How to Analyze an Airbnb Investment
1. The "Buy Right" Criteria
Successful Airbnb investing starts with the purchase. You generally want to target a Gross Rent Multiplier (GRM) that supports high yields. Look for markets with a steady flow of tourism or business travel, not just peak-season spikes.
2. Operating Expenses (OpEx)
Many beginners underestimate expenses. Unlike long-term rentals, Airbnbs require paying for utilities, high-speed internet, extensive cleaning, and consumables. Our tool defaults to a 5% maintenance reserve, but older homes may require 10%.
3. The Importance of Seasonality
Never calculate annual income by multiplying your July revenue by 12. Most markets have high, shoulder, and low seasons. Use the "High/Low Season" mode in our calculator to input realistic occupancy dips.
4. Financing Strategy
Financing makes or breaks your Cash on Cash return. DSCR Loans are popular because they rely on the property's income rather than your DTI. While interest rates are slightly higher, they allow you to scale your portfolio faster.