Download the Amenity Evaluation Checklist here:Â https://corzly.com/short-term-rental-amenity-checklist/
Not every amenity pays for itself, and the ones that look great on a competitor’s listing might do nothing for yours. This isn’t about trends or gut instinct. It’s about data and real ROI. In this episode, we share the exact framework he uses to evaluate any amenity before spending a dollar, so you can stop guessing.
- How to use AirDNA to compare listings with and without a feature: the data reveals your actual revenue opportunity before any money changes hands.
- Why a 25% revenue lift from a pool might still be the wrong move.
- Not every amenity shows up cleanly in the numbers, but photo value is real.
- What Orlando teaches every STR investor about market saturation.
- The five-tier amenity framework.
The right amenity in the right market can transform your numbers, the wrong one ties up capital for years. Tim gives you the framework to tell the difference. If this episode helped, subscribe and leave a review. It takes thirty seconds and helps more hosts find the show.
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I get asked all the time, “Tim, should I add a spa to my short-term rental?” “Tim, should I add a fire pit to my backyard?” “What about a pool? I know they’re expensive, but is it worth it?” The good news is you don’t need to guess when it comes to wanting to add an amenity to your short-term rental. There is data out there that helps us make that decision, and today we’re gonna walk through that whole process to help you identify if you should be adding amenities to your property. We’re gonna break that all down on today’s episode
welcome back to the Short Term Rental Riches podcast. I’m happy you’re here again. There’s a lot that has changed in the short-term rental industry. It used to be you just threw up a property and people rented it. I know those days are gone. And now what people are doing is they’re making their short-term rentals a destination.
They’re adding all kinds of amenities. They’re spending lots and lots of money. But does spending all of that money actually make sense?
Maybe. It depends.
Today we’re gonna break all that down. Let’s just go ahead and get started, and it starts with the numbers, as it pretty much always does when it comes to investment decisions
There’s lots of data tools out there. Take your pick. AirDNA is one of the industry standards. It could be trusted, you could say, more than some of the others. But really, the trust from data comes in a mass amount of data. If you only have a couple pieces of data to compare something to, then you can’t trust it as much as 1,000 listings worth of data.
So that’s one of the first things you need to consider. If you have amenity that you’re planning on adding, let’s just say it’s a pickleball court, but you don’t have a whole bunch of other properties in the area that already have pickleball courts to compare their potential revenue with yours, well, then you’re definitely, I don’t wanna say risking, because it could be that you have, uh, a really good potential there, but there just isn’t a lot of factual data to go off of
But when it comes to more standard type amenities, there is a lot of data to go off of. So let’s say you’re considering adding a pool, or you’re considering adding a spa, or even a fire pit.
All of these are available as filters on AirDNA. So what do you do? You pull up a market on AirDNA. It doesn’t cost a whole lot for you to get this data, and it’s definitely worth it if you’re planning on spending thousands of dollars to add some sort of amenity. Pull up your comp set and filter by the properties that have these amenities and the ones that don’t We had a partner join us recently and he said, “Tim, should I add a spa?
I know there’s a few other properties in my area with spas.” And I said, “Okay, let’s find out really quickly.” So I jumped on AirDNA, I plugged in his address. I saw that there were over 120 listings for his area. I clicked the little spa amenity filter, and over 100 of those fell off the comp set, meaning there was only roughly 20 out of the 120 properties that had a spa.
And when it came to the revenue, this is for active properties, you want to make sure that you also check that box to make sure you’re not looking at properties that aren’t actively listed throughout the year. But when it came to this specific property, the properties with spas were earning almost twice as much
So that’s the first point. You need to find the data first. The more potential listings you have to pull from, the more you can trust that data. If it’s amenity that doesn’t show up with these data tools like AirDNA, well, then you need to go manually through Airbnb or VRBO and find other properties in your area to compare with
You can then find those same properties on AirDNA to get an estimate of their revenue. And even though it’s not highlighting that specific amenity in AirDNA’s built-in features, you know that that property already has the pickleball court or already has the private lakefront dock
From there you can run the numbers, you can get the potential revenue lift. And that brings me to point number two. Once you’ve found the potential revenue lift, you need to compare that with how much the cost of the amenity actually is. Let’s say you were thinking about adding a pool because adding a pool would add around $10,000 a year to your annual revenue.
Well, if that pool costs you $100,000, then that’s gonna take 10 years to pay that back. Is that really an investment you wanna make?
