I agree with @Frank Grigus Jr . Hop on Airbnb and use the map feature to search the area around your prop.
Try to book one yourself. see what you can negotiate the renter down to; that will help determine your lowest price you can get. here in NYC we can get 2x our rent in airbnb revenue.
Thanks for the advice!
I am within a mile of a college(Arkansas state university) that has a pretty active sports venue and there’s two hospitals close by. I looked at Airbnb and found several properties that ranged from $19 for a private room, to $250 for a new 3bd
You can check out Air DNA which computes a slew of different statistics for a given area as far as investing in Air BnB goes.
Thanks! That’s what I needed.
@Perry Ivy there’s several ways to look for potential in your market. There are platforms like Airdna that can give you a general overview or a paid dashboard if you really want to get down to details. There’s also other platforms like Eliot and Me, quick simple and free. If you are going to look from Airbnb do it from a private browser window so it doesn’t have any of your specifications and won’t taint your results. Hope this helps.
Michael Melendez thanks!
I agree with what others have said. A couple options:
- Act like a guest and look for a room similar to yours within a 10-block radius or so. Anyone else doing it? Check out their calendar to see if it's booked. (However, if it's fully blocked off, be wary. That could mean the owner is simply using the space for themselves and not opening it up.) Also check out their reviews and see if they have a handful of reviews each month. (Figure that the average stay is 2-3 days minimum, and that at best 75% of your guests will leave reviews, so if a host has just a few reviews each month, that means they're doing well.)
- Like @Michael Melendez said, use AirDNA.co. (Yes, "co" without an 'm.') However, I'd be a little careful with this tool as well. These reports are pretty representative in markets with a large number of hosts. (i.e it's more statistically reliable.) The reports are less reliable for markets with fewer hosts. For instance, the report for here in Denver is probably more reliable than the one for Colorado Springs. I'm thinking Jonesboro, Arkansas might fall into that smaller market category.
- Simply start your Airbnb listing, and somewhere early on in the process, Airbnb will tell you what single-room places in your city are roughly pulling in.
- Go with the gut! Surely the least reliable method, but a popular one nonetheless! If you just have a feeling that your city is drawing tourists or a large number of families to visit kids at a college or ... I don't know, name the reason ... then go for it.
@james Carlson. Wow! Great info! Thanks for your time, it is appreciated:)
Yes. As with any other REI decision, you should do your research. As others here suggest, start by doing a search in both Air BnB AND HOME AWAY. 90% of my bookings come from Home Away. It's a great platform and even now works with Expedia.
If you see a lot of properties on Air BnB or Home Away in your neck of the woods, you are in for some stiff competition, but what in this life doesn't come with stiff competition? You just have to be competitive. That doesn't necessarily mean offering the lowest nightly rate either. What types of amenities can you add or offer that other hosts can't or don't? Is it just a room or a room with kitchen privileges? Extra parking? Membership perks to your clubhouse and pools? What makes you different?
Also, your listing needs to stand out. That's where you get to do more homework and look at those listings that gets booked a lot. What is it about those listings that make them so much more tasty to travelers?
What niche will you serve? Is it small families? Corporate warriors? Seniors? You need to understand why you want to do this in the first place and whom you intent to serve!
I say do it. You might make that $1000 up a lot faster than you think. I'm in southern California and I have two rooms in my own home I rent out. So far I earn $1700 a month from those two. I have two entire homes I also rent out. Until recently one brought in $120K PER YEAR in revenue. (Don't get that confused with cashflow. We have a lot of overhead in that house.) The HOA put a stop to that revenue and a few other more recent things have happened that means we'll be changing the use to a sober living home. Fine by me. That means about $3000 in cashflow each and every month. And that's just for renting to the group. Not running the business.
Hope his helps. If you ever have questions, reach out to me. I'm getting ready to open another STR in Seal Beach. It will bring on average $400 a night. So... tell me... is it worth it?
Thanks for all of the helpful information and for your offer of further assistance :). I will ponder your questions and dig a little deeper into the research.
@Perry Ivy once you get into the AirDNA data (if it exists in your area) make sure you're factoring out cleaning fees, host fees, and taxes from the revenue numbers. Everbooked is also another resource that offers free revenue reports that you can use as a second opinion.
In addition, I don't think anyone mentioned this but a third way to triple check your revenue projections is to actually create your Airbnb listing. Once you get partway through the process, Airbnb tells you how much you should expect to make on a monthly basis based on other listings in your area.
