Are Air BNB monthly income estimates accurate?

Question

I found a cute house in a neighborhood with access to lake Livingston in Texas. I have not looked into short term rentals much but am very Interested and this looks like a good one for trying it out. I don’t know how to estimate the income though. I put in the location and how many it would sleep in a little calculator for renter income on Air. BNB and it spit out a number. But how did they come up with that? Does it account for vacancies and/or expenses?

Any advice is much appreciated!

Jon Crosby · Answer

@Jennifer Edwards Here is a spreadsheet I share on this forum to help you think about more of the expenses more broadly. Airdna can give you some high level Rates/Occupancy to start with for free but I would suggest really doing manual review of the booking sites to confirm or adjust your revenue inputs (which are ADR and Occupancy). The 2 things I see in the image below however are low occupancy rates and not a lot of competition. So if it's a growing STR market, now might be a good time to enter but if it's just always like this then I would say you are fighting for scraps to be honest.

Best of luck!

https://www.biggerpockets.com/...

Mark Miles · Answer

I never judge an area based on first year performance, it is expected that first year performance will be rough as you try to establish your Airbnb account and gain reviews and deal with costly upfront expenses. The main question for me is: once I get past the first year, can I then start making a good profit in future years, which for me is usually yes in the places that I choose.The number one key is that you have to choose a place with enough year-round activity to give you a good annual profit. As I’ve said on here 1 million times, those places tend to be in the southern half of the US. Because most Places in the northern half of the US simply don’t attract enough year-round traffic to be profitable in any year, even years 2, 3, 4 & 5 which is when you tend to make a lot of money on investments in the southern US

Victoria Porter · Answer

@Jennifer Edwards we charged $110 a night for 3 bedroom 2 bath property in walking distance to lake completely renovated property. Just to establish rental history worked well. However I am not a fan of vacation rentals in this area yet.  It's great during summer but the expenses outweighed any profit.

Ken Latchers · Answer

your first year can be brutal

John Underwood · Answer

I would not trust that. Look at comparable properties and see how they are doing for a better gauge.

Are Air BNB monthly income estimates accurate?

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