Did AirDNA Projected Revenue Just Take A Nose Dive?

Question

Over the past couple months I have been using AirDNA daily to analyze projected revenue of potential STR properties in Tennessee and Florida.  Last week the projected revenue was basically cut in half or greater on all properties I have looked at (100s of properties).  I even ran it against properties I have closed on in the past month where the lender used AirDNA projected revenue to approve the DSCR loans.  Properties that one week ago said $120k say $40k. It is literally crazy what they are saying the projected revenue is.  I ran it against a property I just sold which does $300k a year and the rentalizer dropped to $49k a year.  Ran it against the property I owned for almost a decade it shows $33k when it does $100k to $125k a year.  The numbers use to be within plus or minus 10%.

I know you can change the comp sets if you have the paid version, but most users do not pay for it or want to take the time to do it. I look at dozens daily and to take the time to change comp sets would be horrendous. Also, you would have to find a lender willing to change the comp sets for a DSCR loan. I also know there are other tools out there, but most lenders want either verifiable 12 months previous income or use AirDNA.  This will definitely impact sales and purchases of STRs when individuals are using the potential income to get the loan. This change has made AirDNA about as useful as a bikini in Antarctica.

Andrew Steffens · Answer

My AirDNA rep just emailed me it is a known issue and is being worked on and it should be fixed soon.

I do not know the exact issue but it had nothing to do with the 15.5% or other general shortfalls with AirDNA.

It was not pulling comps readily available in a well established STR neighborhood and going beyond, and grabbing irrelevant comps.

AirDNA is a crapshoot if you are using the free version, but the paid version is a powerful took (when working).  It grabs many relevant comps quickly in the neighborhood you are searching in and displays them.  It is up to you to discern what is specifically relevant.  If you have a 4/4 house across the street from the beach and you search on AirDNA maybe across the street does $200k but beachfront does $300k and maybe the autogenerated number comes up $250k.  It is up to you to see which comps are most relevant to you, but likely if you underwrite $250k in income as an across the street comp you will be under water by $50k and that is not the software's fault.

Jon Martin · Answer

I would be curious to know how many of these people relied on it as their sole underwriting tool and used a flawed comp set, like what @Andrew Steffens listed above where it pulls from the beachfront houses while you are 3-4 blocks back. I've also seen wild estimates in rural areas where there are very comps to pull from.

With any comps you should be able to cross check their calendars and see if the math makes sense. I've been able to at least match AirDna on several different properties and with my larger place greatly exceed it.

Tyler Divin · Answer

I can confirm something is up with AirDNA recently.  In January, I took a screenshot of the Chattanooga Market overview for our business plan, which showed 2,155 active listings.  In October, I was working on slides for a speech, and it said 736; and today, 129.  In my opinion, AirDNA data has been worthless in our market for about 3 months now and counting.  I'm not sure what's going on, but writing this post has inspired me to email them and ask for a credit to our account.

Patricia Andriolo-Bull · Answer

I suspect it is what I mentioned in other posts. Not all hosts have accounted for the 15.5% Airbnb fee and the rates are artificially low. I noticed this in my market. If connected hosts didn’t increase their rates, they now look very low without the Airbnb guest service fee.

Allen Bosbyshell · Answer

Are DSCR lenders really underwriting with AirDNA projected revenue? Would they actually approve you with just a 12 month data/projection from AirDNA?

Michael Baum · Answer

Even with the 15.5%, AirDNA has always been a crap shoot IMHO.

I have seen AirDNA overestimate by a ton. Like 200% over on revenue and spoke with others who based their entire purchase off AirDNA projections only to have them fall way short.

Account Closed · Answer

I have seen them over and under estimate in the past.  The problem is even when I know what a property can produce, lenders will use Airdna when there is no rental history.  When they cut their estimates in half it means the properties will not be able to be underwritten.  I had offers on a couple properties this weekend and thankfully we couldn't come to an agreement as I was offering 15% below asking.  At the current AirDNA estimate I would have to offer 60% below asking to finance them.  I know they could do more than the original Airdna estimates.  AirDNA helps guide my offers as I know what a lender would lend on it to get a 1 to 1.25 DSCR ratio. For me Airdna is more of a lending and offer tool than a personal underwriting tool because I know my markets very well and what properties can produce in them.

Eric Lawson · Answer

Looks fixed now. Yesterday my prop showed $77k and today its showing at $132k which is what AirDNA showed a few months back

Vincent Jacobbi · Answer

From what I heard, they adjusted to provide a wider catchment for rural areas which could skew a more dense area. I believe they resolved this as of today.

Did AirDNA Projected Revenue Just Take A Nose Dive?

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