Curious about how to elevate your short-term rentals game by looking into the real market data? AirDNA Rentalizer is a tool designed to provide hosts with a data-driven edge. In this article, we delve into the question of whether AirDNA Rentalizer justifies its price tag and uncover effective strategies for leveraging its capabilities.
What is AirDNA?
AirDNA is an industry-leading data and analytics platform that provides comprehensive insights into the performance of vacation rental properties around the globe. Founded in 2014, the platform has over 10,000 active users, including property investors, vacation rental managers, etc.
Key tools of AirDNA
- Rentalizer (also known as Airbnb Profitability Calculator): estimates potential rental income based on property type and location.
- AirDNA platform: renewed platform and the major product.
- MarketMinder (sunsetted): provides analytics on pricing, occupancy rates, and revenue of properties in a given market.
- Market Explorer: allows users to compare the AirDNA Investor Score and key metrics of different markets.
The data-driven insights offered by AirDNA can be used to look for investment opportunities, understand the competition, and optimise rental income in the STR market.
What is AirDNA Rentalizer used for?
The AirDNA Rentalizer is a widely known and used data source and analytics tool within the AirDNA platform with a focus on the Airbnb market. It helps hosts/investors/property managers in the short-term rentals business to compare property rates:
- Annual Revenue
- Average Daily Rate (ADR)
- Occupancy Rate
- The effect of Seasonality on Profits
- Competitive analysis of other vacation rentals in your area
This is handy for short-term rental hosts who want to start out in the business, and predict the potential revenue streams in a specific location. Rental investors can also use Rentalizer to compare their own property to the competition in the area, and based on that make changes in pricing, amenities, etc.
To get more detailed statistics you can specify other costs through the Financial calculator. Here, you need to manually type in the Purchase Price. After that, you can add and adjust the following as well:
- Annual Operating Expenses (Management fee, Lodging Tax, Property tax, Cleaning fees, etc.)
- Startup Costs (Home Furnishing, Home Improvements, Closing costs, etc.)
Additionally, Rentalizer offers you insights into comparable rentals in the area of the searched property. The properties that are comparable are based on the number of bedrooms, and bathrooms they have.
Where does AirDNA get its data from?
AirDNA collects data mainly from Airbnb, VRBO, and HomeAway. Additionally, they have data partnerships with Channel Managers and property managers who provide them with data. Plus, they get data from their own users who upload their property information to AirDNA. AirDNA collects data from over 10 million properties in 120,000+ global markets.
Keep in mind: The database is refreshed in the first week of each month, so the data is not shown in real-time.
How accurate is AirDNA Rentalizer?
It is difficult to give a straight answer to this question, since it is a very debated topic.
AirDNA highlights on their website that their data is estimated to be 97.5% accurate for the active short-term rentals and 96.2% accurate for earned revenue.
Many users on the BiggerPockets Forum – the top US forum on vacation rentals – express satisfaction with AirDNA accuracy.
However, other users would argue this statement. We collected some pros and cons mentioned by users:
- AirDNA collects all the properties in the area you are searching for, shows you all your competitors in one place.
- It often underestimates the revenue, which in the end can be an advantage of yours.
- Contains up-to-date data about the Airbnb industry all over the world.
- Cons AirDNA does not necessarily compare your property with short-term rentals that are the most similar to yours (e.g., amenities might differ). This is more likely to happen in a smaller market with fewer options. It is especially important when your property is compared to more luxurious ones and therefore will show underperformance. So carefully look at the data before you jump to conclusions.
- It gives a generalised overview of the market based on averages, which may result in misinterpretation. Some say it overestimates which can have an unfortunate outcome if you base your investment only on their data. (e.g., total revenue includes cleaning fees, which can be misleading).
How much does it cost to use the AirDNA Rentalizer?
You can use AirDNA Rentalizer for free, meaning you do not have to subscribe to AirDNA in order to use the Rentalizer. Without a subscription, you can enter up to 50 searches per month and get the top-line projecting figures.
You do not have to subscribe, however you will need to Get started and create a free account in order to use the Calculator.
Top projecting figures you will be able to see:
- Annual Revenue
- Average Daily Rate
- Occupancy Rate
These figures are inclusive of cleaning fees and also assume 365 days of availability.
However, if you want to see the comparables, the Seasonal Revenue Forecast, and the Rentalizer Estimate History you will need to upgrade to the Basic Tier of AirDNA.
Airbnb Rentalizer features
AirDNA subscription cost
AirDNA in 2023 changed from package based pricing to price tier structure. Each tier has global access, but a varying amount of features. The Basic and Pro tires cost $15 and $50 accordingly. Here is the major features comparison for the Free, Basic and Pro tiers:
Pro tip: Get the local AirDNA insights for free inside Your.Rentals account. Import your listings and track occupancy rates, minimum stays or cancellation policies in the area or your listing.
