Active Listings - Is Your Pricing Strategy Still Relevant?

we just brought on a new partner shout out to you Scott and Lori beautiful property in Utah six bedrooms and there's not a lot of six-bedroom properties in this area in fact there were only five back in 2022 and now in our comp set there are 14 so if you look at those numbers that's actually 180% increase that might sound like a lot right but we got to remember the popularity with short ter rals has also grown and so people are discovering it and people are

using it more than they were in the past so I would say depends on the market of course but you should expect an average increase in Supply just year overy year because more people are staying in short-term rentals welcome back to the short-term rental riches podcast I'm really happy you're here again so Supply is fundamental to our analysis with any investment right we have Supply and we have demand and we always want to have more demand than we do Supply it hasn't always been really easy

to find out how much Supply is actually in our Market but it is now so I want to talk about two ways where you can find it and to sort of understand it a little bit more anyone can do this I promise it's really easy but before we do that I just want to remind you that we've talked about a lot on this podcast already if you're just joining us for the first time you can find all of our prior episodes at Str Str riches.com as

well as tons of free ebooks all all kinds of downloads and freebies stuff that we've used to manage tens of thousands of guests in my properties and then the properties we managing for others so we did talk specifically about Supply and six reasons why Supply might be going up in your Market that's episode number 220 and then we also talked about the other side of that why demand might be increased in your Market which is a good thing and that is in episode 2115 so go

back and check those out if you haven't already this week we're talking where to find those actual numbers and how to make sense of them okay so first things first where do we find the amount of active listings in our Market in our submarket and our ZIP code we're going to get into the nitty-gritties here the first one and this is no surprise if you've been tuning in for a while is on price labs. that's what my team and I use to manage all of our

properties in our portfolio for a pricing there's a ton of good data so that is one place where you can definitely find it I'm going to let you know exct how here in a quick second but before I do a lot of you have heard of air DNA uh and airdna also has this information although the subscription is a little bit more expensive uh and as far as I can tell it's not as accurate as price Labs so you can now get access to airdna on

a monthly basis so if you're exploring some markets this is a good place to start as little as $40 per month uh or they have much lower monthly fees if you sign up for a year that's at the time in this recording of course if you're just doing market research you don't need an annual subscription so just keep that in mind they do have the number of active listings on there but we're going to jump into price Labs because in my experience this is much more

accurate okay so hopefully you have a price Labs account already if you don't it's super easy to integrate you just go to Price labs. you can link directly with your Airbnb listing and it's not an expensive subscription it's well worth the money they have so many features you may be using another tool like on pricing or wheelhouse uh and if you are the things we're going to talk about in here should apply to those as well although you might be going to a slightly different spot

in those tools to find this data so once you've got a price laabs account you're going to need to subscribe to one other thing and that is a market dashboard so it's not expensive at all uh an extra $10 a month at the time in this recording and that's where we're going to find our data on active listings so there's two ways to look at listings one is just looking at the market in general that gives us a good uh 10,000 ft view of what's going

on in this market we know with our properties however we can't just look at averages we can't compare our three-bedroom to a five-bedroom or to a studio that just doesn't make sense right the supply and demand for each size property is different so how do we go about comparing apples with apples well we need to create a comp set and so of course if we have a five bedroom we want to compare other five bedroom properties in our Market we want to make sure they're in

the right zip code we want to make sure we have the right amenities we've talked about creating comp sets before so head over to strr riches.com to check out our prior episodes on that if you need help adjusting that let's assume you already have that comp set well you're simply going to apply this in the market dashboard so hopefully I'm not losing you here there are a few steps I'm going to recap them but either way even if I'm losing you this is going to help

us understand exactly what we need to know in terms of supply and demand so let's assume we're comparing Apples to Apples well we can simply just go to our Market dashboard and we can see the amount of active listings but we can't stop there right uh the first thing is what is an active listing Well that's a listing that got booked sometime in the last year so obviously we don't want to compare a property that got booked one time in the last year to our property

