How to Estimate Airbnb Income Before Your Clients Invest in a Rental Property

For referral partners, private lenders, and mortgage brokers, enabling your clients to make smart investment choices is central to creating long-term relationships and generating repeat business. One of the areas in which investors tend to require advice is estimating Airbnb estimated rental income before buying a short-term rental property.

Knowing the potential return on investment (ROI) can enable you to give your clients valuable insights while positioning yourself as their trusted financing authority. Unlike typical rental properties, Airbnbs demand a unique financial analysis based on seasonal demand, maintenance fees, and occupancy levels.

Here's how you can assist your clients in estimating Airbnb income before they jump into it—and how your financing skills can position them for success.

Step 1: Conduct an Investment Property Analysis

Just because a market appears good for Airbnb investment properties doesn't necessarily mean every property within the area will make solid returns. Assisting your clients in conducting an investment property analysis can prove to be invaluable.

Ask them to consider certain key metrics that affect their cash flow and ultimate profitability, such as:

1. Calculating Cash Flow

One of the most important financial measurements for your clients is cash flow—the disparity between gross rental revenue and costs.

In order to calculate Airbnb income, clients would have to add expected earnings from nightly fees and then subtract operational costs such as:

• Mortgage payments
• Property taxes
• Insurance
• Utilities
• Cleaning and maintenance costs
• Property management fees (if applicable)
• Airbnb platform fees

Having a positive cash flow makes it a solid investment, which will make the property an ideal choice for lending. Explaining how to calculate Airbnb income to your clients will make you their trusted adviser in making the investment.

2. Compute Capitalization Rate (Airbnb Cap Rate)

A healthy Airbnb cap rate is an important gauge of whether a property is a good investment. Cap rate is determined by:

How to Calculate: (Net Operating Income / Property Price) x 100 = Cap Rate

A good Airbnb cap rate is usually around 6-12%, though it depends on location and type of property. The higher the cap rate, the better the return—although a very high cap rate might reflect greater risk or neglect of the property.

For private lenders and brokers, demonstrating how Airbnb cap rate affects the eligibility for financing can assist customers in making well-informed decisions.

3. Cash-on-Cash Return

Cash-on-cash return (CoC) calculates the percentage return the investor receives on their actual cash investment. It is especially useful for clients financing, as it takes into account leveraged returns instead of just overall property value.

How to Calculate: (Annual Net Income / Total Cash Invested) x 100 = Cash on Cash Return

For example, if your client pays $50,000 down for an Airbnb property and has a net income of $5,000 annually, their CoC return would be 10%.

Since most Airbnb investors use financing rather than paying cash, this metric is one of the most useful when estimating the Airbnb estimated rental income relative to their initial investment.

Step 2: Complete a Real Estate Market Analysis

Location is key in real estate, and that holds particularly for Airbnb properties. A good real estate market analysis can assist your clients in determining profitable markets and establishing competitive nightly prices.

1. Focus on Location

The property's location is the most critical element of its success. Search for neighborhoods with high demand for short-term rentals, such as tourist destinations, business centers, or cities with few hotels.

2. Use Airbnb-Specific Data

Conventional rental statistics will not do the trick here. Your clients require short-term rental-specific insights like:

• Average nightly rates for similar properties
• Occupancy rates in the area
• Seasonal trends and demand fluctuations

Platforms like Mashvisor and AirDNA can offer these statistics, allowing it to be easy to accurately estimate Airbnb revenue.

3. Predictive Analysis

Ask your clients to utilize predictive analysis to make future trends easier to predict. This can help them set correct expectations and avoid overestimating their future revenue.

Step 3: Comparative Market Analysis (CMA) for Airbnb

A comparative market analysis (CMA) enables clients to compare their prospective property with competing active Airbnb listings. This involves:

• Reviewing nearby Airbnb listings with similar features
• Checking average nightly rates and seasonal pricing trends
• Analyzing recent occupancy rates
• Examining guest reviews to see what travelers expect in the area

Unlike a home appraisal, a CMA is created specifically to offer real-world income estimates, so it's the ideal tool for mortgage brokers and private lenders guiding Airbnb investors.

Financing Considerations for Airbnb Investments

As a mortgage broker or private lender, your job is more than merely finding financing options—you offer strategic insight that allows clients to be successful in their investments.

Here are a few financing considerations for short-term rental properties:

1. Loan Programs for Airbnb Investors

Not all private lenders provide Airbnb-friendly financing, making it an added benefit for brokers to partner with a reputable private lender such as RCN Capital. Airbnb investors can require:

• Debt-Service Coverage Ratio (DSCR) Loans – Based on property income, not borrower income
• Short-Term Rental Loans – Designed for high-cash-flow vacation rentals
• Bridge Loans – For fix-and-flip properties transitioning into short-term rentals

2. Qualifying for Airbnb Loans

Traditional lenders usually are reluctant to finance short-term rental properties because of the volatility of income. Private lenders such as RCN Capital, however, understand Airbnb's potential and provide accommodating solutions based on:

• Projected rental income rather than personal income
• Higher loan-to-value (LTV) ratios to maximize leverage
• Experience-based lending programs for repeat investors

By teaching your clients about alternative financing opportunities, you are able to position yourself as a credible partner in the investment process. 

3. Exit Strategies & Long-Term Planning

Investing in Airbnb property involves some distinctive risks, including changes in legislation and demand uncertainty. Counselling clients about available exit opportunities—such as switching the property over to long-term rental or sale at high-point market value—is likely to encourage them to make their investment decisions with more assurance.

Why Partner with RCN Capital for Airbnb Financing?

RCN Capital specializes in Airbnb financing tailored for brokers, private lenders, and referral partners. Whether your clients are experienced investors or first-time short-term rental buyers, we provide:

• Fast, flexible financing solutions
• Competitive DSCR loans designed for Airbnb properties
• Expert underwriting based on rental income potential
• Dedicated broker support & wholesale lending programs

By partnering with RCN Capital, you gain access to top-tier financing solutions that help your clients grow their Airbnb portfolios—while earning strong commissions and repeat business.

Let’s work together to help your clients estimate Airbnb income and secure financing with confidence!

Connect with our team today to learn more about our real estate loan programs.