How Much Do Short Term Rentals Make in Destin, 30A, and Panama City Beach? (Episode 3 of 10)

Avery Carl [00:00:00]:
Foreign what’s up guys? It’s Avery Carl from the Short Term show doing the intro for the Panhandle of Florida. We are doing a 10 episode deep dive on two markets here, both the Emerald coast and the Forgotten Coasts of Florida, which basically makes up the entire Florida Panhandle. So 10 episode deep dive here. We are going to add quarterly updates so make sure you hit that subscribe button. We also have some supplemental materials for you guys on our website. So anything you need to know know about current short term rental property pricing in terms of how much it costs to buy a property in these markets. You can find that on our website@theshorttermshop.com you can also find current Air DNA income data thanks to our friends over at, you guessed it, Air DNA. And we’ve got all that for you guys so that you can listen to this at any point in time and go find live pricing and live income data.

Avery Carl [00:00:57]:
Also, if you guys want to buy a short term rental investment with a short term shop agent on the Emerald or Forgotten coast, you can just email us at agents the shorttermshop.com and we will get you hooked up. These are two of my very favorite beach markets by the way. I’ve chosen to live in the Emerald Coast. I also invest in the Emerald and Forgotten coast. So very near and dear to my heart. Also, if you guys just have more questions and you want to chat about short term rentals, we’ve created an amazing community over on Facebook with over 50,000 short term rental investors just talking shop all day. It’s got the same title as my book, it’s called Short Term Rental Long Term Wealth. So head over there to chat more about short term rentals.

Avery Carl [00:01:36]:
And if you want to chat live on Zoom, we’ve got a call every Thursday that you can join@str questions.com Happy investing y’ all. Hey guys, welcome back to another Emerald and Forgotten coast episode of the Short Term Show Market series. Today we are talking about everyone’s favorite subject matter numbers and how to determine income and we have again a wonderful panel here to help us do that. So we’ll start by introducing January Johnson, who you’re familiar with at this point, but go ahead Jan. Hi there.

January Johnson [00:02:13]:
January Johnson, Florida native. I own four short term rentals in Panama City. I’m the longest running Airbnb host in the city and I’m a community leader for Airbnb and I sell for the short term shop between Panama City beach and Navarre Beach.

Avery Carl [00:02:28]:
Thanks January. And next we have Austin Lewis. Hey Austin.

John Bianchi [00:02:33]:
Hey, what’s up, guys? I am also a Florida born native, actually Pensacola born and raised. I am a short term shop agent that covers from the Alabama state line over to Navarre beach and everything in between, which would be Pensacola beach and Perdido Key.

Avery Carl [00:02:51]:
Thanks, Austin. And next we have the Airbnb data guy, John Bianchi. Hi, John.

John Bianchi [00:02:57]:
How you doing, Avery? All right, so I’m John Bianchi. I’m the head of data for techvestor. I also have my own Airbnb data consulting business. Techvestor, for anyone who doesn’t know, is a short term rental investment fund. We’ve raised about 40 million in the past 15 months and bought 80 plus properties. And it’s my job to identify what is the absolute best market to be in, what’s the best thing to purchase within. Within that market, and how to maximize the revenue of that property that we’re getting. So.

John Bianchi [00:03:23]:
So I live and breathe airbnb data.

Avery Carl [00:03:27]:
It kind of makes gives me a headache to think about doing that all the time.

John Bianchi [00:03:32]:
I love it. It’s my favorite thing to do, so.

Avery Carl [00:03:34]:
Well, good, good. Yeah, buddy’s got to.

John Bianchi [00:03:37]:
Yep, exactly.

Avery Carl [00:03:39]:
And last, we have Chuck Kramer, who you may be familiar with from our social media. Chuck, say hello.

Chuck Kramer [00:03:47]:
Hello.

John Bianchi [00:03:50]:
Glad to be here.

Chuck Kramer [00:03:50]:
Thank you.

Avery Carl [00:03:51]:
Did you buy a new Hawaiian shirt for this?

Chuck Kramer [00:03:54]:
No, this is actually vintage. It’s about 20 years old.

Avery Carl [00:03:58]:
Oh, yeah, I like it. I like it. Okay, guys, so we are just going to talk about how to determine income. Today we’re only talking income numbers. We have a separate episode. The next episode actually is going to be on expenses and we’ll help you get to those analysis numbers that you need. But first we’re going to talk about how to determine income. Now, there are some vocabulary words that we need to go over, such as cash on cash return.

