Definitely Buy Inside Golden Triangles

let's talk about how we know if an area is worth investing in using sites like air dna and something that i dub the golden triangle which we'll talk more about [Music] now i touched on this subject before in previous videos but today we're really focusing and honing in on two key things well three things airbnb air dna how those complement each other and how we actually pull numbers and research a whole area and then the golden triangle which always sounds a little bit strange to me kind of inappropriate but that's name i gave it now if you want more details while researching your specific area and you want to see the step-by-step process of how i personally analyze a neighborhood or city before i go in there invest which i am doing in two separate states and cities right now i broke it down in a really easy pdf with the spreadsheet that i use to help me run numbers on potential new short-term rental investments it's all free on my new website that i just created this weekend that i slapped together go ahead go over there it doesn't cost you a thing just your soul no i'm just kidding just your email and with that email i am not the devil i'm not going to sell it to corporation scammers or the government or anything like that at all i use it to stay in contact with you when i upload new free stuff and of course when i am going to be releasing my new program specifically around building your own rental business and at the pace that i'm going working on this channel i'm not sure you'll even get an email from me in the near future but it'll be there now i guess i shouldn't have told you that for the algorithm's sake for youtube so don't just go over to that website now let's make sure you watch this video all the way through and then you can go over there or better idea is that you open up another window go to the site download that real quick and then jump back into this video and then you can actually follow along and you can see exactly what i'm talking about with examples and visual aids and all that good stuff that's the better idea do that if you want so by now you either have the pdf in front of you or you can watch this without the pdf but i'm going to give you my 30 second disclaimer before we get into the meat of things right here okay there are three key things that you need to do before you jump into what i'm about to share with you so make sure you don't ignore these three things because they will dictate whether you're successful or not and how financially successful you are one who's your guest that you are catering to number two what type of space allows you to lean into an area of your expertise and the number three is destination area now too many new investors or beginners jumping into the real estate market or short-term rentals they forget these three basic key items and they just want to get into making money now that's a huge mistake because these three things dictates everything else that kind of follows along with it that we're gonna get into here alright so i'm assuming that you have a place on the map that you want to be buying or purchasing in usually this area for me is usually about 50 to 100 mile radius now once i've got this area figured out i go into triangulation mode which still always sounds like strangulation is a little bit weird but that's what i'm thinking i'm thinking triangles at this moment well before we get into drawing triangles all over this map what we're gonna do is we need to pinpoint three different areas actually several different areas the first one is the major cities that i believe most people would enjoy visiting or have a good reason to visit number two are hot spots that would naturally draw in my group or my type of guests such as vineyards restaurants shopping golfing sightseeing etc and the third is a major natural or man-made attraction that draws in people popular hiking trails lakes rivers forests parks anything like that now like i said i'll generally do this over 100 mile radius around the major area that i'm looking at now once i've done this i embrace the first greater immune i start connecting dots but i'm not just connecting dots willy-nilly what i'm doing is i'm trying to connect and make triangles with one of each of those three areas that i just laid out for you now what i'm really trying to do here is make as many equilateral triangles as possible now quick geometry lesson here is that an equilateral triangle is just a simple triangle with the same sides or same size sides same size sides that's kind of hard to say same size side same side side same side sides so by the end of this you'll have all these triangles all over your map you should have if you don't maybe it's a bad spot you may want to look somewhere else but what we really want are the golden triangles i think i got them golden because i started highlighting them in yellow and looks like a gold triangle so that's why i call it that but these are the ones that are the most like an equilateral triangle but each side is only a 30 minute drive now make note that i said a 30 minute drive and not 30 miles because depending on your area 30 mile drive could mean 2 miles and in some other areas it could be 45 miles and then everywhere in between now i usually double check drive times just by plugging chugging addresses into google maps now i'm not using this to the t of 30 minutes sometimes it's 32 sometimes 35 even if it's an extremely great area like a national park or something i might even extend it out to 45 minutes but my overarching goal is to be within 30 minutes of all these places on each side of that triangle [Music] now it's time to supercharge your research and dig into the numbers and this is where i like to use airbnb and just recently i got converted over to using air dna and i actually like it a lot and air dna all it is is a site it's a third party site that pulls data from popular listing sites like airbnb and vrbo or i think they call themselves verbo now which is strange now i only use the free version of air dna because as you guys can see the plans are not exactly cheap it can actually be very very expensive up towards i think 500 a month depending on what you're trying to do and to be quite honest i'm not quite sure how useful that amount of detail really is because a lot of the data that i really need is also found on airbnb which i'll show you guys here in a second but if you have more experience with air dna it's been really helpful for you write a comment down below and let me know there's five numbers that i look at on air