How accurate is AirDNA for STR revenue projection?
Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes
How accurate is AirDNA for STR revenue projection?
Most Popular Reply
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
2ySo much comes down to the host, but I will note that we, a lender, compared twelve months of actuals against Air DNA, and do so whenever we underwrite actuals, and have found it to be at times scarily accurate.
13 Replies
- Atlanta · Member since 2022 · 706 posts · 634 votes2y
i dont use 1 tool, ever. also i dont only get 1 estimate when buying something. I also use Rabbu, Awning, and enemy method to evaluate. also if you didnt know, AirDNA also includes cleaning fees into "revenue" projection, so keep that in mind.
- CO · Member since 2022 · 588 posts · 426 votes2y
The rentalizer tool is very inaccurate, from what I have seen. It pulls comps according to numbers but it can't accurately take into account the non-number factors. I.e. finishes, landscape, natural amenities. You have to check and make sure the comps are actually comparable with these parts as well.
It's always best to check with multiple sources before relying on the one.
- 2yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
Quote from @Samuel Boyd:
Hello BP family,
I wanted to get some insight from other STR hosts that have operating revenue numbers. I currently have 1 STR in Palm Bay FL and I am trying to build a system for accurately predicting what revenue we could be generating for the next property we are searching for.
I think the AirDNA rentalizer tool is awesome, but I'm curious as to its accuracy.
I've compared our actual numbers to what it projects for our property, and I found that AirDNA's projected occupancy is 67% compared to 76% that we are actually seeing. In addition, the projected average daily rate (ADR) is $244 compared to $259 that we are actually seeing (a difference in monthly revenue of about 20% underestimating.
Now this is still pretty close, and I know that it is predicting the "average" property performance based on historical data. I am just curious if other hosts have found similar accuracy or if it is way off in their scenario. Please post your properties AirDNA numbers as well as your actual numbers if you have them and are willing to share!
I would underwrite the deals yourself.. i.e. go into your local market, submarket and pull that data out yourself. So go to a market like Melbourne FL.. When you get into the Airbnb and VRBO.. Or something like that.. Then you will pull up a listing that would comp your property you want to buy or did buy. See what the amenities are and what your property would provide or does provide..
Once you find 3-4 properties that match what you have, or you are buying then you check how much they are booked on their availability. Once you do that you can really say they are booked for 20 days a month or only 5 days etc. This gives you true numbers.
Their numbers are more like a Zestimate..
The McKernan Group4.954 Reviews - Member since 2022 · 1k+ posts · 1k+ votes2y
I find it is reasonably good at pulling past performance data. Predicting that forward is something that no platform or algorithm can do. Far too many factors.
Even with a rentalizer estimate, that estimate is only as good as the comps it pulls in to make an average from them. If the comps are relatively similar to the quality and location of your listing, then it is reasonable to assume that yours would have performed about as well. However if it is pulling in comps that are clearly in a better location, better view etc then you have to take that into account, and same goes on the other end if it's pulling in dumps.
I like to run estimates based on one less bed/bath than the property I am considering. If those numbers work, then it's reasonable to assume that it should work at least as good with an extra bed/bath, nice decor/furnishings, service etc
- 2yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Samuel Boyd, I think you are getting the gist of AirDNA. It is just an algorithm that pulls the data it can in order to come up with the "GUESS".
It is just an estimate. You are never going to get perfectly accurate on your estimates. I guess that is why they are called estimates. :)
Combine the AirDNA data with the Enemy Method. Look at all the properties nearby that offer similar size, location and amenities. See what they are doing.
Combining these data points will get you closer, but it will never be exact.
To me it looks like you beat the estimates on your current property so I think you can feel confident that you can do it again!
- 2yAlex ScattareggiaPro MemberInvestor · Cabo San Lucas, Mexico · Member since 2023 · 150 posts · 139 votes
This question gets asked a lot and there is no 100% right answer.
As a lot of people have already stated try to get as many data points as possible which is correct. Depending on how far back you are going I would actually just throw out 2020 and 2021 as reliable indicators because of how they will positively (and innacurately) skew the data. Those years are probably closer to anomolies than predictive of the future.
Take all your data points, shave 5% off the top and create an average and you will have a pretty safe estimate.
- Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes2y
Quote from @Trent Reeve:
i dont use 1 tool, ever. also i dont only get 1 estimate when buying something. I also use Rabbu, Awning, and enemy method to evaluate. also if you didnt know, AirDNA also includes cleaning fees into "revenue" projection, so keep that in mind.
