Your Property Scorecard: How to Measure and Improve Your Property Performance

welcome back to the short-term rental riches podcast I'm back here in sweet old Medellin Colombia I love this place you guys have heard me talk about it quite a lot uh and I'll be here pretty much through the rest of the year minus a few side trips I was just in Belize for almost 10 days at a a really good conference macro economic conference so a lot of big thinkers there are a lot of big minds and I've been going year after year great connections it's

always good to to get in there and just meet people in the real estate industry and there's so many different types of real estate just like there's long-term rentals there's short-term rentals but we talk about commercial real estate and the whole big picture and I'm getting ready to go back to the U.S a lot of traveling these days but going back to Austin Texas next week actually to speak on a panel at the imn conference there in Austin so I'm looking forward to that looking forward

to catching up with some friends that happen to live out there too and if you're going to the conference I would love to see you there so make sure to give me a shout if we cross paths so today I want to talk about how we can grade our property because a lot of people are asking a lot of people are thinking ah shoot my property's not doing that well the occupancy's down maybe my average daily rate is down maybe my average daily rate is high

but my occupancy is lower so how do we really know if our property is doing well well there's a pretty easy way and that's by creating a comp set so I want to talk about how you can create a comp set I use price Labs you guys have heard me talk about that one before but you can also create comp sets with other Dynamic pricing tools like wheelhouse so before we can create a comp set though this in a comp set is essentially a set of

properties in our Market that are comparable that we can compare our property to so there's certain things that we're going to want to put in there we need to be comparing apples with apples we can't compare a four bedroom home with a small studio for example so I want to run through some of those and then afterwards I want to run through some of the things that that comsat's going to give you and then just a couple things that you can do to kind of shoot

for the stars and make sure you're always ahead of your competition so the first thing is we're creating our comp set we need to create a radius so that's how far out we're actually going to search around our property so if you're not using a pricing tool yet like price Labs I highly suggest you do it it's worth the minimal amount of money that it costs each month that's highly highly important information it could be the difference between you making money with your property each month

and you losing money so the first thing is we need to get a radius a segment of the market that's comparable area to our property and so if you're in an urban area there's going to be a lot of properties in a short distance if you're out somewhere on a ranch style property well then you're going to have less comps and so of course your radius you're going to want to make that bigger so once we've determined our radius and again we don't want to be

including areas that are maybe across the street and some places and it's a totally different type of neighborhood we want to weed those sorts of properties out so we want to make sure that we're comparing the right size property compared to ours so if it's a two bedroom we want to compare with other two bedrooms we want to compare in similar neighborhoods so that's where the radius is going to come through and these tools and the dynamic pricing software is going to allow us to pick

and choose what actual properties come up in these search results so we're just going to go through and remove the outliers the ones that don't really fit our com set or match up to our property well before we actually use the data from them so if you're not using a pricing tool this is probably sounding like really foreign to you and I would suggest well first of all that you use a pricing tool but if not if you're just on Airbnb or you're just on VRBO

well then you could create this yourself you can create a Google sheet you can search other properties in your neighbor Hood but unfortunately you're not going to have a lot of that good backend data that we're going to be able to get with some of this pricing software so once we have our radius once we've compared our properties to similar properties we also want to compare amenities so if our property has a lovely infinity pool with a beautiful view then we can't compare that property to

another property that doesn't have a pool an Infinity view unless it doesn't matter in your neighborhood so again these pricing tools allow us to see what the demand is for certain amenities so really valuable information there the next piece that we want to put into our comp set is reviews our reviews so we want to make sure that we're not comparing our property that maybe only has two reviews to one that has 400 reviews those are not going to be able those aren't getting equal visibility

on the OTAs so we want to make sure what I like to do is maybe weed out all the properties that are just brand new so maybe you want to select properties that have over five reviews but then maybe somewhere near the amount of reviews that your property has the next thing we're going to want to do is make sure that we're not comparing our properties to other properties that aren't listed all year that's assuming your property is listed all year if you happen to stay

in your property six months out of the Year well then you could compare to other prop properties that are only available six months out of the year but your data is going to be a little skewed so I recommend that you filter out all the properties in your comp set all the properties that showed up within that radius to only the properties that are listed all year long that way you know that they're professionally managing those properties or their individual owners that really care about their

properties and it's going to be going to give you a lot better comp set the next thing you're going to want to do is weed out any properties that had an average reservation that's much different than yours so again these pricing tools give you this data you can jump on YouTube check out price Labs tools just get an idea of how they work if you haven't already but hopefully you're understanding how important this data really is and that how we're pretty much blind out there if

we're not looking at our neighborhood comparable properties if we don't know what our neighbors and the market is doing then we can't really say whether our property is doing well or not of course we could compare it to last year and we could say yeah unfortunately my occupancy is down 15 percent year over year and the reality is is that Nationwide we're down a little bit but that's just the nature of the game so if we want to know how we're doing we need to be

comparing our property to other properties that are still listed on the market to see if we're doing better than them or if we're falling behind so with our comp set created you will be able to pick and choose which properties you want to be in that com set now I wouldn't suggest selecting a thousand Properties or 500 properties you want some small subset of properties that's manageable and that you can compare frequently so maybe every week maybe every other week maybe just once a month but

a small enough subset to where you can compare your property and know if you're falling behind or not now the cool thing you could do is you can actually create multiple comp sets so let's say that your property rents pretty well on a nightly basis maybe your average reservations just three nights but your property also has a potential to rent for a month or for two months or for a medium term reservation well you could create another duplicate comp set with everything else created equal everything

else equals so same size property same size amenities but then weed out all other properties that had an average reservation of less than a month and then what that will give you is the data on your market and what they're charging for medium term stays or those longer reservations so you know if you are planning on renting your property for four thousand dollars a month for example and you ran your com set for only properties that were rented long term and you saw that they were

all running for three thousand dollars a month well then it's not very likely that with everything else being equal you're going to be able to charge an extra thousand dollars a month so the com sets give us a ton at ton of information once we run them we can also get some high level figures out of it so what the average daily rate is for that whole comp set what the average booking window is for that whole comp set what the average reservation length is for

that whole com set what the seasonality is so how it changes throughout the year so these com sets are gold they allow us to grade our property and let us know how well we're doing so I know we kind of got into the weeds here some deep data stuff but it's really important know that these features exist if you're using a dynamic pricing software tool if you're not using one of these tools I really suggest that you check one out you can head over to our

website at restmethods.com we have our recommended resources there with all the software programs we're using if you're just on Airbnb or just on VRBO you can compile a list like this but it's going to be a lot more challenging it's going to be a lot more work and I think for the money uh you will find a ton of value with these com sets and it's going to allow you to know how well your property's doing I hope your property is doing really well and you're

staying in the game you're not getting discouraged by maybe a little less occupancy I think for all of us that currently have properties in these current economic Times that as long as we hang on and we continue to do a great job and we continue to have a great guest experiences well we're going to do well because reality is there's not a lot of people buying new short-term rentals right now interest rates are high and that means that there's less Supply coming on the market so

hang in there check out your property compared to others if you don't think it's doing that well and that will tell you if it really is or not I hope you guys are having a fabulous week and I look forward to catching up next time I've dedicated years figuring out how to manage my personal portfolio remotely and it wasn't always easy and it took a long time but now my amazing team professionally manage my properties without me and good news our team can also manage yours

let us save you the stress and headaches and some money by offering you an industry low fee find out more about partnering with us head to str-riches.com hit the property management button answer a couple quick questions and meet with me personally that's striches.com rest easy knowing that with my team your properties will be in excellent hands