STR Analysis – Running the numbers

It’s an age-old debate about investing, it is an art, or is it a science? When it comes to the science, good investors have data. One way to get data is to go to Airbnb, VRBO and others, search for properties, look for ones similar to what you are seeking and gather rate information firsthand. There you can read reviews and get some additional insight as to the property and its setting.
With a strong demand for data, a number of companies now provide investors insight through subscriptions to their databases, some will even give you free samples. Here are a few STR analytics firms that my clients have referenced:

• AirDNA: Tracks performance of STR properties worldwide to help you make the most against your competitors. Also has tools to help you assess market opportunity before you buy a property
• AlltheRooms: A suite of tools that claims to provide everything a to be a successful host. Where you can analyze your market, track your competition and be a better host.
• BnBCalc: A platform with revenue projections, short-term and long-term rental comps, financial summary and estimating tools plus calculators for tax deductions and more.
• Price Labs: Software to help with pricing for your STR business, factors in competition, nearby events and more. Results tie directly into various platforms
• STR Insights: Subscription service with access to the revenue, occupancy, average daily rates (adr), property values, destination types, individual property revenue metrics and their listing links, and estimated ROI by market.
• STR Search: John Bianchi’s suite of training and data analytics tools so that you will “Never Buy an Unprofitable Airbnb Again”
• Wheelhouse, Dynamic STR Pricing: Wheelhouse tool that focused on successful pricing. Some have reported using it as a tool to help in viewing the potential results from an area.

When looking at the data, it is important to understand that not all rental properties are listed in these data sources because not all rental properties are listed online. The vacation rental business in the Poconos has been a viable business for more than 50 years, way before STR became the buzzword. Drive into any of the large communities and you’ll see real estate offices by the main gates. A number of firms offer property management service and for privacy reasons they do not always put their customer’s rental properties online. Additionally, a number of vacation rentals are handled through private transactions, so what you see from the data providers is not all there is when it comes to income opportunities.

Another skewing factor in the data is the seasonality of an area. While many people in the Poconos do rent year-round, not everyone does and some may rent for just a season due to personal preferences. A vacation home in close proximity to a ski resort might rent for the entire ski season (10-12 weeks), those adjoining state game lands might rent for the hunting season and some may even rent for a just a peak month, or the entire summer. This means a property might only be listed as available as STR for a part of the year. These mid-term (seasonal) rentals may not be listed on the booking sites and therefore may not be picked up by the data services, and therefore a property may have additional rental opportunities that what the data provider says.

There are a variety of coaches who can provide you with additional resources and tools.
The Real Estate Robinson’s have a nice introduction to STR Analysis Video You might also want to consider Mastermind groups, several of which have conferences and face to face training as well as their online presence. Several of my clients have come through Make Sjogren’s Short Term Rental Secrets, others from Bill Faeth’s Build STR Wealth and still others from Dr. Rachel’s Luxury Short Term Rental Academythere are more.

Another piece that could make a huge difference in STR Profit and Loss is financing. Purchase price is one element of the numbers, estimating income another, the cost of operations yet another and then there is the cost (and terms) of money to acquire the property. In recent years, STR Financing has grown beyond the vacation home with rental option (second home loans) and DSCR Loans have become pretty commonplace. To catch the latest trends and learn more about loan options, check out the STR Home Financing Podcast.

Investing in real estate has risks and you should always thoroughly research any opportunities that come your way. In another article, Beyond the Numbers in Poconos STR Investing we discuss the challenges that come from over dependence on third party data. For most, STR is much more than just investing, Running Short-Term Rental is Running a Hospitality Business. The Poconos are a popular vacation destination and looks to be that way for years to come. If you are interested in buying a property in the area, there are many options available.