How to Analyze a Short Term Rental/Airbnb Property for Investment

[Isaac Fridmann]

Hi BP Fam,

I know this question has been asked a lot but I haven't been able to get a clear direction. I'm looking to invest in a STR. I'm trying to analyze the deal but this is where I've hit a road block. I see a lot of members mentioning two methods:

1) AIRDNA. I was about to sign up but saw mixed reviews on the forums. Would really like to know if it's even good as a guideline.  

2) Checking manually on Airbnb for similar properties nightly rate and occupancy rate.  From what I've seen, it's only possible to get data for 2-3 months into the future. How do you determine the properties performance for the rest of the year? 

If there are any other methods/videos you recommend, I'd really appreciate all the input I can get.

Thanks in advance!

[Mackenzie Grate]

I'm gonna say something controversial here...but just want to put it out there cause I struggled with the same thing too when running the numbers on my first STR. That is, there is no concrete way to pull that exact data. And even if there was, it will change constantly and lots of the numbers are based on your design, how you manage it, etc.

Focus on a ball park for both nightly rate and average occupancy. Keep in mind the big picture. If it's a beach town, it's gonna be dead in winter, if it's a mountain house you probably will get more visitors in winter. If it's an urban city, when does it get crowded with tourists? You are looking for ballpark numbers here. Don't over think it. But go with the conservative end of your ballpark numbers that you see on comparable airbnb listings in your area.

Over time you will figure out the little hacks to save money. Perhaps swap out the cleaning lady to someone more effective and cost efficient. Perhaps you add smart plugs so you can turn off appliances when people are checking in and out. Maybe you open it up to pets because you will get more travelers this way.

Don't overthink it. Just get a ball park number by looking at others and make some educated guesses based on what you already know about travelers and what times of the year they travel. That will be enough information to tell you if you should move forward or not.

Hope that helps a little bit... 

Good luck! You got this!