That of course depends on your finances. There is a little side benefit to adding amenities aside from a potential revenue lift, and that is that you may have some potential tax deductions. Check with your CPA. And you’re also adding value to your property, right? A property with a pool is usually worth more than a property that doesn’t have a pool
So run the numbers. The numbers always tell us what to do. There is a lot of variation between prices out there, though. So in our example, when I was speaking with Kevin and said, “Hey, I think you should add a spa because you can earn almost twice as much based off a pretty good sample set of data,” it doesn’t mean that Kevin needs to go out and spend $20,000 on a spa.
Remember, if you have an amenity that checks the box, well, then it checks the box. And if someone’s looking for a property in a specific area with a specific amenity, they’re gonna check that box, and then if you show up, you’ve got a good chance. Now, we need to make sure we’re setting the right expectations, though, right?
If someone checks a box for a spa and they show up and it’s a little kiddie pool that’s inflatable, that’s a lot different than an actual spa, right? But I think we all know there’s a big variation in cost, especially the, the more expensive the amenity gets, the more variation there is in cost. You can have an above-ground pool that you put a deck around, for example.
Maybe it costs you $20,000. Or you can go all out and have an in-ground pool with landscaping and water features, and you could spend $200,000. It really depends on your budget
But keep that all in mind before you actually add that amenity expecting that potential revenue lift.
A third thing you wanna consider, and something that I think most people are probably leaving out of the thought process, and this is really, really important. This is how much value that amenity could add to your photos, not to your property, not to your potential revenue lift, but to your actual photos.
Some amenities might be a lot less expensive to put in, but they make for a really great photo. So think of a small fire pit, and maybe that’s literally just some paver stones around in a circle and a few chairs. But at night with some stringing lights and a nice flame coming out, that makes for a really good photo, and that might sell your property even though the amenity itself doesn’t cost that much money
a fourth thing you wanna consider in your market before you decide to add an amenity is how many people already have that amenity? In other words, is this just an amenity that people are going to expect when they rent my property? I just recently invested in a property in Orlando, Florida. It happens to have an in-ground pool, but guess what?
So does basically every other property in Orlando, Florida. So is that really giving me an edge? No, not really.
If you look at the numbers on AirDNA, you’ll find that basically all the properties have pools already. And so if you were to add a pool, you’re not gonna be earning substantially more than the other properties that already have pools, right? It’s really just something that the guest is already expecting
Now, if you’re in a mountain area and everyone’s expecting mountain views, but then you also have a pool too, that’s when you can probably find some really good potential revenue lifts.
So in other words, is the amenity that you’re looking at a baseline amenity? People are already expecting it
If it is, it’s probably not gonna move the needle too much
So I know there’s a lot of data out there to help you really decide what makes the most sense. Let’s kind of break these amenities down into tiers. First of all, there is a tier that you actually can’t buy unless it already came with your property in the first place. I’m talking about amenities like an oceanfront view, right?
You’re never gonna move your property from three blocks back to oceanfront. But you could have spent four times more money for the oceanfront property, even when the properties three blocks back are only discounted 10% when it comes to their annual revenue. So make sure you run those numbers. That’s often the case.
I’m down here in southern Brazil currently, and we live very close to the beach, but we don’t live right on the beach because I didn’t want to spend an extra 20 or 30% to move over 50 meters. Now, up to you, but again, as an investment, you gotta look at the numbers. The numbers most always tell you what to do So that’s the first tier.
It’s, it’s a tier that you can’t really buy unless it came with the property.
The next tier would be the high cost tier, things like putting in a theater in your garage or adding in a pool, things that really cost a lot more. Again, consider if they’re adding value to your property, but make sure you know the potential revenue lift so you can calculate your ROI or the amount of time it’s gonna take to pay back that purchase
Tier two, this would be things like hot tubs, maybe putting in EV chargers, checking some of those boxes that are a little less expensive
Remember, there’s a range to these things. You could spend $10,000 on a fire pit, or you could spend $500. And the last tier would be the low-cost tier
Maybe you add some outdoor furniture. Maybe you add a little welcome gift basket. Maybe you add some cornhole. Maybe you add a little putting green that you put in manually. Again, you wanna make sure your expectations exceed whatever the guest is expecting, but you don’t always have to spend an arm and a leg on these types of amenities that, again, could stand out and really help you be different in your photos
I hope this episode gave you a little bit more insight. And remember, don’t just go off gut feeling. Use some data, which is easier than ever to come by, to help you make the decision as to whether you should be adding an amenity or notÂ
