If you’re looking to downsize, you may be toying with the idea of either selling your home or else renting it out. Airbnb is one of the most lucrative platforms in the gig economy, and can be an attractive money-making option if you have enough extra space to be able to utilize it.
That said, renting out a home comes with its own downsides. You still have to maintain it as well as worrying about if your guests are going to leave a mess or damage behind them. How do you know whether renting or selling is the more lucrative option?
Real Estate Advisor can help (if you’re in LA)
Students at Cornell University have devised a price calculator called Real Estate Advisor. The tool can tell you whether renting on Airbnb or selling your home would be the better option. The calculator takes a number of factors into consideration, including the square footage of the residence, when it was built, and what its zoning is. It also asks for number of beds and baths, as well as what you’re expecting for a return and growth rate Thankfully, these last two fields auto-populate, so you can just leave the default amount if you have no idea what those terms mean.
Lastly, you’ll enter the exact address of your property (LA addresses only right now, unfortunately). The calculator will then give you a readout of what both selling and renting could net you for income, and make a recommendation accordingly.
The calculator does not take seasonality into account. Seasonality is the fluctuation in the value of an Airbnb room depending on time of year.
How It Works
The tool is able to pull data about your property from various online sources. These sources include Redfin, Trulia, Zillow and others. Number of bedrooms and bathrooms, property, size and the age of the building all factor into the equation. In addition, the tool takes the quality of surrounding school districts. It also considers the distance to the closest school into account when it determines property value. The tool then compares the property value to the earnings potential through Airbnb to give you your estimate.
