Find Lucrative Short-Term Rental Properties
Articles,  Blog

Find Lucrative Short-Term Rental Properties


Hey everybody. Scott Shatford here, CEO of AirDNA here to
talk to you about how to find the best investment properties in your city. We pulled up a sample city of Cleveland, Ohio. It is actually one of the standout, stellar
markets across the U.S. so we thought we would highlight it here today and talk about how
you can use MarketMinder to target the best property to invest in this market. So, first off of the top, we’re looking at
Cleveland. We’re looking at zip code 44114 and it’s on
the shoreline here in Cleveland. Market Grade is the first thing that you should
be looking at. Market Grade is really where I’ve spent a
lot of time trying to summarize all of the hundred data points we have on all these markets
and synthesize it into five key metrics. So we’re looking at, you know, are places
making more money today than they were last year? How is the seasonality of the marketplace? What does the regulatory environment look
like? And most importantly, how much are properties
earning as short-term rentals versus long-term rentals? We see that here’s investability here, although
this is only showing a twenty one score for this individual zip code. Overall, this market shows really good signs
of life and growth into the future. So we’re looking at, you know, all of these
different things about average daily rate, occupancy, revenue of the average property. But we could also use the map to dive even
deeper, and look at all the properties in these different markets in these different
neighborhoods and zip codes within the market, and start to think about how do we look at
where the best properties are? As you start to zoom in these properties start
to get sized based off of who is earning the most on a daily basis. So who has the highest ADR? You can also start to filter out private rooms
and shared rooms, and maybe you want to get a big place, so you could only look at 3-bedroom
properties. And then you could see exactly, you know,
where the properties are that are earning the most that are 3+ bedroom sorts
of properties. It’s always interesting when you’re looking
at all of these different neighborhoods just comparing high level stats. You know, where’s rental demand growing the
quickest? You see this part of Cleveland, investability’s
sixty two versus the other part of Cleveland investability was only a twenty two. So this is showing you that real estate prices
are undervalued in this market compared to even one zip code over in terms of what the
short-term rental income and return on investment is in this neighborhood versus the other neighborhood. So we’re also going to dive into, you know,
what is the expected revenues of all the properties in these locations. You know, not every property is built the
same and as short-term rentals are so different, unlike hotels, you know, often we need to
see, you know, what is the best performing property earning, what is the median property
earning, and what is the lowest properties earning in this marketplace? And that’s how we kind of intro percentiles. So percentiles is really telling you, you
know, what are the best properties earning and when are they earning that much money? You know, we see a huge spike here around
last year. I’m guessing it was a convention for the presidency,
I’m guessing. Here. So you see the 90th percentile property’s
earning twelve thousand while the median, average property’s only earning three thousand
dollars. So it’s really interesting to understand exactly,
you know, how your property fits into the competition, what your expectations are in
terms of whether it’s going to earn ninetieth percentile, top of the market sort of returns,
or more average returns based off the quality of the unit and your ability to price and
manage that property appropriately. So you can see that last month
the average property of all sizes did about four thousand dollars. You could see that the
average property, you know, that is a one bedroom or two bedroom property is earning
five thousand dollars for the ninetieth percentile property. So we also looking at kind of revenue over
time and we’re making sure that the market is growing overall for short-term rentals. We’re seeing that the whole vacation market
for two or three bedroom properties did about three hundred and eighty thousand dollars
last year, and seems to be trending up. So now that we know the overall trends for
the market – that revenue’s increasing, that properties are earning more today than they
were yesterday, and all the kind of high level signs in the market seem to make sense. How do we make that next step? How do we dig a bit deeper to figure out where’s
the exact right neighborhood even more so the exact right property to invest in? You know, what I like to advise people to
do is jump into the Top Properties in the market. If we look at this we’re looking at, you know,
what are the top performing studio to three bedroom properties in the entire Cleveland
market? You know, we could sort this a bunch of different
ways. We can see that this upscale downtown Cleveland
condo is doing about eighty five thousand dollars a year in revenue, and I can guarantee
you this place doesn’t cost more than probably thirty thousand dollars a year to rent. So we’re looking at properties that are really
high performing here already. We can also start to sort this, right? What is the property that’s earning
the most on the average daily basis? What properties have the most reviews? What are they doing right in order to get
five hundred and five reviews in the Cleveland market? So this really lets you kind of dig into the
properties themselves and lets you figure out, you know, what are these properties doing
the stand out from the crowd, from a design perspective, from a pricing perspective, and
from a rating perspective in order to generate as much revenue as possible. These are some tips and tricks for how to
look at MarketMinder to explore markets to invest in and identify the perfect property.

6 Comments

  • Richard Hodgson

    These recent video have been excellent. Really appreciate the concise but informative thoughts and the conclusions that you make when utilising the comprehensive data available in AirDNA. Makes me realise how essential this data is if you want to raise your AirBnB business to the next level.

  • Jerry Jerry J

    This is all very good information but unfortunately it is limited to airbnb listings. For example in our area, I know the top earning properties are generating $25,000 to $35,000 per bedroom per year. The top performer on airbnb is only generating $14,000 which is more or less average in the market for full time operators. I am hoping AirDNA can incorporate data from other providers like VRBO and Homeaway which are the most popular listing sites in our area. If you are looking to invest, it is also a good idea to find local appraisers that are valuing these types of property. Bear in mind that a proper valuation should include the value of the furnishings, fixtures and equipment, the real estate (land, buildings and other site improvements) and the going concern or business value. AirDNA appears to be a good source but don't let it be your only source.

  • Moroni Urk

    Hello there. I really liked AirDna, but I'm from outside the US (Brazil to be precisely). If I subscribe to AirDna, do I have access to all the tools you showed in this video? even searching by zip code? Many thanks.

  • Xanthos

    This is a great tool with lots of impottant information. It's downside is that it is very expensive. For me to have access to the data for all the areas that I operate in I will have to pay 300 per month

Leave a Reply

Your email address will not be published. Required fields are marked *