Pro: Extensive data, easy-to-read layout, extensive historical rent data
Con: High monthly fee
If you haven’t found an area to research, you can start with AirDNA’s best places to invest list. They’ve generated a top 25 list for small to larger U.S. regions. Using their database, they’ve calculated scores for rental demand, revenue growth and investability for each region. Rental demand considers account occupancy and supply increases. Revenue growth looks at revenue over the last twelve months compared to the twelve months prior. Investability shows yield after property purchase and operating costs. AirDNA then gives its own AirDNA score that grades the region for overall potential as a short term rental.
Pro tip: Value investing relies on buying undervalued assets. AirDNA’s revenue growth uses recent twelve month revenues versus prior twelve months growth. Sort the lower revenue growth regions from lowest to highest. Research the lower growth regions and try to analyze if any one-time event or anomaly caused lower revenue for this past year. If that region encountered a random event, it may actually have better revenue growth than AirDNA shows. That means it’s undervalued and could generate higher appreciation and rental gains in the future.
If you have a property or area already in mind:
Now that you have a general idea where to buy, you can use AirDNA’s research tab to pinpoint your short term rental data. Click the research tab and you’ll land on the overview page. AirDNA shows you general short-term rental data for the area, such as occupancy, rates and revenue. Additional fields include rental channel (where short term operators list their properties), distribution of rental sizes in the area, rental growth, rental activity, rental settings and top-performing property managers.
The metrics on the overview page give you a general idea of the area. The data is useful for beginning to understand the area. However, you really need to drill down on your property. That means comparing apples to apples. That means finding similar rent comps (comparables meaning properties that AirDNA compares to yours), collecting their metrics such as average daily rate, occupancy, etc. and using it to pinpoint short-term rental data for your property.
Let’s say you have a two bedroom property. In each section of the overview tab, i.e. occupancy, rates and revenue, you want to change the bedroom settings to show two. The results will give you exact stats for two bedroom homes. This stops AirDNA from giving you inaccurate trends for your property type.
AirDNA’s MarketMinder compiles short-term rental data across AirBNB, VRBO/HomeAway, and Booking.com. All three services focus mainly on the short-term rental market. That means AirDNA’s estimates may be more accurate than other services.
One thing to keep in mind. AirDNA pulls in Airbnb rents which include fees like platform fee, cleaning fees and taxes they collect. That means AirDNA’s average daily rents may be inflated from the net rent you actually get. You’ll need to figure out Airbnb’s platform fees and subtract them from AirDNA’s estimates to get a better rent estimate.
AirDNA’s estimate may also be inaccurate in another way. You’ll need to consider your short-term rental’s location. After all, you’ve heard real estate is “location, location, location.” AirDNA won’t know if your home is close to any amenities like the beach, a college, downtown, etc. Proximity to the beach could have a significant increase in daily rent. Being further away inland may have less appeal and reduce the rent you can get. These attributes, unknown to AirDNA, require you to further research.
One way to get an even better rent estimate is to go into the property’s profile, click on the rental comps that AirDNA shows and see how they compare to your home. Click through on each comp and note their location on the map, their features such as bedrooms and baths and other amenities that renters would look at. This is how appraisers value properties and the same principles apply to investments and deciding daily rent.
AirDNA’s rent comps also help you analyze the competition AND show you how you can make more money. Look through the rent comps. Look at the higher priced rent comps and make a spreadsheet. Find which amenities other landlords highlight in their ads. Perhaps it’s an ocean view, their modern furnishings, etc. You should be asking yourself: what appeals to short-term renters in this area? As you fill in these knowledge gaps, you can then improve your short term rental to get top dollar in your market.
AirDNA pricing:
AirDNA offers multiple levels of price plans for investors, owners and real estate professionals.
For hosts, investors and owners, consider the neighborhood plan starting at $12 per month. You’ll have access to your very specific neighborhood.
If you are still searching for investment properties, consider either the city and state plans. City plans start at $12 per month. State plans start at $179 per month.
Keep in mind though, AirDNA prices their plans according to the number of short-term rentals in your market. Basically, the more rentals in the area, the more data they collect and the more AirDNA charges. As an example, Orlando, Florida costs $12 per neighborhood, $40 per city and $300 for the state plan.
You can cross-check data from AirDNA with competing services such as Mashvisor and Roofstock. The more information you have, the more accurate you can project your return on investment.
