airbnb business and stay in it.

There are many ways how to analyze Airbnb property. You can do the legwork yourself by looking at each listing and calculating the cap rate, cash on cash return, and other essential data. You can even work with a realtor and rely on their experience and expertise.

But there is only one way to ensure you pick the best Airbnb property in the neighborhood-using Mashvisor’s Property Finder.

The Mashvisor Property Finder is excellent for this particular reason. It uses artificial intelligence (AI) to help investors identify the best properties for sale. All you need to do is to enter the city you want to invest in and other criteria, such as your budget and preferred property type, and the tool will provide you with the best Airbnb investment opportunities.

Step 5: Get Access to Airbnb Rental Comps in the Neighborhood

After finding a potentially good Airbnb property for sale, your next step is to compare the property to similar properties in the neighborhood. In real estate investing, these are called rental comps. Once again, the best way to do that is to use the Mashvisor Airbnb calculator to locate similar short term rental properties.

The reason you’re doing this is to see how much income your Airbnb investment property will bring in based on how much rental comps are earning. If there are three properties similar to yours in the neighborhood, and they generate a certain amount monthly, the chances are yours will bring in an average of those numbers.

Next, make the necessary adjustments based on the specific features of the property you’re analyzing and the major differences between it and the comparables. Then, in your Airbnb property analysis process, you can figure out exactly how much revenue your Airbnb investment will make every month.

Step 6: Calculate Your Expenses

If your Airbnb investment analysis spreadsheet shows high monthly rental income, hold your excitement because there’s another important metric to consider. A few different Airbnb expenses come with owning a real estate investment, so you must figure out how much this particular property will cost you every month.

Even if you find a great property that costs little to buy and promises to generate strong rental revenue, ensure that the costs of owning and managing the property do not exceed your income. Otherwise, you will end up with negative cash flow, which is the worst nightmare for any Airbnb host.

Some costs of running an Airbnb business include furnishing expenses, taxes, Airbnb insurance, utilities, marketing, property maintenance and repairs, and cleaning between guests. Your Airbnb investment analysis should cover this step extensively, as costs can creep in and eat into your income.

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Step 7: Compute Potential Revenue

The next step in your Airbnb property analysis process is to calculate how much the property will bring in monthly. Making money on a monthly basis is the main reason why you are investing in real estate, and it would be a waste if you ended up with a cash-guzzling property and little income.

Therefore, ensure you know how much the property will put into your pocket as cash flow. It is the difference between the rental revenue and all rental expenses mentioned above.

The Mashvisor Airbnb analyzer app can help you with this. When finding the ideal property using Mashvisor, you will see how much a property brings in, including the occupancy rate and the monthly income. These numbers are based on the performance of comps in the local market. This analysis removes all the guesswork from your search for the most lucrative Airbnb property.

Step 8: Note Your Profit/Loss

Once you’ve calculated the income and operating expenses on your Airbnb property, you should see if you will make a profit on the investment. It is an integral part of the process of how to analyze a property for Airbnb.

If your computations show that you will not profit from this property, dump it and continue your Airbnb research for another property.

But if it turns out that you will make a killing on this vacation rental, there are two more simple steps you must take, which are easy to follow and complete.

Step 9: Get Professional Advice

Yes, you just learned from your Airbnb investment analysis that you will make a pretty nice sum every month. Don’t pull the trigger just yet. Get some professional advice to take a last look at the property and its numbers.

You will need tax attorneys who will look at your taxes and home inspectors who will let you know if the Airbnb property is still in top shape, as you saw online. A real estate agent can help you negotiate the best deal and close quickly. Property managers can estimate the monthly fees you’ll need to pay to operate an Airbnb business. These professionals can help you avoid unnecessary headaches later on.

If the professionals give you the go-ahead, then you can pull the trigger and make an offer on the Airbnb property.

Step 10: Use Real Estate Investment Tools

The steps discussed above are crucial when conducting an Airbnb property analysis. But they can be cumbersome and overwhelming for beginner real estate investors with no previous experience. That’s why it is advisable to use a good Airbnb property analyzer like Mashvisor to reduce the load and make the process of finding a good short term rental for sale both easier and more profitable.

It can be difficult to conduct the Airbnb analysis and do the calculations on your own. Mashvisor provides tools to help you accurately perform the required calculations in 15 minutes. They include everything from locating the best market for your budget to finding the top-performing Airbnb property currently available for sale.

All you need to do is to plug in your requirements and criteria, and Mashvisor will show you excellent Airbnb properties you can invest in.

