AirDNA's Hottest Places to Invest May 2023

Some thoughts about this latest report from AirDNA

So I'm a big fan of AirDNA, for many reasons. No, it's not "perfect", but its a really strong starting point for projecting income potential on a short-term rental investment. There is not an easy button in projecting income potential, there is a lot of nuance involved but AirDNA makes it so much easier! Before we get too far in, allow me to tell you why I use AirDNA.

Why I use AirDNA

1. They scrub data from both Airbnb and VRBO (many data clearinghouses do not, which means you are not working with the most inclusive dataset)

2. They provide historical data (5 years) so you can really assess trends over time

3. I like to see the Top Grossing Properties in markets I'm considering - I want to know what people are willing to pay in a market, and what makes a "Top Property" in that market

4. They've been around a lot longer that most data clearinghouses in our industry, which means they have more experience in terms of testing and interpreting scrubbed data to ensure its solid

5. Lenders use AirDNA data when you are applying for a DSCR loan. They ONLY use AirDNA.

Best Places to Invest in 2023

Every year, AirDNA releases a report early in the year "Best places to Invest in Short-term Rentals". The 2023 version highlighted for me how tight the STR industry has become. That report looks at the differential between cost of housing and average daily rate (income potential). Most of the ones on the 2023 list were small towns in the midwest (although number one was Fairbanks, AK). Small towns can't hack hordes of incoming investors, nor is there likely to be enough demand in those markets to sustain a rapidly growing STR infusion. Grab the "Best Places" report HERE

Hottest Places To Invest -

AirDNA JUST released their new "Hottest Places to Invest" list - a new report that gives insights into where people are buying that ADR is still strong. This is a more interesting list because it shows some markets that are probably more appealing. Check it out HERE.

Understanding the Data

The Head of Research at AirDNA talks about understanding the underlying sources of data whenever you are relying on data for an investment decision, and admits that even AirDNA data can't give you the nuance. This is why, when I work with clients, I push them to lean into understanding the nuance of a market - what are the unique price drivers? What amenities? Picking a true comp set - not relying on a data provider to pick it for you, is really important.

If you want to learn more about these two reports and here more about how AirDNA works, check out their podcast the STR DataLab - their latest episode talks about the two lists I just mentioned and some of the cautions about how to use them. Grab it HERE or wherever you listen to podcasts.

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Hey Boss! I'm Kate, owner/founder of The CEO Host. If you are interested in taking a leap into short-term rentals - or have some questions about your existing business, my goal - passion, and career, is to help YOU succeed. I've coached hundreds of folks getting started or looking to optimize, analyzed more deals (and duds) than I could count, completed thousands of hours of education and training, attended conferences... So don't be shy. A good CEO knows to bring in expert help - and that's what I'm here for! Lets HOP ON A CALL and chat!

Categories: : metrics, short-term rental investing