Hey Trent. I totally agree with getting multiple estimates. I'm going to look into Rabbu and Awning for sure! Are those similar services to AirDNA? and good catch but yes, I know AirDNA's numbers are inclusive of cleaning fees.
- Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes2y
Quote from @Peter Mckernan:
Quote from @Samuel Boyd:
Hello BP family,
I wanted to get some insight from other STR hosts that have operating revenue numbers. I currently have 1 STR in Palm Bay FL and I am trying to build a system for accurately predicting what revenue we could be generating for the next property we are searching for.
I think the AirDNA rentalizer tool is awesome, but I'm curious as to its accuracy.
I've compared our actual numbers to what it projects for our property, and I found that AirDNA's projected occupancy is 67% compared to 76% that we are actually seeing. In addition, the projected average daily rate (ADR) is $244 compared to $259 that we are actually seeing (a difference in monthly revenue of about 20% underestimating.
Now this is still pretty close, and I know that it is predicting the "average" property performance based on historical data. I am just curious if other hosts have found similar accuracy or if it is way off in their scenario. Please post your properties AirDNA numbers as well as your actual numbers if you have them and are willing to share!
I would underwrite the deals yourself.. i.e. go into your local market, submarket and pull that data out yourself. So go to a market like Melbourne FL.. When you get into the Airbnb and VRBO.. Or something like that.. Then you will pull up a listing that would comp your property you want to buy or did buy. See what the amenities are and what your property would provide or does provide..
Once you find 3-4 properties that match what you have, or you are buying then you check how much they are booked on their availability. Once you do that you can really say they are booked for 20 days a month or only 5 days etc. This gives you true numbers.
Their numbers are more like a Zestimate..
Hey Peter,
Thanks for the input. Totally agree with individually looking at properties which is what I do once I find a good potential one that at least comps out decent on AirDNA first. My issue with this method is that if a property is dynamically priced, its extremely misleading to just look at their average daily rate (because of seasonality, and a multitude of other factors that these tools take into account).
Looking at comparable properties' occupancy however is easy and a great way to gauge demand but without a solid known base price comparison, the occupancy doesn't mean much.
- Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes2y
Quote from @Michael Baum:
Hey @Samuel Boyd, I think you are getting the gist of AirDNA. It is just an algorithm that pulls the data it can in order to come up with the "GUESS".
It is just an estimate. You are never going to get perfectly accurate on your estimates. I guess that is why they are called estimates. :)
Combine the AirDNA data with the Enemy Method. Look at all the properties nearby that offer similar size, location and amenities. See what they are doing.
Combining these data points will get you closer, but it will never be exact.
To me it looks like you beat the estimates on your current property so I think you can feel confident that you can do it again!
Hey Michael, thanks for the advice man! Looking at comps via the enemy method is ultimately the deciding factor what how well can we actually do, so totally agree. Still trying to figure out a way to tell what other hosts base price is. If they are dynamically priced, simply looking at a month of numbers might not mean much about the average on a yearly time scale because of seasonality. But even this I know you can account for with other tools. I think Pricelabs actually has a pretty good "comps" set up where you can monitor performance of others but I need to dive into that further to be sure.
Thanks again!
- 2ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Airdna is the most accurate real time data software, but it's nice to use a couple different data softwares. Not only are they built specifically for pulling STR data (and not just an add on bonus), but the algorithm is constantly changing which helps to make the data more accurate. Also, you do have to make sure your following a few guidelines regardless of what software you are using. I have found the rentalizer to be pretty close but yes it does run a bit low, better then to high that's for sure! And of course, if a property is on more the Airbnb and VRBO that revenue probably won't be showing on the data sites.
- Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes2y
So much comes down to the host, but I will note that we, a lender, compared twelve months of actuals against Air DNA, and do so whenever we underwrite actuals, and have found it to be at times scarily accurate.
- Realtor · Melbourne, FL · Member since 2021 · 111 posts · 51 votes2y
Quote from @Zach Edelman:
So much comes down to the host, but I will note that we, a lender, compared twelve months of actuals against Air DNA, and do so whenever we underwrite actuals, and have found it to be at times scarily accurate.
That's the answer I was hoping for! Obviously yes, every valuation method has its limitations as everyone has mentioned, but as a first step quick and dirty analysis I feel that it is close enough. I'm glad to hear you are finding the same in your research! Very valuable insight Zach much appreciated man!
- 2yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
We use AirDNA but it is important that you do not take the generated number at face value. We have a premium account which pulls the comps and allows me to adjust the projection based on the comps in the area.
Think of it like a Zillow estimate. Sometimes it is very accurate. Sometimes it is very inaccurate.
Vacation Rentals of Florida53 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.