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How to generate insights beyond AirDna.

To determine the best neighborhoods for investing in short term rentals, we utilized software that considered the expected Gross Rental Income (GRI) and average property price. GRI can be easily calculated using tools like Airdna, Alltherooms, and Mashvisor. Our software analyzed this data to prioritize which neighborhoods would provide the best return on investment. Additionally, we sampled 10 properties in Zillow or a similar website to calculate the average property price per property. By combining these factors, we were able to rank neighborhoods by a “GRI to Price”:

Once you have selected one neighborhood with strong tourist demand and reasonable purchase prices, the next step is to search on Airbnb for high-performing properties and to interview their host to understand how to compete in this market. When researching the Palermo market I focused on interviewing hosts that tuned properties with a 4.9-star review score or more that have been booked one month in advance and get multiple reviews per month. The key here is to select hosts that run their own property and to avoid professional property managers as they are less inclined to share information. You can sort out property managers by clicking on the host information on Airbnb and verifying that this host only manages this one property.

Does interviewing the host require traveling to the city? No, it doesn’t. I would rent the properties for one or two nights and have a phone conversation with the host. As of today, I do not stay at every place we book. My preferred approach is to call the hosts and mention that I’ve noticed that his property is outperforming other listings in the area and that I’m looking to purchase a property in the area and wanted to ask him for a few tips. After a 10 or 15-minute conversation, you will have a clear understanding of the guest profile that rents there and what makes the property outperform others.

Establishing a relationship based on empathy with other hosts in the area can take you a long way. It will give you a clear understanding of your ideal guest profile, including their needs and preferences. For the first property we purchased in Argentina, we interacted with six hosts and established a clear guest profile. Our ideal guest was typically a couple between 25 and 40 years old, from neighboring countries like Brazil and Chile. They were staying in Buenos Aires for three to four nights, and were motivated by the world-renowned restaurants in Palermo at night. Additionally, they preferred staying in the neighborhood due to its proximity to the Linea D subway line, which connects to popular tourist attractions in downtown Buenos Aires.

After conducting these interviews we concluded that to ensure higher than average occupancy rates is for your apartment to be located within eight blocks of the metro because this guest profile doesn’t rent a car and prefers to take the metro to discover the city.

Interviews have been the single most important element when trying to gain insights about each neighborhood. When setting up, our first syndicate to use other people’s money to invest in short term rentals we continue to rely on the experience of other hosts who know how to compete in a market where we know little or nothing about. The hospitality industry and short term rentals presents an advantage to other asset classes for an inquisitive investor, as it’s normal for hosts to speak english and engage in a conversation with you.

Now that you have selected a neighborhood with good fundamentals for investing and have interviewed successful hosts from that area, it’s time to find the right property to purchase. You should clearly define where in the neighborhood to search for properties and what makes that property stand out on Airbnb. The best advice I can give you is that once you decide where to look for your property and what characteristics that property should have, do not stray from that. Each time you tradeoff any of those elements, your probability of gaining full occupancy decreases.

After conducting a thorough analysis and a round of interviews, you should have a clear understanding of the customer persona you are serving and be able to delimit your search area for apartments. By gaining these insights, you will be able to make more informed decisions about where and what type of property to purchase, which will help minimize mistakes that could potentially damage your occupancy rates in the long term. It is important to understand the needs and preferences of your target audience, as this will help you tailor your marketing efforts and provide a better customer experience. Armed with this knowledge, you can confidently invest in properties that meet the specific needs and desires of your target market, ultimately leading to higher occupancy rates and increased profitability.