Avery Carl [00:04:28]:
Who wants to give a definition of cash on cash return?

John Bianchi [00:04:31]:
I honestly, I don’t want to give. I can give the definition. Probably not the best suited for it because once again, I just want to mention, like I live and breathe airbnb data, but just everything, real estate, I’m still learning as I go when it comes to it, but my understanding of the definition is that, you know, if you put a hundred thousand dollars in and you get a net return of $10,000, then you have made a 10 cash on cash return for your money.

Chuck Kramer [00:04:55]:
Yeah.

John Bianchi [00:04:55]:
And just very important net not.

Avery Carl [00:04:59]:
That’s where people. Yep, yep. So, yeah, so that’s exactly it. So it’s basically the amount of money that you put into the deal versus the amount of money at the end of the year that you get out of the deal after all of your expenses. That’s your cash on cash return. That does include your mortgage payment. So a lot of people can confuse cash on cash return with net operating income. Net operating income is your income after all of your expenses except your debt service.

Avery Carl [00:05:27]:
So just keep that in mind. Cash on cash return does include debt service. So I like to look at that more than no, I. Because that’s, you know, your true net. So that’s typically the main way that people look at analyzing short term rentals is what is the cash on cash return nowadays? So years ago there used to be a thousand deals just laying around on the MLS where you could just pick it up and make a crate like a 60% cash on cash return. Julie McCoy on our team has a property that she bought in 2017 or 18 that she got a 100% cash on cash return. Now you can’t do that anymore because things have caught on. That was a benefit of being an early adopter.

Avery Carl [00:06:09]:
So now you’re not necessarily looking for things that are already doing. The benchmark I would say is about 20% cash on cash. You can always improve though. So what I try to tell people, and actually I ripped this off from January, is you shouldn’t necessarily be looking for a property that’s already doing that because there’s not as many as there used to be. But you’re looking for a property where there’s the opportunity to bump it up to that. So maybe there’s one out there that at its current income number it’s a 15% cash on cash return. But they’re not optimizing some things and you know that if optimized you could bump it up. So you’re not necessarily looking for numbers in all of these properties.

Avery Carl [00:06:50]:
While they are important, I’m not telling you to dismiss them. You’re looking for the opportunity to get those numbers where you need them to be. And John is here to kind of give us a rundown on how we do that. So let’s just start with your process. So where do you find data when you’re looking for short? Like when you found a property, say somewhere on the Emerald coast or the Forgotten coast, and you want to know, well, what, what do you think this property can do? Where do you start?

John Bianchi [00:07:23]:
Okay, so I’m going to do my best to try and summarize this so that it’s not a really long rant.

Avery Carl [00:07:28]:
But it can be long, it can Be long.

John Bianchi [00:07:29]:
Okay. Okay. I can go, I can really go into the details of it. I’m just trying to do the, try to do the high level review. So the, the basic, there’s, there’s a variety of different places that you can get the data, but what you want to try and do is get the raw data, right? So you don’t want to be going on to maybe Air DNA, Rabu or any of these sites and just getting averages of what a property could potentially do. So say you’re looking at a four bedroom, you don’t want to go into Air DNA and then find the average of what a four bedroom does across all of Destin. That’s not going to help you at all because there’s so many different nuances to the property, right? So what you want to try and do is get the raw data if you can. And there’s a variety of different places that you get it.

John Bianchi [00:08:08]:
That’s one thing that I provide, that’s something Price Labs provides. There’s a lot of different ways to get that data, right? So say you have this, a four bedroom in Destin, and you’re trying to figure out exactly how much it’s going to make. You’ve now figured out a way to get the raw data for all the four bedrooms that are within the Destin market, right? Then what you’re going to want to do is clean up all of the data for the four bedrooms in that area. Then you’re going to want to organize it from who’s making the most to who’s making the least to you want to verify that it’s good data, and then you want to figure out where your home falls within the ranking. So there’ll be some homes making 200,000, some homes making a hundred thousand, and they all have all these different little nuances between them. And you want to figure out which which one of those homes your home matches up best with. Which is the enemy method which you always talk about, right? It’s just simply figuring out which home yours best matches up with. I refer to it as the Burger King logic, right? So McDonald’s spends millions of dollars to figure out what corner to be on Burger King opens up across and they just replicate what McDonald’s is doing, right? And so in this case, what you’re doing is you’re just replicating what’s already working.

