How Data Helped One Host Ditch the Wrong Investment

Lydia Patel is a pharmacist, personal finance enthusiast with a popular Youtube channel, and in 2020, added short-term rental investor to her skillset. After listing the tiny home in her Minnesota backyard on Airbnb, she caught the “real estate bug” and wanted to scale.

First, Lydia thought intuitively about where she and her family would want to vacation and landed on North Florida. And working in healthcare, Lydia looks for evidence to support every decision. It was no different with her first short-term rental investment. She began using AirDNA to hone in on the market and found that a 5-bedroom home would earn disproportionately more than a 4-bedroom and didn’t cost that much more. 

“I find it enjoyable to understand the data. I find peace in it. If you have the numbers, you’re going to feel confident in your decision.”

As she became more comfortable as a host, using data to tinker with prices and listing details, Lydia wanted to expand her short-term rental business. Her first idea was to invest in a new market to take away some of the stress that comes with Florida’s seasonality, thanks to hurricane season. 

After crunching the numbers, Wisconsin Dells seemed like the perfect market to expand to. It was near friends and family, other investors were seeing success there, and the houses were cheap. She was pretty much sold.

But, given her analytical nature, Lydia needed to dive deeper. During that deep dive, she found that supply had risen tremendously in the area. When she analyzed further, she found that properties located near a water park were vastly outperforming the rest of the market, making the area less of a sure thing. Her expansion was put on hold.

“If it’s not right, it’s better to lose that time researching up front than enter into a bad investment and deal with the downsides later.”

Then, when Lydia was conducting her bi-monthly market review on AirDNA for her Florida home, she found that other similar properties to hers had a pool. After filtering to show only properties with a pool, Lydia using the export tool to compare nearby listings with a pool and without, she discovered the potential returns of adding a pool to her Florida home were comparable to a whole new property in Minnesota.

“If I didn’t log in and check how the market is doing revenue-wise and observe who is at the top of the leaderboard, I would never have noticed this pool thing. I could have gone years and years seeing revenue decline and might’ve thrown in the towel.”

This bi-monthly market review is a practice Lydia says takes only 10 or 15 minutes, but every time, she walks away with useful information. As part of her educational Youtube channel on smart investing, Lydia encourages every new investor to practice running numbers and keep at it to make confident investments.

By staying vigilant and reviewing the data closely, Lydia managed to dodge a costly mistake and uncover a golden opportunity instead. Her dedication to understanding the numbers led her to the perfect solution: adding a pool to her Florida home. Now, with the potential for returns as high as a new property, it’s clear that Lydia’s next big move might just make a splash.

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How Data Helped One Host Ditch the Wrong Investment

How Data Helped One Host Ditch the Wrong Investment