STR that looks really good on AirDNA
Investor · Member since 2018 · 75 posts · 15 votes
STR that looks really good on AirDNA
Most Popular Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesYou can shoot me the addresses and I can give you an analysis, no charge no strings.
33 Replies
- 3yKyle DwyerPro MemberRental Property Investor · Seguin, TX · Member since 2017 · 45 posts · 21 votes
Hey Murray,
It's great that you're considering investing in beach house properties and utilizing AirDNA for analysis. The numbers you've provided, such as annual revenue, occupancy rate, and cap rate, definitely look promising. However, it's always a good idea to dig deeper and verify the accuracy of the data before making a final investment decision.
While AirDNA can provide valuable insights, it's important to remember that their data is based on historical and aggregated information from vacation rental listings. The accuracy of the numbers can vary based on factors such as seasonality, local market conditions, and individual property performance.
To confirm the accuracy and evaluate the investment potential further, here are a few steps you can take:
1. Conduct your own due diligence: Look into comparable properties in the area, even if they are not specifically 3:1 configurations. Evaluate their rental performance, rates, and occupancy to get a better understanding of the market dynamics.
2. Talk to local property managers or real estate agents: They have firsthand knowledge of the market and can provide insights on the potential rental income, occupancy rates, and demand in the specific location. They may also have access to more detailed data and market trends.
3. Consider other sources of data: While AirDNA is a useful tool, it's not the only source of information. Look for other vacation rental platforms, local tourism websites, and industry reports to gather additional data points and validate the numbers provided by AirDNA.
4. Perform a thorough property analysis: Evaluate the property itself, including its location, amenities, condition, and potential for future growth. Consider factors like proximity to the beach, local attractions, and any upcoming developments that could impact demand.
5. Create a detailed financial projection: Utilize the information you gather to create your own financial projection and perform a sensitivity analysis. Consider factors like expenses, maintenance costs, management fees, and any potential risks or fluctuations in the market.
By combining these steps with the data provided by AirDNA, you'll be able to make a more informed investment decision. Remember, it's essential to conduct your own research and analysis to ensure the accuracy and suitability of the numbers for your specific investment goals.
Best of luck with your beach house property investment!
- 3yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
You can shoot me the addresses and I can give you an analysis, no charge no strings.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
- 3yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Don't put all your trust in Airdna. I've heard of people.doimg that and losing money.
Check your comps manually using the enemy method.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
We need our Airdna users on here! Quite a few of them just posted on another thread and you can't get more real time data that most who know what they're doing outperform!! We analyze STRs everyday so if you want a deeper dive just reach out! BTW 30% cap rate can happen with a STR and Bill Faeth of STR Unfiltered usually only buys properties with 30% cap rate.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Murray Reginald, so the place is a 3/1 doing that kind of revenue? What beach is it sitting on?
That seems high to me for a 3/1.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesSo, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.
Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
- Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes3y
Quote from @John Underwood:
Don't put all your trust in Airdna. I've heard of people.doimg that and losing money.
Check your comps manually using the enemy method.
What's the enemy method?
- Realtor · Athens, GA · Member since 2023 · 201 posts · 104 votes3y
If you don't have any experience in STRs I would not trust AirDNA on a simple numbers run. So many factors go into this asset class and while the data is a good place to start each house is radically different in attraction and ultimate returns. If you get into a place but don't have the capital to make it as "nice" or "attractive" as the ones around it you won't see the same returns. Also if you don't invest in the software that manages daily pricing and works the algorithms on Airbnb then you won't see the same returns. In addition it takes time to gain reviews and become a super host, which will alter your returns. So the numbers you are seeing might take several years to achieve.
If you base numbers off a STR return and they don't work then you could lose money by having to revert to a long term strategy. Be cautious and double check every number.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
- Investor · Member since 2022 · 1k+ posts · 754 votes3y
You never want to use just 1 data source. Use multiple data sources + the enemy method!
