How I Analyze a Short Term Rental Opportunities

If you’ve ever wondered how to analyze short term rental opportunities, you’re not alone. One of the most common questions I get from investors and homeowners is whether a property should become a short term rental, long term rental or be sold entirely. Before I answer that question, I always start with data.

In this episode, I walk through my actual process for evaluating a property before buying. This is the same process I use when looking at investment opportunities, helping clients analyze potential properties and even evaluating deals for myself.

Recently I did this exact exercise for a property in Sevierville, Tennessee, and it ended up being a perfect example because at first glance…the numbers were all over the place.

The listing projected one thing. The software said another. And the truth ended up somewhere in the middle.

Let’s break it down.

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Step 1: How to Analyze Short Term Rental Opportunities Using AirDNA

The first place I always start is AirDNA.

Most people immediately begin by searching a market like Gatlinburg or Sevierville as a whole, but I prefer to start with the exact address if I have it.

Why?

Because I want a baseline before comparing the property against the broader market.

The property I analyzed was:

• 4 bedroom
• 3 bathroom
• 2,830 square feet
• New construction
• Mountain views
• Indoor pool
• Space for game room amenities
• Hot tub potential

The listing itself claimed:

Projected annual revenue: $150,000 to $175,000

Pretty exciting.

Then AirDNA gave me this:

• 55% occupancy
• $407 average nightly rate
• $82,000 annual revenue

Well…that’s a pretty big difference.

Immediately I knew we had to go deeper.

Because software can only tell you part of the story.

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Step 2: Software Doesn’t Understand Brand Potential

Here’s the thing.

AirDNA is pulling data from existing properties.

But this particular home had some things that dramatically changed the equation.

It included:

• An indoor pool
• Incredible mountain views
• Space for entertainment amenities
• Luxury finishes
• Strong design potential

And those things matter.

Especially in markets like Sevierville and Gatlinburg where there are thousands of cabins competing against each other.

Because if every listing looks the same, guests choose based on price.

Most Smoky Mountain listings already have:

• Cabin decor
• Hot tubs
• Bears somewhere in the house
• Similar layouts

So your job becomes figuring out:

Why would someone choose yours?

That answer usually comes down to:

Professional design

Guest experience

Amenities

And a strong brand story.

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Step 3: Analyze Short Term Rental Opportunities With Comparable Properties

Next I start digging through comparable listings.

Not just same bedroom count.

Not just square footage.

I want amenities that actually match.

One nearby property was earning around:

• $71,000 annually
• 51% occupancy
• $392 nightly rate

But after opening the listing, it became obvious why.

The design felt dated.

No indoor pool.

No standout features.

Nothing particularly memorable.

Then I found a luxury comp generating:

• $146,000 annually
• 74% occupancy
• $547 nightly rate

That property had:

• Sauna
• Multiple entertainment spaces
• Game room
• Premium upgrades

This is where things started getting interesting.

Because suddenly the original listing projections didn’t feel quite as unrealistic.

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Step 4: Compare AirDNA Against BNB Calc

The second tool I always use is BNB Calc.

I almost never rely on one platform.

Over time I’ve noticed:

AirDNA usually leans conservative.

BNB Calc usually leans more aggressive.

And the truth often lands somewhere between the two.

For this property BNB Calc estimated:

• 60% occupancy
• $457 nightly rate
• Approximately $100,000 annual revenue

That felt closer.

But it also flagged one important issue:

Negative cash on cash return.

And that’s a reminder that revenue isn’t everything.

You also need to understand:

Are you financing?

Paying cash?

Using partners?

Planning owner stays?

Hiring management?

Revenue projections only tell part of the story.

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Step 5: Use Market Data to Analyze Short Term Rental Opportunitiesrket

Once I analyze the property itself, I broaden the search.

I filtered:

• 4 bedroom properties
• Entire homes only
• Pools
• Hot tubs
• Mountain views
• Strong review ratings
• Full time rentals only

After narrowing things down, the results shifted.

Projected revenue moved closer to:

• $94,000 annually
• 62% occupancy
• $437 nightly rate

More importantly, only about 40 properties actually fit all those criteria.

That tells me something important:

This property had less competition than I originally expected.

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Step 6: Occupancy Trends Tell a Bigger Story

One of my favorite sections inside AirDNA is occupancy trends.

Because it shows seasonality patterns immediately.

For Sevierville:

Peak season runs roughly June through October.

July was the strongest month at around 83% occupancy.

January dropped closer to 40%.

There was also a noticeable dip in September because of back to school travel patterns.

Length of stay also mattered:

Summer stays averaged nearly four nights.

Winter averaged closer to three.

Those details help determine everything from pricing strategy to cleaning schedules.

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The Indoor Pool Surprise

One trend jumped out almost immediately.

Indoor pool properties consistently crushed other listings.

A few examples:

Property One:

• $171,000 annual revenue
• 93% occupancy

Property Two:

• $158,000 annual revenue
• 70% occupancy

Property Three:

• $143,000 annual revenue
• 82% occupancy

What surprised me wasn’t necessarily the nightly rate.

It was occupancy.

Indoor pools didn’t dramatically increase pricing.

They dramatically increased booking frequency.

That’s a huge distinction.

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My Final Thoughts on How to Analyze Short Term Rental Opportunities

After comparing:

AirDNA projections, BNB Calc projections, filtered market comps, amenity analysis and occupancy trends…my first instinct landed around:

$120,000 annual revenue during Year One

Then likely increasing over time as:

Nightly pricing stabilizes, brand awareness grows, guest experience improves, direct bookings increase and repeat guests return.

Could it eventually reach the original listing projection of $150,000 to $175,000?

Possibly. But only if it’s treated like a business and not just a cabin uploaded to Airbnb.

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There isn’t one magic tool that tells you whether a property will succeed.

The best investment decisions come from layering information together.n Use the software. Study the comps. Look beyond bedroom count. Pay attention to amenities. Understand seasonality.

And maybe most importantly:

Remember that the best performing short term rentals today aren’t simply places to stay. They’re experiences.

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Want me to analyze a property for you? Send me an address and I may feature it in a future breakdown.

Also be sure to check out more podcast episodes where we break down branding, guest experience, and building short term rentals that become legacies.