AirDNA insights in the interface of Your.Rentals channel manager software
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Is AirDNA worth paying for?
Depends on your business aspirations.
- Many hosts have expressed that they only used AirDNA for a short period of time when they started out in the STR business. During the first few months of setting up their rental home they found it extremely useful in setting competitive pricing, amenities, etc.
- If you are an investor you might find it useful in the long run as well, since it will always give you an estimated overview of the real estate and the STR market.
How to use AirDNA Rentalizer?
- In the App’s search bar for property earning potential type in the property’s address. (zip code, street, house number, city, region, country).
- Choose the correct number of bedrooms, bathrooms, and guests your property can accommodate.
Once you type in the correct data about the property, you will see the following data generated by AirDNA:
- Annual Revenue
- Average Daily Rate
- Occupancy Rate
- Seasonal Revenue Forecast in monthly breakdown
- Rentalizer Estimate revenue estimate in monthly breakdown plus comparison with the previous year. Estimate growth/increase in revenue.
The data shows estimated revenue for the property in the next year.
Average Daily Rate:
The data shows the average estimated nightly rate for the bookings in the next year.
The data indicates the estimated percentage of days the property will be occupied the next year.
It allows you to calculate a more accurate data on your Operating expenses, Net Operating Income, and Cap Rate.
Seasonal Revenue Forecast:
It breaks down the estimated Annual Revenue for the next 12 months to show seasonality. If you hover over any given month you will be able to see the specific revenue range that AirDNA would estimate the property to fall into.
It allows you to see how a property is appreciating or depreciating as a short-term rental over time by hovering over any month in the last two-year period. You can see what the rentalizer estimate would have been for the property at that time.
It allows you to see how the property’s value goes up and down as a short-term rental over time. It shows the value in the current year and the past two years. This graph can be used to decide whether it is a good time to buy or sell an STR property.
If you scroll down you can see the total number of comparable properties that the rentalizer has been able to find. Usually the top 12 (in this case only 5) of these are the ones making the biggest overall impact on the projection figure at the top.
When you’re looking at your comparables you will see that it has a Revenue and a Revenue Potential figure. The difference between these is that the revenue figure is what we actually calculated for that property in the last 12-months based on how many days it was available during the year (Days Available). Revenue Potential is what AirDNA thinks the property could have made if it was available 365 days of the year. This number is also adjusted for seasonality.
Furthermore, the comparables are linked in which allows you to go to the listing and look at the property’s listing on the OTA. That means you can look for important factors that might have contributed to the listing’s good performance, such as amenities.
What is a good occupancy rate for Airbnb?
Speaking of occupancy rates, they are a key figure for STR hosts. This number shows your space’s appeal to potential guests.
A higher occupancy rate shows that guests are highly interested in booking your property. It also means that you found the appropriate ADR (average daily rate), you offer good/sufficient amenities, and guests find it worthy to book.
Accordingly, lower numbers show the need for some changes, adjustments.
In the world of STR business, a good occupancy rate starts from 65%. If this number goes below 50%, you might consider making changes to your listing. It can be your pricing strategy or as simple as the need for better photos.
At Your.Rentals our team is ready to help with optimising your listing.
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You can search for a city or a region within a city, you do not necessarily have to give a specific address to get approximate data from AirDNA. Of course it is better to use a specific address because the more accurate data you enter, the more accurate AirDNA can perform its calculations.
Yet, we have collected some examples in cities of bigger markets within Europe:
Rentalizer estimate for Paris, France
If you were to rent out a property in Paris a general estimate by AirDNA for a 1 bedroom, 1 bathroom, 2 guests apartment would be:
Airbnb Rentalizer estimate for Barcelona, Spain
If you were to rent out a property in Barcelona, a general estimate by AirDNA for a 1 bedroom, 1 bathroom, 2 guests apartment would be:
Airbnb Rentalizer estimate for Rome, Italy
If you were to rent out a property in Rome, a general estimate by AirDNA for a 1 bedroom, 1 bathroom, 2 guests apartment would be:
What is the most profitable Airbnb location?
AirDNA can assist you in finding the most profitable market if you look to invest in a short term rental. We did a thorough overview of the Best Airbnb locations in 2023. Check some useful statistics there.
AirDNA serves as an invaluable tool for both short-term rental hosts and investors. The depth of its insights provides a comprehensive understanding of the property’s potential performance.
Moreover, it allows for meaningful evaluation of the property value over time and helps identify the most profitable Airbnb locations. Plus, it gives an overall overview of the short-term rentals market around the world.
As the vacation industry continues to thrive, using tools like AirDNA can assist you in optimising your listings and making informed investment decisions. If you are not convinced, there are other similar databases available online, such as Mashvisor.