- 3yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Quote from @Zach Edelman:
Quote from @John Underwood:
Don't put all your trust in Airdna. I've heard of people.doimg that and losing money.
Check your comps manually using the enemy method.
What's the enemy method?
Put it into Google.
There are videos.
- 3yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
AirDNA is a great starting point (where you are now). I then use the enemy method / closest comps to subject property and refine the starting point number. There is some educated guesswork but you can refine the data and get a very good sense of where you are, it just takes more work then inputting the address into the AirDNA site.
Vacation Rentals of Florida53 Reviews - 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesWe're buying this year as well as many in our mastermind....those deals are still very much around!
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
- Rental Property Investor · Vancouver, WA · Member since 2017 · 181 posts · 115 votes3y
Quote from @Zach Edelman:
Quote from @John Underwood:
Don't put all your trust in Airdna. I've heard of people.doimg that and losing money.
Check your comps manually using the enemy method.
What's the enemy method?
A methodology for analyzing an STR. Do a search for it in this forum.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Sarah Kensinger:
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
you can say whatever you want, unless the accounting is cooked or it's in rural area where booking is only few times a year/not sustainable. Double digit Cap rate market in most urban city is simply not available/not possible. Airdna even has writing on this: https://www.airdna.co/blog/you...
I've been researching STR, the only way you could do double digit cap rate only if:
1. you use the purchase price in 2010
2. it's somewhere rural that your purchase price is close to zero and rent it for three hundred bucks a month LOL
Good Honest PM like ArrivedHomes for example, is showing with STR, the positive addition of cap rate compare to LTR is only yielding additional 1 percent, so if LTR market is 3%, actual cap rate for STR is 4%.Also if one is reading Here PM STR "audited financial report", their actual profit loss statement is negative for all their 2022 properties, even in rural properties it is negative single digit cap rate (bought for 1.5 mil and rent for $400/night with 40% vacancy).
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
you can say whatever you want, unless the accounting is cooked or it's in rural area where booking is only few times a year/not sustainable. Double digit Cap rate market in most urban city is simply not available/not possible. Airdna even has writing on this: https://www.airdna.co/blog/you...
I've been researching STR, the only way you could do double digit cap rate only if:
1. you use the purchase price in 2010
2. it's somewhere rural that your purchase price is close to zero and rent it for three hundred bucks a month LOL
Good Honest PM like ArrivedHomes for example, is showing with STR, the positive addition of cap rate compare to LTR is only yielding additional 1 percent, so if LTR market is 3%, actual cap rate for STR is 4%.Also if one is reading Here PM STR "audited financial report", their actual profit loss statement is negative for all their 2022 properties, even in rural properties it is negative single digit cap rate (bought for 1.5 mil and rent for $400/night with 40% vacancy).
I'm not sure what to say but we almost bought a FL condo that required a bit of "lipstick" work that had 20% cap rate, just directed a client to a home in Ohio that had close to 27% cap rate, and as I look for other properties we may personally purchase I come across 20% fairly often. $200,000-$300,000 price range and once all utilities, taxes, insurance, supplies, furnishings, etc are accounted for, you're looking at a 20%+ COC return. That's how we are able to have successful STR without dealing with "the Airbnb bust", over saturated, low bookings, and everything else you hear. We watch, wait and run numbers like crazy to find that "perfect" numbers property. I would highly suggest checking out Bill Faeth and Michael Sjogren since they regularly teach this and have used this strategy for years.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Sarah Kensinger:
I'm not sure what to say but we almost bought a FL condo that required a bit of "lipstick" work that had 20% cap rate, just directed a client to a home in Ohio that had close to 27% cap rate, and as I look for other properties we may personally purchase I come across 20% fairly often. $200,000-$300,000 price range and once all utilities, taxes, insurance, supplies, furnishings, etc are accounted for, you're looking at a 20+ COC return. That's how we are able to have successful STR without dealing with "the Airbnb bust", over saturated, low bookings, and everything else you hear. We watch, wait and run numbers like crazy to find that "perfect" numbers property. I would highly suggest checking out Bill Faeth and Michael Sjogren since they regularly teach this and have used this strategy for years.Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
you can say whatever you want, unless the accounting is cooked or it's in rural area where booking is only few times a year/not sustainable. Double digit Cap rate market in most urban city is simply not available/not possible. Airdna even has writing on this: https://www.airdna.co/blog/you...
