Investor · CLT · Member since 2021 · 17 posts · 4 votes
Hi-- I've been using AirDNA to analyze a potential market for STR's and very much like the product. Can anyone attest to the accuracy of the "Rentalizer" tool?
Overall it seems like a great tool to get a picture of a market but curious as to how it does with projections.
It truthfully depends on the market and how much data is available/exists.
What I will say is that my lending firm tracked months down on the line on how properties actual performance tracked vs the Air DNA projections we used to qualify the loan, and the results were pretty accurate.
@Luke Carl the rentalizer is a decent tool to analyze performance DATA of a neighborhood immediately surrounding a subject property. What it cannot measure are the intangible items that contribute to that performance data such as: quality of photos, amenities, listing detail, etc. For this you have to use the ENEMY Method to assess WHY the properties immediately surrounding the subject property are performing better or worse than they should be.
Thanks for the replies! Just watched the enemy method video twice! It's great for what's available now/soon but cant really use it to analyze what to expect months out. Looking at a seasonal market so trying to gauge demand/rates for high and low season.
@Stephen Johnston Lean heavy on local investor friendly realtors, we tend to be able to extract actual data from similar units to get the best analysis on income. Airdna should be taken with a grain of salt.
@Stephen Johnston I think it's a waste of your time to check properties manually for pricing and occupancy data. Not only will you have to check the same properties multiple times a year to get an accurate representation of occupancy/seasonality, but tools like Airdna and Rabbu exist to do that for you. Of course you should take their data with a grain of salt and realize that the map is not the territory, but you're doing yourself a disservice by trying to find out that data when it's readily available.
On the other hand, @Avery Carl is on the money with her assessment. Check out why properties are doing well based on what amenities they offer and how they describe their listings. That will help you figure out what are the bare minimum amenities you need to survive and what you can offer that differentiates your property from the competition.
So in my first couple weeks of listing my STR I've become pretty discouraged with the accuracy of those things. My rental definitely isn't producing over 4k a month off just Airbnb bookings like Airdna's rentalizer tool projected. I had to slash prices to get any bookings and then it makes it not financially worthwhile since it's occupying a great deal of my time to manage (obviously the time investment will dwindle once I get a better grip on managing a STR) and dealing with turnover and weird people and guests on Airbnb is not something I'm a fan of. We are just breaking even right now (we set out break even point to what we'd actually make just renting the place out).
We pulled out all the stops for our place too. It’s definitely one of the nicest most neatly decorated places in the area, in a fantastic location. It should definitely have performed like a top 10 percent of listings. I could’ve chalked it up to not having reviews etc. but it clearly was price. After cleaning fees and everything else people just don’t want to pay more than a certain price point for a place.
My recommendation before diving head first like we did:
1. research the heck out of the area, make sure if it’s only got seasonal tourists you can make high enough pricing in the popular seasons to hold you throughout the slow seasons.
2. Make sure the area isn’t already heavily saturated with Airbnb’s or has enough demand to compensate for the saturation, otherwise it’s just a race to the bottom for pricing
3. make sure you can’t make more in RENT without having to cover utilities and other expenses
4. Make sure you research pricing strategies and be very aggressive in planning that out months in advance. Don’t list your place and leave your calendar open months in advance and have someone accidentally book thanksgiving week for 20 percent off at a cheap rate. That massively cuts into your profits out the gate if you lose peak days like that. We had our listing go live without knowing it and immediately got all our holidays booked for the rest of 2020 at an incredibly low rate! Talk about shooting ourselves in the foot!
5. cut your projected profit in HALF. You’re going to have lots of random vacancies and you’ll have to discount the heck out of them to get them booked. Then there’s the hotel tax and personal tax, so that’s like 25 percent and then you have to plan for expenses and unexpected vacancies or issues so really your take home might be 50 percent (probably less) than you’re planning on.
Are you saying you don't trust computer algorithms every day @Bruce Woodruff? Or have you not heard of Google, Waze, Apple Maps, Uber, Kayak, and dozens of other apps that allow people to not waste time doing manual work?
And since you didn't read my post Bruce, I'll repeat what I said above. Use both technology and your own research to find the best properties.
@Stephen Johnston I think it's a waste of your time to check properties manually for pricing and occupancy data. Not only will you have to check the same properties multiple times a year to get an accurate representation of occupancy/seasonality, but tools like Airdna and Rabbu exist to do that for you. Of course you should take their data with a grain of salt and realize that the map is not the territory, but you're doing yourself a disservice by trying to find out that data when it's readily available.
On the other hand, @Avery Carl is on the money with her assessment. Check out why properties are doing well based on what amenities they offer and how they describe their listings. That will help you figure out what are the bare minimum amenities you need to survive and what you can offer that differentiates your property from the competition.
Good luck!
Garbage in equals Garbage out. Airdna is not accurate.
It is critical and easy to check manually. At one time I had a spreadsheet with 5 competitors. I had a hyperlink to each property and formulas to give me average prices for different times of the year. It only took a few minutes to check this quarterly. This gave me occupancy numbers also.
If your not checking this yourself then your numbers are likely wrong.
So take a few minutes to get it right or rely on on some site that might get you close.
@John Underwood I’d love to run a simple test here. Do you have an address for a property you’re looking at now, along with the ADR or RevPAN and occupancy rate you came up with? Or would you like to run your numbers on a couple of properties in a specific market and compare with mine?