that's available all year maybe had 100 reservations so again we can filter this out in our comp set there is a setting there that talks about active nights listed I like to scroll to at least 250 days actively listed but preferably all year long right and so this depends on your property depends on the seasonality remember price Labs doesn't know if an owner is blocking the property they just assume all blocks are occupancy and reservations and so some of these more seasonal places where you have

owners staying in their properties maybe blocking for 3 months maybe in those situations the average active Knights is a little less but just to make it simple you want to compare properties that are active throughout the year okay so we got our comp set up and we can simply just look at this metric right under the market dashboards it says active listings and we know that it's comparing Apples to Apples so let's say it says 15% increase is that good or is that bad let's dig

a little bit deeper first of all you can scroll down a little bit there's going to be a show hide graph button and then that will allow you to go back and look further in the past so that metric right at the top is just telling you year-over-year but you want to go back two years 3 years so you can do this you simply just scroll over the graph and you could see oh in 2022 there were 105 bedroom properties in this exact comp set so

in this same area similar properties of mine there were 1222 and now there are 150 is that a bad thing or not well the supply has definitely increased but we can pull up one other easy little metric to let us know if there's still a lot of opportunity in this market and if we can still charge great prices and that other metric is revar and yes we've talked about this before but if you're new it's essentially the occupancy multiplied by the average daily rate so let's

say our listings increased by 15% but our revar increased by 20% that's great news right that means that this Market is sustaining that new Supply that more properties have been added but all the properties in the market on average are still earning more than they were before that's great news and so we can simply just look at these two things we can look at the increase in Supply or the decrease compared to our exact type of property remember we want to compare apples to apples year-over-year

we can take that percentage in increase or decrease and we can compare it against the difference in revpar for those same time frames I know that sounds a little complicated pause this episode go back and review it pull up your Market dashboard and price Labs it's not that complicated I promise you it really only takes you a few minutes and it's really good to know because if you're trying to charge prices from last year but your supply increased 20% and the amount that you can charge

didn't change at all that means you have to fight harder to get booked and to get booked at Great rates remember if the average occupancy in a market let's say that has 100 properties is 50% if that's the average occupancy year round let's just say that means that 50 properties out of a hundred are getting booked on average right and so there's obviously a lot more competition there than a market that has 75% average occupancy rates so here's a quick little case study analysis we just

brought on a new partner shout out to you Scott and Lori beautiful property in Utah six bedrooms and there's not a lot of six bedroom properties in this area in fact there were only five back in 2022 and now in our comp set there are 14 so if you look at those numbers that's actually 180% increase that might sound like a lot right but we got to remember the popularity with short ter rals has also grown and so people are discovering it and people are using

it more than they were in the past so I would say depends on the market of course but you should expect an average increase in Supply just year overy year because more people are staying in short-term rentals so of course if we don't have any other information we don't know if this is negatively affecting us or not 180% increase sounds like a lot so we go back to that rev par calculation remember that's the occupancy and the average revenue for that same period of time and

we can see that the average revar increased 23% that is great news for us that's great news for Scott and Lori that means that the market is not overs supplied right because we were able to more than double listings in that market double the amount of options that people have to book but at the same time each of those properties on average was able to earn a little more and have a little higher occupancy so of course not all properties are created equal there's so many

things that make them different the way you manage them your reviews all of those things have a huge huge impact two properties can be very similar but operate very differently so hopefully that gave you a little bit of insight again if you haven't checked how many active listings are in your Market recently I highly suggest that you do it because you might still be trying to charge prices from a year or two years ago uh or something similar Without Really knowing if you can and knowing

our active listings and knowing if the market is allowing for them or if the market is overs supplied that is crucial to our whole strategy again you can find all of our prior content strr riches.com we talk about pricing a lot I hope I didn't lose any of you out there and I hope all of you that have a property already are already using a tool a dynamic pricing tool like price Labs if you're still looking for your first property well then this will be essential

in your analysis to determine if adding one more listing in that market is going to be profitable for you until next time I hope you have a fabulous week want to get on the fast track to Financial Freedom through short-term rentals well it all starts with the properties you acquire but you want to make sure that you acquire the right properties I want to give you my ebook that will show you how to do just that there is no charge it's my gift to you for

being one of our subscribers just go to rest methods.com that's reest methods.com