John Bianchi [00:09:14]:
So if you have a four bedroom that is a brand new build with a square pool that has enough space to add maybe some additional things in the backyard, and there’s also additional space in the inside for a game room. You then find the home that has all those exact same qualities. You figure out exactly how much it’s making, and that’s going to give you a general idea of how much your property is making. That’s the quickest way that I can explain that.

Avery Carl [00:09:36]:
That’s great. That’s great. Now I’m just going to ask you questions based on that. So when you say raw data, what does that mean for someone who’s never analyzed a property before, has maybe signed on to Air DNA like once or twice? What does raw data mean?

John Bianchi [00:09:50]:
Okay, good. Good question. So raw data is like when you have data within a spreadsheet, right? So like a Google spreadsheet or an Excel sheet, that’s sort of the raw data. When you look on Air DNA, SDR Insights, all of these other programs, they use dashboards to summarize the data and give you averages, which is good on a high level, but it’s really bad when you’re trying to go property specific and you’re trying to understand exactly how much your specific property that you’re trying to analyze is actually going to make. And so raw data is just simply when you can extract the data from either manually extracting it from Air DNA or getting it, you know, pulled from Price Labs or my. My provider as well, and then having it in the raw form, which is in that Google sheet form.

Avery Carl [00:10:42]:
How does one manually extract data?

John Bianchi [00:10:46]:
So if you have a subscription on Air DNA, right, and you’ve paid for that location, then when you hover over the map, you can click on one of those little purple dots and it pops open some general information about. About the property that you’re looking at, right? And it tells you, you know, how long that they’ve been tracking the data for what the adr, the occupancy and the revenue is for that property. Then you can also click into the Airbnb link and see all the data that. All the data on the Airbnb link as well. And so you can manually, like, just take that information that you’re seeing and put it into a spreadsheet, right? So you can make a column that’s called revenue. And then you take the revenue number that you’re seeing on Air DNA and then you input it into that spreadsheet. And then you do that over and over and over and over again for all the good pieces of data for the location that you’re looking at. And now you’ve manually extracted all that data into a spreadsheet.

John Bianchi [00:11:39]:
And so the reason that’s very, very useful is because you can organize it in a way that allows you to read it and find patterns within the data.

Avery Carl [00:11:49]:
Okay, one thing that I want to back up and look at really fast because I had an example of this happen just this morning. Why the enemy method and doing it with a spreadsheet is important. So I had somebody reach out to me and say, hey, do you know of any short term rentals for sale on 38? And I’m like, yeah, they’re all short term rentals. Like what, what exactly are you looking for? And he said, well, I’m having a hard time figuring out how much they’ll make because I don’t believe the numbers. And I said, well, what are you looking at? And he said, he named a very a neighborhood that’s a little more affordable that was kind of specifically built for people who live here. So there’s not a lot of rentals in there. They’re allowed. There’s some, but it’s really more of a neighborhood where locals live.

Avery Carl [00:12:30]:
It’s not right on the beach. It is on 30A. You could walk to the beach. But it’s not like a big short. The houses are very normal. They’re normal people houses. They’re not mega mansions. But it’s right next door to Seagrove where there are mega mansions that do gross like 500, 700,000 a year.

Avery Carl [00:12:49]:
But you know, they’re $20 million houses. And he said, well, you know, in this, in this neighborhood where these houses are more affordable, the data is saying that I’m going to make $250,000. Because he was looking at the averages because it was pulling data from these mega mansions that are right next door. So you can really, really mess yourself up by just using those averages.

John Bianchi [00:13:11]:
Correct. And that’s so my. I’m assuming that this person was likely using one of the softwares that exists out there where you can plug and it’s going to tell you how much property is going to make, which is, you know, Rabu has that Rentalizer. Air DNA has something called Rentalizer. There’s awning. There’s a bunch of these little companies that do it. Right. I personally hate those things more than anything in the world because of that exact reason that you just said there and how much of a.

John Bianchi [00:13:39]:
Because some people won’t understand that that isn’t accurate. And then they’ll go out and buy homes based off of that number. So it drives me insane. And I have clients who have come to me and they’re like, hey, I thought my home was going to make 300,000. And I tell them, like, no, it’s only going to make 200,000. Right. Which, you know, they’re obviously buying a very expensive home. It’s going to make that amount of money and that’s $100,000 less cash flow that they’re going to be making that they expected to make just because that program.

