AllTheRooms is the world’s first vacation rental search engine and expert in vacation rental data. They combine helping people find their perfect vacation rental with helping homeowners, property managers, investors and governments understand their local vacation home markets.
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As short-term rental investor or property owner, having access to data is a critical element of being able to make thoughtful decisions and reducing your risk.
With traditional long-term real estate market, estimating what a particular property can generate from rent is fairly simple as that information is abundant and public. Short-term rentals would oftentimes be considered a tad more unpredictable because the data to analyze them would be harder to fine.
Fortunately, these days, the situation has changed thanks to a handful of tools that scrub data on all short-term rentals in every market, slice and dice it, and present it to you in a meaningful way. In fact, these days you can gather information on all of the other short-term rentals in any given market, get a handle on their occupancy, average daily rates, total revenue on a monthly basis, overall market size, and much much more.
Armed with this information, you can confidently predict how any particular property in a specific neighborhood can perform, as well as compare markets against each other to determine which one may yield a better return on your investment.
There are 3 tools in the market that we’re aware of that provide you with comprehensive data on various markets around the U.S. and Abroad -- AllTheRooms, Airdna, and Mashvisor.
In this review, we wanted to focus on a specific tool called AllTheRooms that can provide you, as an investor and a short-term rental host, with the data you need to make your decisions.
Since starting to use AllTheRooms, we have been very pleasantly surprised by their offering. Their data and their interface is really top notch and makes it very easy and intuitive to jump right in without much prior training.
In the next few sections, we’ll take a look at various functionality of the tool and how you can make the most of it.
When you open a view for a particular market, you first end up seeing this screen.
Available Supply: The information that we pay attention to initially is the Available Supply - which tells us how many listings are present in that particular market. It’s not an exact science, but if you’re seeing too few listings for a city (say, under 75), it may tell you that both the supply and demand are fairly low. If you’re seeing tens of thousands of listings, it would indicate that the market is competitive but may be lucrative if you can have a strong product.
If you click on the Learn More button underneath, it’ll show you a more comprehensive trend over the last 2 years.
This can be very helpful to see directionally where the market is going. Underneath the total number of listings, you can see if that number is increasing or decreasing. Since this review is written at the time of COVID-19 pandemic, it’s not uncommon to see a decline in listings in most markets as hosts decide to pull their properties off the market or convert them into long-term rentals.
As a whole, a healthy market will have a steady increase in listings over time. If it goes up very quickly, it may be an indicator of investors rushing it and oversaturating the market -- Nashville can be an example of that. If you see a sharp drop (unrelated to the first half of 2020), it could be related to some regulatory change that makes it more difficult for hosts to operate. Either way, this is useful as a barometer of where things are trending.
Market Revenue: In addition to knowing the total available supply and it’s trend, it’s also very helpful to understand the overall market size.
This is a common exercise people do when they are thinking of starting a business -- considering what the total addressable market is. If you’re planning to grow to a certain size, are there enough people in the market that will be there to buy what you’re selling?
For example, if your goal is to acquire a number of properties in a single market to generate $50,000 per month in revenue but the overall market size is only $100K per month, that would indicate that you would likely need to either grow the existing market or take away 50% of it to meet your goal. Doable? Maybe. Likely? Probably not.
In this particular example, you can see that the market size for Columbus hovered between $1M per month to $2M per month on Airbnb and then took a bit of a dive during the COVID-19 timeframe.
So, under normal circumstances, if you’re looking to do $50,000 per month in revenue, that means that you need to capture about 2.5% to 5% of the overall market as it is today to meet your goal. That is much more realistic.
In other words, you want to ensure that the market is large enough for you to be able to grow and expand in. This is especially relevant if you’re considering smaller cities where you are looking to understand what the overall short-term rental demand is.
Occupancy Rate: The next piece of information we like to look at is the Occupancy Rate. At first, it’ll show you the overall Occupancy Rate for that market for that month, but if you click on the Learn More, you can get a more complete picture over the previous 1-2 years.
Since Occupancy Rate can vary dramatically from market to market, a single number isn’t too useful to us -- but a picture of the occupancy trends over a course of a year is incredibly helpful.
By default, you’ll see the Occupancy Rate over the last 24 months, which will tell you two things:
Many markets in the U.S. will show very different occupancy rates (and average daily rates) depending on the season. So as you’re considering what your revenue forecast should be, it’s wise to take into account the fluctuations from month to month.