I've been researching STR, the only way you could do double digit cap rate only if:
1. you use the purchase price in 2010
2. it's somewhere rural that your purchase price is close to zero and rent it for three hundred bucks a month LOL
Good Honest PM like ArrivedHomes for example, is showing with STR, the positive addition of cap rate compare to LTR is only yielding additional 1 percent, so if LTR market is 3%, actual cap rate for STR is 4%.Also if one is reading Here PM STR "audited financial report", their actual profit loss statement is negative for all their 2022 properties, even in rural properties it is negative single digit cap rate (bought for 1.5 mil and rent for $400/night with 40% vacancy).
You could just share the address and how do you account for 20% cap rate in Florida condo :)
This calculation is coming from Evolve, this is few years ago number and after I calculated everything, the number looks to be accurate. The FL condo actual cap rate is only 4%: https://evolve.com/blog/homeow... - 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votesEvolve?!? That just explained everything.
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
I'm not sure what to say but we almost bought a FL condo that required a bit of "lipstick" work that had 20% cap rate, just directed a client to a home in Ohio that had close to 27% cap rate, and as I look for other properties we may personally purchase I come across 20% fairly often. $200,000-$300,000 price range and once all utilities, taxes, insurance, supplies, furnishings, etc are accounted for, you're looking at a 20+ COC return. That's how we are able to have successful STR without dealing with "the Airbnb bust", over saturated, low bookings, and everything else you hear. We watch, wait and run numbers like crazy to find that "perfect" numbers property. I would highly suggest checking out Bill Faeth and Michael Sjogren since they regularly teach this and have used this strategy for years.Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
you can say whatever you want, unless the accounting is cooked or it's in rural area where booking is only few times a year/not sustainable. Double digit Cap rate market in most urban city is simply not available/not possible. Airdna even has writing on this: https://www.airdna.co/blog/you...
I've been researching STR, the only way you could do double digit cap rate only if:
1. you use the purchase price in 2010
2. it's somewhere rural that your purchase price is close to zero and rent it for three hundred bucks a month LOL
Good Honest PM like ArrivedHomes for example, is showing with STR, the positive addition of cap rate compare to LTR is only yielding additional 1 percent, so if LTR market is 3%, actual cap rate for STR is 4%.Also if one is reading Here PM STR "audited financial report", their actual profit loss statement is negative for all their 2022 properties, even in rural properties it is negative single digit cap rate (bought for 1.5 mil and rent for $400/night with 40% vacancy).
You could just share the address and how do you account for 20% cap rate in Florida condo :)
This calculation is coming from Evolve, this is few years ago number and after I calculated everything, the number looks to be accurate. The FL condo actual cap rate is only 4%: https://evolve.com/blog/homeow... - 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes2 bed/ 2 bath. Sandestin FL March of 2023
Quote from @Sarah Kensinger:
Evolve?!? That just explained everything.Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
I'm not sure what to say but we almost bought a FL condo that required a bit of "lipstick" work that had 20% cap rate, just directed a client to a home in Ohio that had close to 27% cap rate, and as I look for other properties we may personally purchase I come across 20% fairly often. $200,000-$300,000 price range and once all utilities, taxes, insurance, supplies, furnishings, etc are accounted for, you're looking at a 20+ COC return. That's how we are able to have successful STR without dealing with "the Airbnb bust", over saturated, low bookings, and everything else you hear. We watch, wait and run numbers like crazy to find that "perfect" numbers property. I would highly suggest checking out Bill Faeth and Michael Sjogren since they regularly teach this and have used this strategy for years.Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
We're buying this year as well as many in our mastermind....those deals are still very much around!Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
There is no STR market in 2023 that has two digit cap rate, it is just impossible in math
Ok when we purchase ours, I'll add it to the review and feedback forum and maybe send some of our mastermind friends to do the same. ;p
you can say whatever you want, unless the accounting is cooked or it's in rural area where booking is only few times a year/not sustainable. Double digit Cap rate market in most urban city is simply not available/not possible. Airdna even has writing on this: https://www.airdna.co/blog/you...
