How to Use AirDNA as an Investor

What’s up guys, in today’s video, I’m going to be showing you how I use air DNA as a short term rental investor and how you can use it to to get the most accurate numbers possible when analysing your deals. And ultimately, just to figure out if deals are worth investing in. Now, I’ve talked extensively on this channel about why property analysis is so, so critical, and how most investors go in pretty well blindfolded when they’re investing in short term rentals. And you just don’t have to, you can avoid a lot of potential risk and make sure you’re getting way bigger upside. By just knowing the tips and tricks and strategies I’m going to share in this video, that’s going to show you how to use data from air DNA to analyse your investment properties. So let’s go ahead and dive over to the computer here. And let’s go through some of the main features of air DNA that I love the most when it comes to actually analysing properties for short term rental as an investor.

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So the first thing I love is you’re just going to basically go into the in the market, and the first place you’ll end up is this overview tab here, that gives you kind of a rundown of some of the averages, it’s not super, super helpful. But the one thing I do love is the number of active rentals that just tells you how many properties there are in that market, which if you’re going into a big city can give you an indication of how much competition there’s going to be. If you’re in other areas, I can tell you that there’s just not going to be a lot of data, there’s only maybe 10 or 20 listings. And so it’s just a good kind of baseline. I don’t personally pay too much attention as market grade because a lot of things don’t really matter. In my experience, it comes down a lot more to the deal itself and to the market that you’re in. Another thing I don’t love about this market score is that it factors in regulations, which are just inaccurate on air GNA is kind of the the easiest way to put it. But overall, some good stuff here you can see a bunch of different things like rental growth, that’s obviously good to see. We want to see amenities, things like that, what percentage of properties are available full time? What percentage are booked differential setting. So there’s all kinds of cool things that you can look at. So that’s pretty helpful, but really just kind of a baseline for starting out. Once I’m actually getting into the details I want to do this next thing I’m going to do is basically look at the differences in different sizes of properties. So I’m going to then compare that to the prices, the average sale price for those size properties in the market to see where I can get the biggest Delta essentially. So what I’ll do here is I’ll basically just come in, and I’ll do an export for each different property size. So let’s say for example, I’m looking at two bedroom, let’s just look at two, three and four bedroom properties for the sake of this. So I’m going to go ahead and look at all two bedroom properties, I’m just going to remove all filters aside from that. So I’m just looking at all the two bedroom properties in this market. So you can see it, there’s 129 in the market that I’m looking at here, and I can download the data for that, and then go on to three bedroom properties, apply that and we’re going to see there’s 299, I can then download that data. And then lastly, I can download the four bedroom data apply that you can see there’s 184 listings and download that. Now what I’m going to do with all these downloads is I’m going to compare, and I’m going to compare relative to the purchase price for that size property in this market to again, just see where I’m going to get the biggest delta. So I’ve set up a little macro, you can do that too, pretty easily. Or you can just solve the numbers manually, this just shortens the process for me a little bit. So I’ve got, let me see here. Oh, I kind of missed the last track. So yeah, 40, that’s going to be two bedroom, three bedroom, and then four bedrooms. So I’m just going to run the macro on all of these so that we can see exactly what I’ll do as a kind of starting point, when I’m analysing properties, is I want to know where I should spend the majority of my time looking at properties. If two bedroom properties, I know that the numbers aren’t nearly as good on them for the purchase price, then I’m probably just not going to spend much time looking at two bedroom properties. So you can see here that a really good example here, this is four bedroom properties. And let’s just go with the last year’s number and 75th percentile just for the sake of this example. That means for rent your properties are generating $110,000 for $80,000 A year is what a three bedroom property is going to generate on average. And then $54,000 A year is what you’ll generate on average for a

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for a two bedroom property. Now let’s just for the sake of it, I want to see if we see a kind of big jump going to five bedroom properties. And let’s download this one as well. And take a look at what we see. So if we run the same numbers here

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you can see now we jump up to 170. So that’s really what I was looking for is that jump that gap. So what you’d imagine is like if you look at these numbers you’ve got you’ve got a pretty well $30,000 Jump each each time you go up by one more bedroom, so you can

