All Forum Posts by: Calvin Baughman

I am under contract on this property in Glendale, Arizona. I am bullish on the location and the building. The revenue projections seem reasonable to me because I have another STR in Glendale with 4B2B that is on track for $90k this year. It is much further away from the Westgate Entertainment Complex than this property. Lots of visitors come to town for events there, so I think this location and expanded size will be an excellent draw.

What would you do with this house and more importantly the yard to maximize its appeal and ADR?

Hello everyone,

As a prospective investor in short-term rental, I would like to get some feedback regarding the upcoming demand for short-term rental. Considering the current economic climate, where layoffs are happening every other day, and interest rates are going off the roof, is it a good time to invest in STR or wait for some time? Also, in this market, will people go on vacations and spend money on STR?

I have a small Airbnb in a college town that is also close to several hospitals.  Our guests are mostly visiting because of those two things, and generally for 1 to 3 nights, but we do get the occasional longer stay.  Would it be worth it to offer a gym membership as an amenity?  The monthly expense would be a little bit more than what we charge for one night.  As far as I can tell, none of the other Airbnb's in our immediate area offer that.  I'm not sure our guests even want that, and I'm not sure it would increase bookings.  I was just trying to think of things that others don't offer.  

I've heard many people say the same as Ryan, that Airdna has been way off.

I recommend people take a few minutes and manually check their competition to get the most accurate analysis. 

Not a day goes by when a vacation rental investor does not ask: "How accurate are AirDNA rentalizer estimates and projections for short term vacation rentals?" 

The simple answer is highly accurate..A recent CBRE report on the accuracy of AirDNA date found it to be 97.5% accurate in reporting active supply of vacation rentals. That same report found data to be 96.2% accurate. 

Here on the Oregon Coast, I would attest to that accuracy based on the review of hundreds of financial statements for active oregon coast vacation rentals and the performance of nearly two dozen STR investors and operators we've helped acquire properties within the past three years.

In fact, AirDNA is so accurate that many lenders will now accept a AirDNA estimate (for non-declining markets) as evidence of sufficient qualifying income on many DSCR (Debt Service Coverage Ratio) loans and mortgages. That's a good example of a 'healthy' mortgage market albeit fairly astonishing that banks would consider the revenue data accurate and consistent enough to lend on. For lenders/banks, quality vacation rentals are clearly a unique and reliably performing asset class..

For investment properties these lenders typically require a minimum 20-25% down payment but since there is higher gross revenue, the investor can often qualify for a higher loan amount. Most allow gifted funds for the down payment as well as seller concessions of 2%. The majority of STR properties in Oregon fall within the loan limits of up to $2-3M depending on the property type. Loan programs that utilize AirDNA income projections to qualify can also be utilized for cash out refinances (if not currently operated as an AirBNB) although some lenders have a maximum cash in hand of $500k-$1M typically at a lower loan to Value of 65-75% for investment property vacation rentals.

I advise clients not to solely rely on AirDNA data for performance analysis as there can be some variation based on amenities such as hot tubs, premium decor and design and general operational excellence. Operators that are open and able to offer combined usages for slower seasons, such as mid term discounted extended stay rates in the winter, can improve lower estimated production in the off-seasons. 

It is good practice in assessing STR potential and performance by combining personal research and rental experiences (rates and dates) with at least one local reputable Property Management company rental revenue estimate.

Is AirDNA accurate in your area? 

@Collin H.

With credit card defaults and auto defaults on the rise as well as overall debt - people will start tightening the belts and first thing they will get rid of is spending on travel and vacations etc

So reading this I am not surprised - how has 2024 been compared overall to last year ?

This is one of my personal properties near downtown Gatlinburg. It is a luxury log cabin right on the Roaring Fork River.  A year ago, Memorial weekend - as well as all of June, was completely booked at a minimum of $299 per night.  

A few weeks ago, I marked down Memorial week to $169, and it still sits unbooked!  First time since I built it in 2017.

Not worried at all, but fascinating!  

I would try am accommodate as much as possible since they have to take days off work.

You could do a video walk through to document everything or do it while the cleaners are there.

I don't do a post walk with tenant and the new tenant agrees everything is in good condition when they sign the lease.

Try and be flexible.