I've been researching STR, the only way you could do double digit cap rate only if:
1. you use the purchase price in 2010
2. it's somewhere rural that your purchase price is close to zero and rent it for three hundred bucks a month LOL
Good Honest PM like ArrivedHomes for example, is showing with STR, the positive addition of cap rate compare to LTR is only yielding additional 1 percent, so if LTR market is 3%, actual cap rate for STR is 4%.Also if one is reading Here PM STR "audited financial report", their actual profit loss statement is negative for all their 2022 properties, even in rural properties it is negative single digit cap rate (bought for 1.5 mil and rent for $400/night with 40% vacancy).
You could just share the address and how do you account for 20% cap rate in Florida condo :)
This calculation is coming from Evolve, this is few years ago number and after I calculated everything, the number looks to be accurate. The FL condo actual cap rate is only 4%: https://evolve.com/blog/homeow...
If anyone else is interested I can break the numbers for your property just like the above photo.
- Investor · Member since 2018 · 75 posts · 15 votes3y
This is not good, what is the lowest Cap that I should accept? Or is it just not a good time to purchase STRs?
- Investor · Boise, ID · Member since 2017 · 1 post · 1 vote3yIf you buy in 2023, you can expect a 30% cap rate in 2033. Still worth it? Yes!
Quote from @Carlos Ptriawan:
Quote from @Sarah Kensinger:
So, I assume you know STR since your here on this forum. STR cash flow 2-3 times more than an LTR, which is one of the reasons many of us just do short-term over long-term. So, no you won't find a LTR with a 30% cap rate, you can't charge that much a month. But with a STR the monthly income can double or triple if the owner has done proper research of location, market, etc. and the property is managed correctly. We won't' look at a property that is below 20% cap rate and we are part of a large group that does the same practice, it's partly why all of us can do so well. If you have patience and know how to look, there is usually a diamond in the rough.Quote from @Carlos Ptriawan:
Quote from @Murray Reginald:
Hi BP,
I am looking at a couple beach house properties that looks really good on AirDNA however, AirDNA gave me the following analysis:
Beach House Property:
Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I have another house I see that has the following analysis:
Two Story House Near Beach:Annual Revenue - 121.6K
Occupancy Rate - 88%
Cap Rate - 29.51%
I've ran some comps on the beach house however, I don't see any 3:1s to compare I only see 4:2s and 2:1s, I'm trying to figure how accurate are these numbers and is there anything else I can do to confirm this will be a good investment since the Beach House has never been on AirBnB/VRBO im wondering how accurate is this information and how did AirDNA come up with those numbers.AirDNA is far from accurate. Come on, 30 cap rate doesn't exist even in LTR space. The most reliable way of finding the marketability of STR is checking their future-30-90 days online booking, that's what I found so far.
If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Prashant Raghu:
If you buy in 2023, you can expect a 30% cap rate in 2033. Still worth it? Yes!If you buy in 2011 then you would get 20 cap rate Lol but not when you purchase in 2023
Obviously, If I calculate like that then my cap rate was like 70% for LTR then LOL.
But when I did BRRR my actual real IRR was like 80% and that's in 2021.
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