STR AirDNA analysis

[Shelby Blanco]

I'm analyzing a mountain/lake town about 4-6 hours out from 3-4 fast growing cities. AirDNA shows it on the rise in terms of annual revenue, occupancy rate, average daily rate and revpar, with about 3,000 total listings. I've narrowed down the best return for my money in this market to a 2 bed/2 bath (with top tier amenities) - about 500 total 2/2 listings.

I'm finding myself a bit stuck when analyzing why certain properties are making so much higher than the average listings when they seem to have very similar locations, amenities, style, flow of home, beds/# of people they sleep, reviews, number of reviews, etc. (aside from the 1 or 2 homes that have stunning overlook views).

When building out your buy box, are you all using the averages, or are you basing your min/max on the cream of the crop listing revenues, even when there aren't clear reasons as to why they are performing so much better than others? Obviously if I intend to have a top performing STR in this market, my buy box will allow for a much higher max purchase price, but I wouldn't feel comfortable with shooting for the max if there aren't clear ways to beat these competing properties. I'm also seeing lots of homes for sale that were used as Airbnbs, so I'm wondering if that along with these numbers may indicate it's an overly saturated market, and if these are signs that maybe I should keep searching for a stronger market, or just a property that cash flows given the average annual revenue?

I'm just starting out and getting reps in on analysis, so maybe this is a silly question, but hoping others have wondered the same and curious to hear yall's thoughts!