🌍 How to Pick An Airbnb Market 🏠
Such an important question - How to pick a market for Airbnb, short-term rentals?
This blog is a little more specific to vacation rentals - like mountains, beaches, golf courses, and national parks.
Providing you with ideas on how to pick an Airbnb market.
WHY?
Because I'm seeing these make the highest returns right now (30-40%CoC) - the type of returns that helped me leave the corporate job that I was sick of last year and
Because they are an incredible lifestyle business. You can have a vacation home purchased with a 10% down that will pay for itself. Essentially you can use this property whenever you want to but also make lots of money.
I start with a few basics - I start with 3 things:
Is this an area I like going to? This is because I don't want to dread going to this place. If I like going there, there's a better chance I will check on things more often.
And what is the local restriction for that area? This may be obvious but you need to look at the city/county website to see if nightly rentals are legal. And what type of permits you will need to run your business. The last thing you would ever want to happen is to purchase a property and find that nightly rentals are illegal
Is it in the same time zone? This is just to make life easier. Especially if it's virtual. I want to be able to get there quickly if needed. And if I'm scheduling with vendors - specifically cleaners - it can become annoying managing schedules. (this is a small thing but I follow it)
if it’s a place I like going to, in the same time zone, and is good on restrictions then I move to phase 2.
In Phase 2 I'm starting to get an idea of what is bringing people to this area.
Ideally, I'd like to know what is the type of person coming to this area and how long they will be here. This will help to determine the best type of property and where it should be in the area.
That’s just about a little googling (travel), going on Facebook groups, and maybe calling a local realtor.
One of my favorite free resources is Google Travel.
I found it when I started using it to book my flights but it also has tons of landmarks with reviews and attractions. If a place has a lot of reviews, there's a good chance it’s a place someone likes going
It’s also really important to know how far the properties you are looking at are from these landmarks like parks, bars, and restaurants. For any property, I am always tracking in google maps and Redfin how far potential properties are from specific landmarks. within 30 min is usually good.
Next, I’ll start playing around with Airdna and Airbnb side by side.
Airdna is an awesome tool for analyzing STRs.
And I believe it's extremely accurate. This is because it’s pulling information directly from live properties.
You can look at things like occupancy, pricing, and top-performing neighborhoods, and even get projected numbers for a specific property address about how it would perform on Airbnb.
This is a free version (which is awesome) and probably good enough to do 90% of the research but if you are more serious and ready to buy then I would recommend purchasing one of their monthly plans and using it for as long as you need it.
You can always cancel when you're done or just export the data you need.
There are some links in the summary of this video I recommend you check out. I am an affiliate for Airdna but I was using it way before that - it's just an awesome tool. If you use the link to the summary it helps support me and this channel
What I am looking for is how are the top properties performing. If you run your property well you should expect to be a top-performing property. We are not getting in this business to be at the bottom or even average. We are in this business to make money and run it as professionally as possible.
So these numbers are a nice starting point.
When looking at comps on Airdna I’m looking at this:
How booked are their calendars
what are they charging
What features are needed
What is not needed
I recommend starting a spreadsheet to just manage a few top comps and how booked they stay at what price for the next 10, 30, and 60 days out. You can cross-check the pricing they have with what is on Airdna if there are any discrepancies
If you guys want me to run through my spreadsheet of this, just drop a comment below saying "analysis video" and If people want that, I will make a separate video.
Phase 3 - Going to a field
Okay, we have pretty much done all the back-end work needed. And now you're ready to get in territory to speak to more people locally including a broker/property manager.
You may or may not use these people, but regardless, they can give you lots of information on the area potentially if you are out of state.
You can find pretty much all of your local resources from Facebook groups, googling, and messaging hosts on STR sites and Zillow.
I use templates for each person I reach out to just to save time but you are basically just going to be starting a relationship and introducing yourself letting them know what you are trying to do.
They will also be able to validate your numbers and help you with potential restrictions
If you are going out of state, it’s best to schedule a few meetings/showings with these people if they are up for it and have properties available.
When you go on the trip it’s also a good idea to stay in a few Airbnbs. This is research. You are trying to figure out what makes them good and what they have in your property that you will be replicating.
Its also a good way to build relationships with other hosts in the area who could potentially manage or co-host your property.
While you are in territory you also want to speak to as many locals as possible. This includes businesses, police, and people on the street. This is so you can ask questions and feel out what they are seeing.
The last step: Start Analyzing Deals and Making Offers.
