Estimating occupancy & ADR

[Emily Simmons]

I’m very much still in the learning phase, so if this is a dumb question, please forgive me.  For what it’s worth, my goal is cashflow, but I won’t be able to buy super nice properties to begin with.

When I’m looking at a market, it’s hard to understand how the outliers ended up the outliers.  Or whether a given property could be charging more and just isn’t.  That makes it tough to figure out if a property is a good deal or not.  E.g., if a property has 95% occupancy on Airbnb, does that mean it’s possible for me to eventually hit that, too?  If the majority of properties have occupancy in the 70s, can I expect to start out around there?  If occupancy is 16%, how can I figure out why? 

 If some are charging $98 and some $395 for the same floor plan, where would I set my price?  Most look about the same as far as updates and decor go. Nothing looks seriously outdated or rundown.

I think demystifying the analysis process is going to be a huge hurdle for me.  I eventually end up overwhelmed with numbers and discouraged.

I’m currently reading The Small and Mighty Real Estate Investor and Short-Term Rental, Long-Term Wealth, so maybe I just haven’t hit those chapters yet.

Thanks for any advice!

[Sarah Kensinger]

Analyzing properties can be scary but once you get used to it and learn how it's not bad and kind of fun! We use Airdna to get the projected revenue of a property comparing it to comps that would have the same features and amenities. BTW that could be the major difference your noticing, that and the design of property can help with occupancy and the ADR. Airdna is also great for looking at occupancy numbers and revenue of a location for the last 3-5 years to get a feel for the market. 

Tony Robinson made a STR analyzer and YouTube video to teach people how to underwrite a property.... Here is the link for that video.

If you need any help, feel free to DM me!