Software that identifies high ROI STR markets - helpful, or not?

[Sean Bramble]

Warning: long-winded question ahead ...

I've seen a few attempts at software that helps investors find high ROI STR markets ...

> Airdna had one I believe they retired (not Market Minder ... forgot the name - plotted a bunch of triangles in a matrix)

> Mashvisor currently offers a heatmap feature for "Airbnb COC return" - cumbersome, but you can manually scroll across the US and look for green areas while pulling your hair out every time their interface freezes

> I'm actually beta testing a new platform a company called STR Insights is launching that displays the same data in table form with a map feature as a bonus to double click into individual markets and see where high performing listings are located

All 3 are essentially doing the same thing: comparing average STR revenues (scraped from Airbnb/VRBO) to average home prices (scraped from Zillow, etc.) and converting them into a ratio. I'll call it "gross ROI" (avg revenue / avg sales price within the same bedroom type). The ratio ignores all PITI and operating expenses, so it's not the "real" ROI, but if you compare it across markets you should get a sense of the relative affordability of STRs ... higher ratio implies higher return ... in theory ......

I'll admit that software like this has been useful for me to identify a few geographies I wasn't previously considering, but i'm starting to notice major limitations as well. Specifically, ratios change significantly and extremely often in many markets, which has me thinking this sort of software is plagued by low sample sizes ... at least outside of major areas with lots of STRs and home sales. It also doesn’t work well in markets where high performing listings are all in a specific area (like a beachfront). Not to mention it ignores all the other qualitative variables that will help or hurt your eventual return (especially how professionalized current competition is). I know software like this is only designed to do a light scan across markets before diving deeper yourself, but I'm starting to wonder if it's even that helpful as a first step. 

Maybe that's why Airdna discontinued their solution for this in the first place ... who knows ... scratching my head a bit here

Any quant nerds in here like me who have used software like this before? Where have you found it to be useful, and where does it fall short? Are there better ways to identify high ROI markets?

... also bracing myself for the number of replies that mention "analysis paralysis", haha ... well deserved :)