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).

[James Carlson]

Quote from @John Underwood:

FYI,

New listings get artificially pushed to the top of search results to help new listings get traction.

 I appreciate the Airbnb 101 lesson, but they're outperforming their competition and AirDNA by a wide margin. Even with the new-listing bump, that's a lot of room to lose some traction and still have a well-performing asset.

Because I've also seen some people's mediocre listings go live and they perform ... eh, just fine. The algorithm can push a crappy listing to the top. It can't make people book it.