Colorado Deal Diary: 90% occupancy in first 3 months

[James Carlson]

Thought I'd share my client's success story of their first STR here in Colorado. (Pics at bottom.) Short story is that they have more than 90% occupancy the first three months of going live. 

Clients
Young couple, two kids, wanted to get into their first property. 

Property
I found them a new build modified A-frame in the mountains of Colorado. I'm not sharing the exact location per their request. It's an hour from a city but not really that close to the "hot spots" of what out-of-state Airbnb guests would automatically think of.

What it lacks in killer location, it makes up for by being a totally unique short-term rental.

Uniqueness
There are several reasons why this property is outperforming its competition. 

A. It's a modified A-frame. Unique property layouts are doing well in this market.

B. They furnished it well with thoughtful design.

C. They added standout amenities ... one being a hot tub (kind of a standard must-have for Colorado STRs), the second being a clear stargazing dome. 

D. They spent real money on photos, and it shows.

Quick numbers
Not doing a full analysis here, but some big-picture numbers are:

-- $400,000 purchase price

-- 100% occupancy in month one and two, and 90% occupancy in month three (yes, they should totally raise their prices if they are this full). 

-- $7,000+ in gross revenue each of the first three months

Takeaways
This is a uniquely successful Airbnb investment in Colorado. (I urge my current clients not to expect these results, because it's not going to happen every time). My basic, back-of-the-napkin metric is looking for gross annual revenues to equal 10% of purchase price. They're on route to a 21% revenue-to-price ratio.  

All that said about not expecting these kind of numbers, this property does offer lessons for my other Colorado STR investors in this competitive Airbnb market ... Bring your A-game:

-- Bring unique features, be it a geodesic star-gazing dome or cool wallpaper for a standout visual element.

-- Hire a designer. Don't give me Craigslist overstuffed leather couches from 2004. 

-- Don't skimp on photos. (My clients above paid for daytime, twilight and nighttime photos to show off the various features of their property).

[Andrew Steffens]

Quote from @James Carlson:

Quote from @Andrew Steffens:

Good job! Thats a nice place for $400k! How are you marketing it, just Airbnb?

Well, it's not mine. It's my client's property, but I believe they're exclusively on Airbnb right now. They're getting a social media presence going soon to try to capture direct bookings as well.

(I've been critical of direct booking sites on BP before, but for the truly unique property, I do think building buzz can allow you to charge beyond what competition would otherwise charge.)

 Thats good they are getting a lot of traction on Airbnb.  I know some people with unique places off the beaten path sometimes have an issue showing up at all in searches.  Essentially they have a great property with nobody looking at it, and had to market it themselves.