dna the first one is average nightly rate now this is self-explanatory obviously the higher the numbers is the better and what i'm looking for is i'm looking for an average of around 120 plus dollars per night now the reason why is because we know this is an average and typically if 120 is the average that means it's the higher end area is usually between 150 to 200 and that's the place that i like to play in if you guys watch my videos for any amount of time you guys know that my places i tend to try to make it more quote luxurious or higher end i don't like playing the middle and i definitely don't like playing on the low end the second is occupancy rate now with occupancy rate this is really the bread and butter of making sure that your place or the area is the most successful as it can be and i look for at least a 70 plus occupancy rate anything below that it doesn't really grab my attention because it shows there's a lot of vacancies now it could have something to do with the types of rentals in that area and i can dig into deeper but typically on a very surface level i'm looking at 70 or higher now it's important because a lot of times you can get high occupancy rates but you have to look at the range both the peaks and the valleys and it's shown here right on air dna as well so you for example you don't want to see an area where like the lows are like 15 and the peaks are at 100 and the reason behind that and it's more of a personal subjective one is that i don't like areas that are really hot and cold i like consistent areas it helps with cash flow helps with predictability and i don't like a place sitting empty or at 15 occupancy rate for several months which you know for example are coastal towns mountain towns areas like that that are very seasonal now with just these two numbers i can actually calculate the effective rental rate for that area all i need to do is multiply them together very simple math this effective nightly rate is incredibly important to make a decision and run your numbers because it really dictates whether you're going to be cash flow positive neutral or worst case scenario negative the next one is rental growth rate and this on air dna is shown with just this nice simple graph of quarterly growth it can show when and how the market is expanding or contracting and the next one is the number of active rentals obviously this is just a flat number of how many rentals are in this space or this area and it gives me an idea of who i'm going up against obviously and clearly if there's a hundred rentals out there versus 10 000 it makes a big difference on how i enter the space and if i think it's even worth entering and then the last thing i look at is rental size air dna is really nice where it actually breaks down the size of the homes or the spaces that are rented out through airbnb and vrbo by the number of bedrooms this will help show what people are attracted to and what people are offering and so this can help tell us maybe there is a low demand for two or three bedrooms or there's a really high demand for studios and maybe there's a nice little niche to be carved out for spaces that are a little bit larger that can accommodate two or three couples it just helps add some color to our research and that's why i like using now air dna is all good it's actually really nice to look at the numbers and it takes a grand total of maybe five minutes or less to get a really good gut check of what's happening in a specific spot but you really can't compete with the og airbnb right the site has a ton of information and data for you if you just know how to look for it now a lot of people i'm assuming you too know how to use or how to navigate airbnb but it takes a little bit of an art and experience to really be able to navigate and use airbnb to do the research that we want to do and find the answers that we want to find now what we're looking for when we go on airbnb are the types of properties being listed in an area the quality of the properties that are in my niche or your niche and the number of reviews for properties on the first page and although air dna is extremely helpful i would say that this information that i gather from airbnb is far more valuable and it really the air dna just supplements the data that i collect here just by spending about 15 30 minutes on airbnb this will show me exactly how many people are visiting this area what season are people going there and also my competition base and who's well established in this space and what are people really drawn towards are they drawn towards tiny homes cabins full houses yurts or anything else in between and what i consider as well established is having at least a hundred verified reviews on the airbnb platform now here's a good pro tip that allows me to really assess an area is i find a couple of well-established properties and i'll jump into their page and i will scroll down to the reviews and i will go and check out their earliest review and what i'm interested in is the date of the earliest review and then i can backtrack out and see how long they've been on the airbnb platform divide that out with some simple math of their number total number of reviews and that will give me the number of average stays that they have per year and then per month that helps calculate what i can do or helps me estimate what i can do and then i can run my numbers off of that again with the numbers off of air dna now all these steps can take me anywhere between 30 minutes to maybe even several hours really depending on what i drum up during the research process but i want you to keep this in mind is combine a good market with sound business fundamentals and you will become financially successful in the long run and when given the option i really try my hardest to be different rather than better bonus points if you can do both go check out my new websites kaiandrew.com and download all the free goodies and if you guys still want i'm still holding consultation sessions if you want to go over how to buy raw land building your own place getting the short term rentals glamping shipping containers permits financing all that stuff book a session with me email contact information just below in the description don't forget to like and sub follow me on instagram all that good stuff other than that i love you all kai out you

Channel: Kai Andrew

Views: 82,148

Keywords: researching property, real estate research, airbnb business, airdna, airdna vacation rentals, research methods

Id: J67t2xnusmA

Length: 12min 31sec (751 seconds)

Published: Tue Mar 30 2021