By applying these conditions to a full 365 days, we’re able to calculate a revenue potential of $40,000. In the example above, you can see that the listing was available 248 days of the possible 365, generating We apply the ADR and occupancy rate the property achieved to 365 days, and we also factor in market seasonality, historical performance for that property, as well as the historical performance of the comparable properties. This is where revenue potential comes in. Most of these comparable properties will have had differing numbers of days available, so in order to analyze these properties equally, we need to look at them as if they all were available every day of the last year. When creating a Rentalizer estimate, our algorithm identifies comparable properties and uses their historical performance to start building estimated revenue, average daily rate (ADR), and occupancy figures. Revenue potential is a metric we use in our Rentalizer tool. Revenue potential is the figure a short-term rental property could have earned if it had been available to be booked every day of the last 12 months. A weighted average of these properties' historical performance gives you a Rentalizer estimate for your selected address. The properties are selected based on their proximity to the address geographically and how similar they are in their bedroom, bathroom, and guest count configurations. After you enter any address, our algorithm will search for up to 50 comparable properties within a 10-mile (15km) radius.
Rentalizer is a great tool to help you see the potential of a property as a short-term rental. AirDNA’s Rentalizer, our proprietary AirBNB investment calculator, creates an estimated revenue, average daily rate (ADR), and occupancy rate for an address based on historical performance data of comparable properties near to the address entered.
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