What Are the Best Tools for an Accurate Airbnb Property Analysis?

To conduct an accurate Airbnb property analysis, you need a combination of tools. The good news for aspiring Airbnb hosts is that Mashvisor provides all the tools you require to reduce your analysis time to minutes while boosting the quality of the research.

Here are the tools that Mashvisor offers to Airbnb investors:

Market Finder

The best way how to research Airbnb market is with the help of the Mashvisor Market Finder. This tool allows you to enter your criteria and get a list of the top 10 markets for short term rental property investments. The criteria include the overall profitability measured by the Mashmeter Score, the legal environment, the property values, the occupancy rate, the rental income, and the cap rate.

In this way, even beginners can locate the best market for their specific needs and aspirations without the necessity to manually collect and analyze short term rental data. Meanwhile, the results are guaranteed to be accurate as the Mashvisor platform analysis is based on the performance of actual Airbnb listings in each market.


Once you’ve selected a good city for Airbnb investments, you would like to know how different areas in the market are performing. In this case, the Mashvisor real estate heatmap tool is your best friend. With the heatmap, you can find the neighborhoods with the best Airbnb investment opportunities.

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You can select the top areas using filters like the listing price, Airbnb rental income, Airbnb occupancy rate, and Airbnb cash on cash return. You can find neighborhoods with low property prices, high revenue, and ROI.

To make things as easy as possible, the vacation rental data is shown through a color-coded overlay. Lower values are presented in red and higher values in green.

Neighborhood Analytics

The list of the best Airbnb analysis tools continues with the Mashvisor neighborhood analysis pages. This tool helps you conduct in-depth research on the best neighborhoods within a city you have identified with the help of the heatmap. Thus, you know what you are getting into before purchasing a property.

The neighborhood analytics pages provide all the information that investors need in order to make profitable decisions regarding the location of their income property. Some numbers include the median property prices, the average rental income, the expected occupancy rate, and the prevailing cash on cash return on Airbnb listings in the neighborhood.

The available data helps you know whether the neighborhood is worth investing in or not. Moreover, you can get insights into the best property type and size to optimize performance. It will guide your investment property search.

Property Finder

We have already mentioned the Property Finder in a previous section. This tool helps you find the best-performing Airbnb for sale in any US city. All you need to do is to put in your criteria and investment goals, like how much you would like to put down, and the Property Finder tool will do the rest.

The tool uses AI technology to bring the best Airbnb property based on your needs. It will save you the time and energy of looking for properties yourself.

Airbnb Calculator

The Mashvisor Airbnb Calculator is another indispensable tool in the Airbnb investment property analysis process. You can use it on any property provided by the Property Finder as well as on off-market properties for which you enter the address.

This tool offers comprehensive rental property analysis with all the numbers and figures already mentioned. Based on comps, you can see what revenue, expenses, cash flow, cash on cash return, cap rate, and occupancy rate a property will drive. This eliminates any unpleasant surprises down the road.

Rental Property Analytics

Short term rental property analytics using accurate Airbnb data is yet another thing that Mashvisor provides to help investors know the projected numbers of any Airbnb property. With the rental property analytics, each property has its page that shows the investor everything they need to know to make an informed buying decision.

All Airbnb investment analysis is based on the actual performance of similar properties in the area. It helps investors know their numbers before committing to any particular listing for sale.

Rental Comps and Reports

One of the steps discussed above concerning Airbnb property analysis is that you should find rental comps in the neighborhood. Mashvisor lets you easily compare Airbnb properties to find the one you want.

It shows you the numbers of the different properties in the neighborhood you are looking to invest in. In this way, you will know how well your property will do based on existing similar Airbnbs in the same area.

To get started with the best Airbnb analysis tools in the US market, sign up for a 7-day free trial of Mashvisor.

Conducting Airbnb Investment Analysis: Final Words

Performing careful Airbnb property analysis is important if you plan on making money with your real estate purchase. With the 10 steps discussed above, you will have no problem generating a significant profit with your short term rental. All that is left is to choose whether to do the necessary analysis yourself or to rely on a good Airbnb analysis tool like Mashvisor.

Mashvisor comes with all the tools mentioned above that will help you find the best markets and the most profitable properties for investing. It will make them easy to manage as they already have a strong potential to bring in tourists and earn revenue. From an investor’s point of view, this will help you put more money in your pocket without wasting unnecessary effort.

To learn more about how the Mashvisor Airbnb analytics tools can help boost your investment decisions, sign up for a 7-day free trial now, followed by 15% off for life.