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See here $54,000 For a two bedroom, and then about $30,000 More for a three bedroom. And then again about $30,000 More for a four bedroom. And then when you jump up to a five bedroom, you can see that it jumps up by much more than 30,000. We’re about $60,000 increase there. So you can see there’s quite the big jump. And what I would imagine is that if we looked in this market and compare the average purchase price of a two bedroom, three bedroom, four bedroom five bedroom, that going up from a four bedroom to a five bedroom, we probably wouldn’t see a huge dramatic increase by just adding that one extra bedroom. But we do see. And when I say dramatic increase, I mean, the purchase price probably wouldn’t be dramatically different. But the amount of revenue you can get from just that one extra bedroom is quite substantial. So in this market, I would prioritise looking at five bedroom properties and larger to make sure that I’m making as much good return as possible, because that’s typically where the ROI is going to be. Again, I’m not actually looking right now at the average sale price. But that is what I be comparing to, to figure out where I can get the biggest delta. Now that doesn’t mean I’m not going to be able to find two bedroom, three bedroom or four bedroom properties that will get a good return on investment. But it does mean that it’ll be easier, generally speaking to find five bedroom properties that will get a better ROI. If there’s a bigger Delta on average, it just means that the average deal is going to have a better ROI when I’m looking at five bedroom properties. So prioritising looking at those properties is going to just make sure I’m finding more great deals. So that’s how I like to use it to start out. But then once you actually have a five bedroom property, the next question is how do I analyse that specific property and make sure I’m buying a property that makes sense? Well, I’d essentially do the same thing where I would pull up, let’s just close some of these tabs out. And so let’s say here, now I’m looking at five bedroom property, well, I’d want to look at the numbers on it on average, and I’d see, okay, if I’m analysing for a kind of reasonable scenario, I might assume that it’s going to be somewhere around 140 to 160, I like to be relatively conservative, you can see that every single year over the last five years, it’s trended upwards, which is great to see. But then you can see that, obviously, there’s it could pull back, and we want to be a little conservative. So let’s say I’m estimating maybe 140 $260,000. In a reasonable scenario, in a best case scenario, it could do 170, or 180, if it keeps trending upwards, and in a worst case scenario, it could go back to about 85 or $90,000. And so we really want to analyse and look at these numbers so that we can figure out what our cash on cash return is going to be in any of these different scenarios and make sure it makes sense. So that’s how I love using air DNA for running a specific property. But that is still just looking at the averages. So then the question from there is what like how close is the property I’m looking at to the average five bedroom in this market. And that’s why I really, again, love air DNA is that you can actually open the map up look at the area filter for just five bedroom and bid and larger properties like I’ve done here, and then look at specific properties to see how they compare to your property. So for example, this one here is generating $274,000 a year that might skew the numbers up. But again, we have 137 active listings in that data set. So it’s a large enough sample size, and the number shouldn’t be skewed too heavily. But you can see, well, hey, if I if I’m looking at a property that’s actually really similar to this one in terms of just the niceness the overall aesthetic, then estimating 170 might actually be below because this one’s generating $270,000. Whereas if I’m looking at a property that’s more similar to let’s say, one of the ones down here, that’s this one’s available for almost the whole year, 10 months of the year, and it generated $94,000. If I’m looking at something that’s similar qualitatively to this one is more similar to this one than this other one over here, then I may want to be pulling back my numbers a bit and estimating closer to 100 $130,000. Guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnb and short term rental properties, there’s a link in the description right down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb s. Now if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties. There’s actually another free training linked in the description down below as well. There’ll be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income managing other people’s properties on Airbnb. We’ve got some awesome trainings that are linked in the description down below. It’ll definitely help you out. When you sign up for the trainings. We’re also going to send you a few other tools and resources can

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pletely for free, just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below.

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Again, it’s just a really great way to get both the quantitative and the qualitative, to make sure my numbers are as accurate as possible. But as a lot of you guys know, it’s not just about the income, it’s also about the expenses. And one of the things that I see Miss investors making a mistake on and more often than not, is not backing out expenses, like cleaning fees, or just not doing it properly. The reality is the that a lot of investors, they look at occupancy as this kind of just irrelevant metric, that’s just kind of, we’re just going to take our best guess at it, when in reality, it doesn’t ultimately matter sure how you get to your income number in terms of occupancy. So what I mean by that is that if you get to $100,000 in revenue, then from an income standpoint, it doesn’t really matter whether you do that with 50% occupancy or 90% occupancy, at the end of the day, you have the same amount of income coming in, you’re just doing it in more or less days. But from a cost and expense side of things, it does matter. Because that higher occupancy rate is going to lead to more turnovers and therefore more expenses to pay out your cleaner, there’s probably going to be more activity to pay for your gas communication, things like that as well. So it’s really important to factor that in. So that’s why I generally will jump over to the occupancy tab and I’ll see what I should be expecting for an average occupancy rate so that I can accurately estimate my cleaning fees. That’s another thing that I like to do is just call around the cleaning companies in the area, see what the average rate is going to be and then factor in how many cleanings I’m going to have in an average month based on my estimated length of average stay and the average occupancy rate in the area. So I can get all that data from right here on the occupancy tab, which makes it really, really simple and easy to accurately analyse my expenses. Now the other thing I like to do as well is come in to top properties. And I like to just kind of look and see this is just honestly helpful for me as an investor to figure out how I can make my property perform even better, because the game I love to play is finding properties that are total no brainers because even in a worst case scenario, they’re still going to make sense. And that it’s going to be really easy for them to hit numbers that will generate me a 50% or greater cash on cash return. Once I’ve found that really great deal, I know that it’s going to be pretty easy for me to make a return on my investment, pretty much no matter what I do, I’m gonna get a great return, because it’s going to be just easy. I just bought the right property at the right price, that it’s not an uphill battle from here. But then the game that I get to play is how do I make a great investment and outstanding knock out of the park investment. And I do that by just trying to play the game of making the the income much much more significant without spending a whole bunch more money. So what I like to do is then jump in here and see what amenities what different features are going to really make the property stand out and generate a better ROI overall. So if I see that a lot of the top properties have for example, hot tubs or have kayaks or have fire pits, and I’ll consider adding those things to my property as well to make it stand out even more. It’s also just great to be able to see what the top properties are doing in terms of their listing, their performance, their titles, all that stuff, because all that stuff can be helpful in just helping you to perform better and be a better host overall. So that’s some of the kind of most basic ways that I use air DNA to analyse properties for investment and make sure I’m making the right decisions. If you have other ways that you like to use it or other tools overall that you’d like to use then let me know in the comment section down below. If you liked this video and you found it helpful and you want more on this topic, then let me know in the comments and give this video like just hit that thumbs up button down below the video. It really helps me out with knowing what kind of content you guys enjoy and get value from and also getting these videos in front of more people. Last but not least before you leave here, just make sure you hit the subscribe button so you can stay up to date with the two new videos we post every single week. All that being said, thank you so much for watching. I’ll see you in the next video.