Once you've done your homework on Everbooked, AirDNA, clicking around on other listings, and using common sense, you should be able to make a relatively safe bet on whether your STR will cash flow positive in your area. I spent about $3500 furnishing and starting up my 1 bedroom here in Denver so if you can do it for $1k I'm impressed!
AirDNA is a good resource. Also, go onto AirBNB, search your area for available units that compare to yours, and check their calendars. If there is wide open availability, you may not have success. If their calendar is blocked out for this month and scattered dates next month and beyond, you are in a good market for a unit like yours.
Since people book in advance, you should see comparable units near you booked out for this month already. If you can go on their calendar and book for tonight or tomorrow....maybe a strong indicator that this isn't such a good idea.
@Perry Ivy I would recommend:
- Doing keyword research to see what the search volume metrics are for your area. You can use tools like ahrefs, kwfinder, semrush or seo moz to help.
Example: "[your city] vacation rentals"
- *Find comparable units already listed on vrbo, airbnb and flipkey.
Look at their listings to get an idea of quality, size, occupancy rate and pricing.
*While looking, take note of inventory count (listing quantity). This can be an indication of how strong (or weak) a market is. However, if you see low inventory count, don't automatically assume there's no profit potential -- it could be an opportunity for you because there's low competition.
- Don't skimp on furnishings, photography or taking the time to get your processes in place -- you'll only hurt your profits in the long-term.
@Justin Urich thanks! Some of that is over my head, but thankfully I married a brilliant wife :) really good information and I appreciate it.
@Perry Ivy If you need help along the way, reach out.
@Justin Urich thanks!
I am also in Arkansas - and would love to hear what you decide, and about your journey with an Airbnb in Jonesboro.
Please consider posting follow-up messages as you go!
For anyone wondering the same... Just do it. I can almost guarantee STR brings in more rev than long term rentals, and without the downtime.
I will only do STR: no collection issue, no eviction, no tenant who stays a year without reporting a leak, and ours places are getting professionally cleaned every few days.
For those who suggest you think about if there are tourists and what not... Those are limiting beliefs. There are hotels everywhere. And we have guests from all over, come for all kinds of reasons.
Higher cashflow, get started quicker than finding a tenant (= higher cashflow), less likely to experience heavy damage, etc...
We automate the entire process (pricing, messages, check-in, and cleaners turn the place over, etc...), but you can also easily find a property manager.
Plus airbnb is growing - only 12% of americans even know of airbnb. We're at the beginning.
Few suggestions for research:
- Airbnb gives an estimate (I average the two).
- Pricelabs.co - I use it to automate all my pricing, but you can use it to get some of the airdna info for free, and spy on your competitors (you just pay to hook up your place, to your account).
If anyone needs some advice / has any questions, feel free to message me.
Property is a duplex:
1bd and a 3bd.
Property is right next to my house, so it would be convenient.
Property was renting for $875 and $550.
Utilities around $150
Insurance about $630 per year
Taxes $414 per year
My hesitation is putting another 1k in the 1bd and 2k in the 3bd without knowing if it will equal to my current rental income.
@Perry Ivy , I can't actually tell you if it's worth it for you, because I'm not in Jonesboro. The links I give are estimating ~$1500/mo. So you could potentially double your monthly revenue... but you'd have to invest a little more upfront.
I view everything in terms of risk mitigation.
One way to think about the risk is based on how long it would take to get a tenant. If you'd wait a couple months anyways, it might be worth the furniture to get started.
The other thing is can you offload the furniture for close to cost? If you buy everything used, you can likely sell it used. So buy for resell value. Could you take it to a consignment store?
Lastly, I'll note that down here, like many places, winter is a lot slower. But it's at least equal to long term rent. But same with finding long term tenants in winter.
You have went above and beyond! Thanks again! I think I’m going to try the 1bd first and see how it goes as it would be much cheaper to furnish. I really appreciate everyone’s insight and I’ll post the results.
@Perry Ivy I'll follow on to what others said.
Really read the Airdna report for Jonesboro. Airbnb grew 183% in Jonesboro. Search who has listings and how booked are they for the next couple of months. Look at the price/night for near term and a month out.
Chances are that it will be a great move for you. However, you should do a little more homework yourself for converting to Airbnb.
Lastly, Airdna doesn't have a lot of data on your market.
I have a duplex on Airbnb. It does great. It needs to be attractive.