That aside, the other thing you just want to make sure is that the occupancy for specific months year-over-year is either stable or increasing (although with COVID-19), the 2020 will throw a wrench in those long term trends.
Comparison Tools: What’s really great about AllTheRooms is that they make it very easy to compare different variables. For example, let’s say that we want to plot the Occupancy Rate with the total Available Supply to see if the general Occupancy gets lowered as the total Available Supply goes up.
Voila -- just mark the two variables under Data Analysis and you can see it instantly.
You have a number of different variables you can select from, such as: Daily Rate, Occupancy Rate, Available Supply, Revenues, Market Revenue, Nights Booked, Average Daily Rates and Booking Lead Times.
While you can only compare up to 2 at a time, it’s well worth to play around with this to get a complete handle on the market.
Up until this point, we were using AllTheRooms to look at a market from a bird’s eye view to see the overall trends.
However, once that is done, the next step becomes drilling down further and figuring out the specifics for a particular property. Oftentimes, we need a tool like this to better understand how a particular properly is likely to perform on the market.
So, in this case, let’s say that we are looking at a 4-bedroom home that we can either rent out as a single unit or by individual bedroom and see what kind of data we can pull up.
At the top of the screen, there are a few filters that allow you to slice and dice the information based on the type of a listing.
This, in our view, is one of the critical benefits of using AllTheRooms. After all, the data you derive is only useful if you can compare apples to apples. Performance of a 1-bedroom unit would be drastically different than performance of a 4-bedroom unit, so you really need to compare similar types.
Here you can filter the data by Private Room or Entire Home with a specific number of bedrooms and all of the data gets adjusted accordingly. For example, if we look at Entire Homes with 4+ bedrooms, we’d see the following.
The preliminary view shows you the Occupancy Rate, Average Daily Rates, and average Revenue specifically for 4+ bedroom private homes.
You can then use the additional filters to dig down even further.
For example, the following view would show you the Occupancy Rate compared against Total Available Supply and plot it over the previous 24 months:
In the view above, we can see the competition heated up as the number of listings increased and the occupancy dropped. During COVID-19, we may want to better understand if this is related due to the market itself shrinking or other factors, so we can further expand on it and view the Total Market Revenue:
This sort of filtering is great for investors who are considering what type of a property to buy, as this way, they can figure out what is likely to perform best or what type of properties are most in demand.
So far, AllTheRooms has shown to be a robust and very easy to use tool that looks at the performance of other short-term rentals in any given market to provide you with helpful and easily digestible data.
What can you do with it?
Well, the first use case is, of course, to better understand a specific market and see how healthy it is. You can see whether the overall market is growing, what the competition is like, how occupancy changes on a seasonal basis, and so on.
The next valuable use case is to compare different markets against each other. If you are thinking of investing in a new market and trying to decide exactly where, this could help you compare them to each other. For instance, you could use the Where to Invest - Markets for Short-Term Rentals Database by BuildYourBnb to get an at-a-glance view of the top 320 markets and then use AllTheRooms to drill down on the top 5-10 that you’re considering.
You can also use AllTheRooms to determine what kind of a property would do best in any given market. You can, for instance, compare a 2-bedroom vs. a 4-bedroom; private room rental model vs. entire home rental model, and so on.
During the COVID-19 pandemic, we’ve written previously here that not every market gets affected by the pandemic equally. Some see a sharp drop in bookings but recover, others such as more remote vacation rentals see an uptick in occupancy and revenue as people seek to get away from the cities. So you can use the 24-month view in AllTheRooms to track the performance in 2020 and see how it’s trending for any market you’re considering.
Put together, this information is invaluable if you’re thinking of purchasing a property or converting one into short-term rentals or even if you want to compare the performance of your own existing property to competition.
The service runs between $4.99 to $14.99 per month for a single market, depending on the size of it (plus a model setup fee ranging between $19.99 to $79.99). It’s somewhat cheaper than the other tools we’ve seen on the market, but delivers just as much value.
If you’re looking to try it, you can use our link here or just go directly to their website.
For full disclosure, AllTheRooms has reached out to us and provided us with access to their tool so we could properly evaluate it and they may also provide us with minor compensation if you decide to sign up for the tool by following the links in this article.
