Airdna? How real are the numbers and data?

22 Replies

So I've run the numbers on the airdna website for a property that caught my eye… What came back blew me away. It's a 16% cap rate, NOI of $50,000, gross income of 96k. 87 % occupancy rate, $154 a night. If this data is real, I've hit a gold mine, so I guess my question is, how has every ones actual numbers and experience compare to the data provided from airdna?

Airdna is ok depending on the market. Typically is low in the markets I’m in.

Verify with other str owners in the area by looking at the calendars and rates of similar properties on Airbnb and vrbo.

You really need to pay for the full market subscription to verify the data. It does use real data from nearby properties on Airbnb and VRBO, but sometimes the comps aren't great. When you pay you get to see the actual comps it uses, so you can verify whether the projection is realistic.

Data has been overinflated and numbers are aggressive from my experience. Potentially a mix of the data scraping taking into account blocked days on the calendar as true occupancy, and factoring fees as part of the ADR (average daily rate) I would say they have shown a material miss when it comes to data for properties that I had managed in the past. By a big factor. Take caution and beware of the AirDNA info. It's better than nothing but still compromised in my opinion. 

Originally posted by @Christopher Brown :

Great feedback guys. Would I just look on airbnb in my area and try to book out certain dates to see how booked the area is? Not sure how to figure out occupancy percentages or over night rates.

Go on AIR and VRBO - I prefer VRBO as a vehicle....Find a property (s) that are really close to yours in size, BR/BA, amenities Etc...

Start with this month, then next month, Etc.....look at holidays and special events. Check for 2 night stays out to whatever length of stay you're going to allow.... You will pretty quickly see the patterns develop. Take notes, start a spreadsheet, then you will have your own REAL data.....

@Bruce Woodruff

Will do Bruce! What got my attention with this property is how it compares to other water front properties in this rural area. It’s a 3 family, with 3 separate units and a large lot of land compared to all the other water front cabins with quarter acres. There are only two other water front properties in this zip code and the rates are pretty nice, as well as the occupancy at least according to airdna. I’ll do a deep dive into this like you guys suggested and really see if it’s worth pursuing thanks again!

@Eric Gebhardt great suggestion. Where I'm located they just approved STR regs. Those who cannot show proof of STR earnings for prior year will go into a queue for an STR license. If the cap has already been met the applicant will need to wait for a new slot to open up. Cap will be a predetermined % of Single Family units in the area and that number can be changed by Board of Selectman. Researching current and future regs as well as the attitude of local residents regarding STR is very important part of process.

@Christopher Brown you can cross-reference Rabbu as well to compare numbers with Airdna. Your manual research into nearby properties should be focused on amenities, not bookings. The amenities your competition offers will determine how booked they are, and also will help guide you to figure out what you need to offer to separate yourself. 

Very rarely is this a "list it and they will come" situation. Good luck and feel free to DM me with questions!

@Eric Gebhardt that was my first thought as well. Step #1, ensure it is legal by calling your local planning division/government office and HOA. Just because you found some listings online doesn't mean they are operating legally.

Free AirDNA is a great starting point, but it can't give you all the answers. You can add fidelity to that data by combing through AiRBnB and VRBO listings to check availability. I think AirDNA becomes far more accurate in heavily competitive markets (vacation hot spots). All that said, in markets with very sparse STR activity, you may not really know the actual demand.

Rule of thumb: In cities with a hospital/refinery/military base with multiple chain hotels and population above 10K, there will be STR demand. No doubt.

The challenge with ANY data driven data that estimates valuation is the outliers can skew the data. It is also not granular enough in some cases. Maybe your zip code averages X, but within that zip code there is 12 square blocks that skew the numbers high. A property one block from downtown may rent for twice what a house a mile away rents for. A property on the ocean versus a ten or 30 minute drive makes a huge difference.

I am a fan of doing manual comparison so you pick the comparable properties. The key is being honest with yourself and pick equal properties in location and quality. 

Also be aware that reviews and listing quality plays a major role in how much you can charge for a property. Two identical properties next door to each other may rent for different prices simply because one is managed or promoted better. 

Over time we have been able to push our prices higher as we built up reviews, so it can be a process. 

@Alex S.

It’s a 3 family house on a lake in a rural area. Population is pretty low compared to the rest of the state, and most of the properties in the town are single families as well. Compared to other single families on lakes in town (there’s only two on airbnb) I could easily match and even add more amenities. With it being a multi family, could I airbnb each unit?

Yes, 100% could turn each unit into its own STR. I haven't ever done it, but I've heard of ways to create multiple listings that allow folks to book one or both together.

For mid term stays and extended stay rentals, you don't want to rely on at all. You want to look at what your local extended stay hotel is doing. Check a video I put together that shows you exactly what I mean: 

Beware of potential cannibalization  with a multi-unit short term rental. Sometimes they can work, but if you've got a 4plex for example that doesn't have a ton of competition in the area in general, you're basically having Property listing #1 vs #2, #3, & #4. I've seen some highly successful duplex & fourplex's, but have also seen cases where a 12 unit hotel converted to a bunch of 1BR Airbnb's just wasn't successful. 

Every other 2 bedroom lake house in the county (there’s only two) are booked out until September 2022. I thought the same thing, adding 3 more units to the mix might ruin the demand but I’m optimistic since there are only two other lake houses listed in the area.

Originally posted by @Christopher Brown :

Every other 2 bedroom lake house in the county (there’s only two) are booked out until September 2022. I thought the same thing, adding 3 more units to the mix might ruin the demand but I’m optimistic since there are only two other lake houses listed in the area.

Sounds like you may have found a diamond in the rough. Everything is sounding real good from what you're saying, just be sure to do your due diligence. Once you decide if you're going to buy or not, I'd be interested in hearing the location of this property. Nice find, way to go :)