What I’d like to know is if I can find numbers similar to yours without taking 4 quarters to do so. Seriously, who wants to wait that long before purchasing a property in a given market?
We actually do agree on one thing though. It’s not wise to rely solely on Airdna for purchasing decisions. Cross-reference with Rabbu or any other data set to get a more accurate idea of revenue potential. From there, use the Enemy method to do a deep dive on amenities/photos/descriptions and see how you can stand out from the competition.
The research is important John, nobody is arguing that. It just doesn’t make sense to me to manually count numbers when I have a calculator at my disposal. And if you have your own way of analyzing properties, more power to you!
@Joy Elisse Garner that's really weird! What market is it in? I have found that all of the STR's I have have significantly outperformed AirDNA rentalizer data in Destin, 30a, Smoky Mountains, and Forgotten Coast.
I will say that the market-wide aggregate data is better (although still not perfect) than the rentalizer tool. Rabbu is also a good one to throw in the mix for another data point, as well as the pricelabs market dashboard function.
@Kyle Momany is also correct, find an agent in your market that specializes in STR's and/or owns their own.
Are you saying you don't trust computer algorithms every day @Bruce Woodruff? Or have you not heard of Google, Waze, Apple Maps, Uber, Kayak, and dozens of other apps that allow people to not waste time doing manual work?
No I do not trust algorithms ever. They can easily be manipulated. Here is just one of many articles on the topic: https://www.ccn.com/google-man...
Algorithms are programmed by tech geeks to gain the results that are desired. I doubt there is a 'correct' algorithm on the planet. Almost every day, I get messages from VRBO and/or AIR showing me their latest algorithm about how I can make more money by lowering my prices...yet I am completely booked....hmmm. Make ya wonder at all? Youtube sets it's algo's to catch speech THEY find offensive, so does Twitter.
And on and on. So no, I do not have any faith in the little computer gremlins, as a matter of fact, I distrust them completely.
But bottom line is we all gotta do what we think works for us. I am confident in my approach and it has worked well for me. I'm sure yours does the same for you....I would just advise a newbie to do both (as you have said!) but rely more heavily on their own research.....
Hi @Bruce Woodruff - I'm not suggesting that Google and other tech companies always do everything above board. But you might want to source info from another site. The homepage of that site hasn't been updated since March of this year. Pretty big red flag.
Hi @Bruce Woodruff - I'm not suggesting that Google and other tech companies always do everything above board. But you might want to source info from another site. The homepage of that site hasn't been updated since March of this year. Pretty big red flag.
That was just the first sight I pulled up, there were dozens of pages of results like that. Just do a search yourself. Whether it's intentional or not analytics and algorithms can be badly flawed...
So in my first couple weeks of listing my STR I've become pretty discouraged with the accuracy of those things. My rental definitely isn't producing over 4k a month off just Airbnb bookings like Airdna's rentalizer tool projected. I had to slash prices to get any bookings and then it makes it not financially worthwhile since it's occupying a great deal of my time to manage (obviously the time investment will dwindle once I get a better grip on managing a STR) and dealing with turnover and weird people and guests on Airbnb is not something I'm a fan of. We are just breaking even right now (we set out break even point to what we'd actually make just renting the place out).
@Joy Elisse Garner Any update on how your Airbnb is going? I'm curious if your Airbnb started booking closer to the Airdna projections.
So in my first couple weeks of listing my STR I've become pretty discouraged with the accuracy of those things. My rental definitely isn't producing over 4k a month off just Airbnb bookings like Airdna's rentalizer tool projected. I had to slash prices to get any bookings and then it makes it not financially worthwhile since it's occupying a great deal of my time to manage (obviously the time investment will dwindle once I get a better grip on managing a STR) and dealing with turnover and weird people and guests on Airbnb is not something I'm a fan of. We are just breaking even right now (we set out break even point to what we'd actually make just renting the place out).
@Joy Elisse Garner Any update on how your Airbnb is going? I'm curious if your Airbnb started booking closer to the Airdna projections.
Chris:
It actually is pretty accurate, I wasn't factoring my costs in those projections (like cleaning fees, etc.) if you factor those expenses then yes, the projections of revenue were accurate. We spend a significant amount on cleaning fees. We are in a 1-2 day lead time market for bookings, with a lot of 1 to 2 nighters, lots of turn over, so lots of "revenue" but most of it goes to cleaning! Every market is different.
Julie, not sure if BP lets me post the video here, but the url is https://www.youtube.com/watch?v=Noa_OLEKGQ4 (make sure the "4" pastes on the address bar) You can also search for it on YouTube, "How to Analyze a Short Term Rental Investment, The "Enemy" Method! Good luck!
Julie, not sure if BP lets me post the video here, but the url is https://www.youtube.com/watch?v=Noa_OLEKGQ4 (make sure the "4" pastes on the address bar) You can also search for it on YouTube, "How to Analyze a Short Term Rental Investment, The "Enemy" Method! Good luck!
It truthfully depends on the market and how much data is available/exists.
What I will say is that my lending firm tracked months down on the line on how properties actual performance tracked vs the Air DNA projections we used to qualify the loan, and the results were pretty accurate.
It truthfully depends on the market and how much data is available/exists.
What I will say is that my lending firm tracked months down on the line on how properties actual performance tracked vs the Air DNA projections we used to qualify the loan, and the results were pretty accurate.
Now, THAT's useful information.
Any insight as to what, if anything, has changed in the last 3 months with all the commotion regarding travel, recession, generally gloomy news to the public?