How accurate are AirDNA estimates & calculators for STR's?

[AJ Wong]

Not a day goes by when a vacation rental investor does not ask: "How accurate are AirDNA rentalizer estimates and projections for short term vacation rentals?" 

The simple answer is highly accurate..A recent CBRE report on the accuracy of AirDNA date found it to be 97.5% accurate in reporting active supply of vacation rentals. That same report found data to be 96.2% accurate. 

Here on the Oregon Coast, I would attest to that accuracy based on the review of hundreds of financial statements for active oregon coast vacation rentals and the performance of nearly two dozen STR investors and operators we've helped acquire properties within the past three years.

In fact, AirDNA is so accurate that many lenders will now accept a AirDNA estimate (for non-declining markets) as evidence of sufficient qualifying income on many DSCR (Debt Service Coverage Ratio) loans and mortgages. That's a good example of a 'healthy' mortgage market albeit fairly astonishing that banks would consider the revenue data accurate and consistent enough to lend on. For lenders/banks, quality vacation rentals are clearly a unique and reliably performing asset class..

For investment properties these lenders typically require a minimum 20-25% down payment but since there is higher gross revenue, the investor can often qualify for a higher loan amount. Most allow gifted funds for the down payment as well as seller concessions of 2%. The majority of STR properties in Oregon fall within the loan limits of up to $2-3M depending on the property type. Loan programs that utilize AirDNA income projections to qualify can also be utilized for cash out refinances (if not currently operated as an AirBNB) although some lenders have a maximum cash in hand of $500k-$1M typically at a lower loan to Value of 65-75% for investment property vacation rentals.

I advise clients not to solely rely on AirDNA data for performance analysis as there can be some variation based on amenities such as hot tubs, premium decor and design and general operational excellence. Operators that are open and able to offer combined usages for slower seasons, such as mid term discounted extended stay rates in the winter, can improve lower estimated production in the off-seasons. 

It is good practice in assessing STR potential and performance by combining personal research and rental experiences (rates and dates) with at least one local reputable Property Management company rental revenue estimate.

Is AirDNA accurate in your area?