Thoughts on strinsights?

Question

We are just finalizing our investment property loan and planning on jumping into the str game. We are interested in a few different national/state parks and ski towns and are trying to narrow it down. Someone recommended strinsights would be helpful and I would love to hear if others have found it helpful. I know airdna is highly recommended for looking at specific markets but since we are evaluating a handful at the moment we thought something like strinsights may be more helpful for the moment.

I would love to hear your experience and advice! Thanks in advance.

John D. · Answer

STRInsights, and many other tools, are giving you a 12-month trailing average (typically) that often doesn't show you the trend.  So for example in lake havasu, you may see an example property has earned $150k in the past 12 months.  It may not tell you that this July it has earned $10k, and last July it earned $20k, so revenues are quickly dropping.  The trend of the market, the recent increase in supply, the changes in demand, and how much properties earned relative to the change in supply and demand pre-COVID are SUPER IMPORTANT and they are data points that most of these websites do not provide adequate info on.Take it from me, many of our properties in Lake Havasu, Palm Springs area, and elsewhere are earning half this summer what they did last summer.  Demand is down, and supply is way up.  And that trend is accelerating into August.  A good tool or data analysis software should help show you that trend.

Sean Bramble · Answer

It’s a great “step 1” to identify a few markets you might want to search in. Keep in mind though that higher gross ROI markets are often that way for a reason: sketchier regulatory outlook, lack of quality contractors in the area, etc. Basically harder to do business. Many long-distance investors prefer the Smokies, FL beaches, etc for this reason even though average yields are lower. But this software will certainly open your eyes to all of the places you could invest.

Also recognize that the individual deal matters way more than market averages. If you were starting a restaurant you wouldn’t necessarily ask “what are the best restaurant markets in the US to invest in?” … so why do that with hospitality assets? Go look at Marriott’s portfolio across the US … it’s not like every Courtyard is clustered in 2 or 3 markets … they are literally everywhere. And I’m sure many of their locations in what you or I would consider “the middle of nowhere” are killing it. That should tell you something.

There is such a large disparity in performance across STRs even within a given market and home size/ type … that should also tell you something. Recognize that it is the hospitality business contained within the real estate you buy that matters most. A lot of us here on BP are RE investors and tend to downplay the hospitality piece - don’t make that mistake. And in the same way that paying too much in rent can sink a restaurant, paying too much for an STR property will kill cashflow.

Anywho- long winded way of saying it’s helpful, but don’t choose a market solely based on gross ROI averages when we know performance can deviate significantly from averages based on how you design/ manage

Brandon Blahnik · Answer

Awesome, thanks so much!

Joshua Messinger · Answer

Hey @Brandon Blahnik!

I would recommend using Pricelabs when trying to figure out any STR insights. They have made it super easy on their platform to seamlessly make a dashboard of the area you are targeting and then generate comps sets that are based on your competition (ENEMY method).

If you need any assistance with doing this please don't hesitate to reach out and I can give you a quick tutorial on what to do! Otherwise, Feel free to reach out if you ever need anything!

-

Josh

John D. · Answer

I might also mention our neighbors down in Borrego Springs that have some small funky little units, their revenue is down something like 80% July this year vs. July last year.  The trailing 12 months revenue makes those places attractive to buy, but if you see the year-over-year trend you would know to proceed with caution, the market has changed big time.  The change has just reared its head starting mid-June and getting worse coming into this August.  So if you look at their trailing 12 months revenue, it still looks good despite a RAPID deterioration in their numbers.

Mark F. · Answer

Can you recommend a good tool (website?) or software that shows STR market trends vs.the common 12-month trailing average such as STRInsights, AirDNA, etc.?

Thanks in advance.

Brandon Blahnik · Answer

Also, thanks for calling out the hospitality piece! I hadn't really focused on that part but I think this is a huge opportunity for me. I've spent my entire career leading Customer Experience teams across a variety of industries that I can really leverage here (7 years managing courtside season ticket accounts for an NBA team, 2 Global retail/dtc brands, and now a real estate tech company).

I will really enjoy the hospitality part and am more than happy to chat with others on the Customer Experience challenges that they may be dealing with!

Brandon Blahnik · Answer

Yes great callout @Nathan G.! Digging into the specific comps will be really important to make sure I am comparing apples to apples as best I can. I appreciate it!

Brandon Blahnik · Answer

This is such a great way to look at it. I think I have been way too focused on the market numbers and losing focus on the regulations and realizing great properties can exist in places outside of Joshua Tree, the Smokies, and beach hotspots where so many investors flock. I am starting to reach out to some investors and agents in the few markets I am considering right now to understand the STR regulations a bit better for the specific areas and will go from there. I really appreciate your thoughts on this!

John Underwood · Answer

The Smokey Mountain park has more visitors than the Grand Canyon.

Thoughts on strinsights?

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