AirDNA Projections Inflated?

Question

A question to those who use AirDNA to analyze revenue projections (Rentalizer feature in AirDNA) for short-term rentals, do you feel that the revenue projection numbers are inflated? If so, by how much, percentage-wise, in your experience? What other tools do you use in your analysis for short-term / vacation rentals?

Luke Carl · Answer

@Steve Miklashevskiy

I don’t think it’s that they’re inflated it’s just that they’re a bit all over the place. In my market their occupancy rates seem to be way too low. It’s a good tool but it can’t be your end game.

Enemy Method is the best option. It’s no different than checking out what your neighbors rent for on Zillow or Facebook for a LTR.

https://www.biggerpockets.com/forums/530/topics/818478-determine-how-much-an-str-will-make-using-the-enemy-method

Can’t link from the app

Michael Baum · Answer

Hey @Steve Miklashevskiy, like any algorithm, outliers will skew results. The Pigeon Forge area has a ton of rentals so you will get generally better results.

In my area, there are some real expensive outliers that skewed my nightly waaay up. So you have to take the results with a grain of salt. I prefer just running the numbers based on places that are similar to mine.

Jon Crosby · Answer

@Steve Miklashevskiy

What most people don't realize about AirDNA's ADR and Revenue metrics is that is including cleaning fees when generating a total.  While they have good reasons for doing it this way, it doesn't generally work well for my needs, so I actually have created my own data manipulation process for extracting that back out to create more true ADR to calculate my projections against.

But, as a rule of thumb I usually tell people to take the ADR it gives you and drop it by 20% to get a better ball park number of real Average Daily Rate.

Hope that helps.

Steve Miklashevskiy · Answer

Thank you for providing the link to the "Enemy Methods", very helpful. I've used Airbnb listings for comparisons and certainly will use going forward. With Airbnb listings - how do you know their occupancy rates over the past 12 months (AirDNA provides a ballpark)? Also, how do account for seasonality when searching Airbnb listings? Their rates today may be very different than in the low (or high) season and even lower / higher as the dates approach?  How do you derive reliable information by looking at similar/targeted listings on Airbnb?  How do you actually make a reliable annual projection?

Anand S. · Answer

@Jaeseok An  Some folks may do the cleaning themselves or may find more efficient cleaning solutions, so I believe including that in the revenue figures is acceptable as long as they caveat that it is and specify how much.

Jaeseok An · Answer

Data is gold but misinterpreting or having bad data is worse than no data. Here are a few things you need to check before using the data.  1. Do you agree with the boundaries that AirDNA has set for your region? Do you think the majority of the properties within that boundaries are fairly similar (in terms of short-term rental attractiveness) to the property you are thinking of running Airbnb? 2. Typically, 20 - 40% of listings in a neighbourhood are owned by supehosts, and their properties definitely make more money. If you are just getting started out without any reviews, your expected ADR and Occupancy Rate could be lower than the average. 3. The revenue probably includes cleaning fees. The percentage of cleaning fees in the revenue could be up to 15%, and as you know, those cleaning fees are at the same time operating cost.

AirDNA Projections Inflated?

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