How accurate is AirDNA?

Question

I am curious about AirDNA, any use it and rely on it.. in general? I tried it out for Joshua Tree, CA and it seems a little optimistic.

Michael Baum · Answer

Hey @Scott Scialabba. It is an algorithm. Data in, data out.

I have found it to be quite optimistic and others less so. It is all going to depend on how many data points are pulled. How many places similar to the one you are looking at.

I find it to be OK as a rough estimate, then drill down more by checking the other close places and see what they are charging nightly, occupancy and amenities.

You can also try Rabbu and Awning.com's estimator. They all produce different numbers but it can help drill down on a good starting point.

If you do a search on here, you will find some posts about JT and how people are really having a hard time cashflowing.

Andrew Steffens · Answer

I think the only real way to use it (which I do) is to have the premium version.  With it you can see the comps it is using to calculate its estimate so if they are not relevant you can discard them and if they are relevant you can recalculate on your own.  Without they are giving you a number and you have no idea how it is derived.

For example in my market a 3/2 house on the beach makes double or more a 3/2 house a mile off beach.  If you have a house off beach it may pull in the beach comps and give you an artificially inflated projection.

Nathan Gesner · Answer

Computer algorithms can be fairly accurate, or wildly innaccurate. I think it's reasonable to use AirDnA to evaluate a general market, but I would never recommend using it to evaluate a house because there are too many things a computer can't consider: home layout, view out the living room window, noise levels, quality of kitchen cabinets, and dozens of other considerations.

Robin Simon · Answer

We have found it to be pretty accurate and solid, but like the others have mentioned, its just a tool and very data-based.  Real Estate is almost never a commodity (excepting cookie cutter PUDs or condos etc), so small things in some markets like views and block vs. two blocks to the beach etc can have a big difference that it might not pick up.

Additionally, AirDNA is generally capturing the median - and a huge factor in STR success (and revenue/occupancy) is stuff besides the property, such as quality and reputation (reviews) of the host, interior work, pricing/marketing strategy etc

Alex Scattareggia · Answer

This is the best strategy I have found.  Get as many data points as possible and average it out to get as close to accurate as possible.

If you are local to the area, there is nothing better than talking to a fellow investor who is succeeding and get some reliable information on what works and what doesn't.  If you approach this correctly you can get invaluable information on the specific market.

There are STR markets where a two-block distance can make a huge difference in income, which is not always accurately synthesized by Airdna or any of the other data scrapers.

Leslie Anne Morris · Answer

It goes up and down based on what you type in. I looked at it previously and thought it was low for my market. I’d talk to other investors, realtors and do your own research versus just relying on one source.

John Underwood · Answer

You really don't know what their comps are. They could be using a doublewide.

It's best to check this manually. It only takes a few minutes.

Brooklyn McCarty · Answer

You should never use one single data source. Use several and average them together.

Timothy Wheeler · Answer

I'm an STR owner in the Joshua Tree area (Yucca Valley) and I find AirDNA to be helpful but I only treat it as one data point to assess my pricing. The market is changing very rapidly and you really need to talk to owners/cleaners/contractors in the area to get a pulse of what is happening in the industry and how to price.

Are you already an STR owner in the region?  I wouldn't suggest trying to get in now.    The market is very oversaturated will be for the foreseeable future.  To cashflow you really have to be one of the most outstanding premium properties in an area that is a worldwide trendsetter for outstanding properties.  I know some pretty sweet properties that are having trouble right now. We are lucky to have a special property that books but we have been forced to drop our prices considerably and are not getting the occupancy rate we have been getting in previous months/years.

Good luck and feel free to DM me.

Jesse Turner · Answer

Joshua Tree has certainly appreciated to the point of market equilibrium. Some of the nearby towns (Like Twentynine Palms) may still have opportunities for positive cashflow.However, the revenue growth for both areas is pretty stagnant, so if you're counting on scraping by the first couple of years to then cashflow later, I'd recommend looking somewhere else. Particularly if you're attempting to BRRR your STR (not advisable in that market).

How accurate is AirDNA?

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