John Bianchi [00:14:01]:
So yes, I hate those softwares more than anything. And the reason why it’s so important to manually extract the data is to ensure that you’re pulling out the homes that are comparable to your home and not basing it off of the mega mansion that you don’t comp with at all. Right. So yeah, fully agree on that.

Chuck Kramer [00:14:22]:
So this is also an area where pairing up with a real estate agent can be helpful because you can understand these areas.

John Bianchi [00:14:32]:
So I actually, I did a bunch of research on the panhandle area before this podcast. A bunch of research. And one thing that I want to make sure we can maybe talk about is the data itself and some of the issues that you might run into and all the bad data that could exist within the panhandle area just because of the type of market. And so I was thinking to myself, like, how would I get around the bad data? Like, what are some of the options? And one of them without a doubt is working with somebody who’s an actual realtor in the area who has clients who have bought homes in the past and know how much they’re actually making because they’ve built a relationship and now they have generally told them, like, yeah, my home’s making $200,000. And you have that real living proof data. Right. Rather than just the algorithm computer data. So that’s one way that I was thinking I can get into some of the other ways too.

John Bianchi [00:15:19]:
But that’s a. Yeah, we’ll get to it, let’s put it that way.

Avery Carl [00:15:22]:
Yeah. And I mean just, you know, local agents are going to know. Okay, so this, like the neighborhood that I live in, for example, seems like a great place to do short term rentals because there’s not an HOA and it is pretty close to the beach. But our neighbors will burn your house down if you do that because it’s all primary homeowners. They’ve all been here since there was nothing here. And I would want to know that if I was about to buy a house in there to short term rent because they, they do not mess around. So you really. Or you know, it’s something just as simple as knowing that, oh, hey, you know what, they’re putting a new attraction right here or some new restaurants or, you know, any number of things that someone who’s local, who’s, you know, in the local community or just driving past certain things on a regular basis.

John Bianchi [00:16:09]:
No, that’s. Yeah, that’s a dead given. I mean, you really got to know your area before you give it. Get. Go into an area and the realtor is going to know it way better than anybody else. Right. So pulling as much information as you can from people like you guys is really important to me.

Avery Carl [00:16:24]:
Yeah. Oh, go ahead, Chuck.

Chuck Kramer [00:16:26]:
Sorry, I was just gonna say, and I wasn’t trying to plug anything, but I know people that have spent a lot of time spinning their wheels without knowing the area, and then they go to talk to an agent and realize they just wasted 50, 100 hours because they didn’t have that information. Get into that early in the process.

John Bianchi [00:16:45]:
So when, when. So TechMaster is in, you know, 10 plus markets. We’re going to be entering way more over the next couple of years. And one of the very first things that we do is contact a realtor and just hop on a call with them and get them to explain the market to us, ins and outs and everything we need to know. Like we were talking about Memphis before we started. Right? That’s a market you’ve got to know extraordinarily well to, to buy in. Right. Because there’s so many issues that you could run into.

Avery Carl [00:17:10]:
Yeah, absolutely.

John Bianchi [00:17:12]:
Yeah, yeah.

Avery Carl [00:17:13]:
So let’s get into that panhandle specific data that you mentioned and things that you might run into.

John Bianchi [00:17:19]:
So the, the, the thing about this market is that you have two things that cause data to be really bad, maybe three things. So one is the fact that it’s, that’s very seasonal. So you have a really, like a huge dead season where a lot of people will not rent out their home during the off season. And so because of that, some people will block the dates on their calendar rather than just pausing it. And the algorithm might not know that it’s not booked. Right. You just blocked it yourself. They think you got it booked.

John Bianchi [00:17:54]:
And so imagine if an algorithm is tracking how much data you’re making, and all of a sudden it thinks you just got booked for four months over the winter, but really you didn’t. Your revenue number is going to be way off. Right. So that’s, that’s one issue that, that I’ve seen. The other issue is that you have mega mansions. So mega mansions in these beautiful Beautiful, amazing homes that are obviously owned by people that have a crazy amount of money, and they’re not trying to maximize revenue from it, and they don’t really care if it’s rented out as much as it possibly could be. And they might be, you know, once again, block blocking a lot of days rather than getting them booked. And so then all of a sudden, you have this $10 million home that looks like it’s making $500,000 a year, but it’s only got five reviews on it.

John Bianchi [00:18:38]:
Right. And so now you’re like, okay, well, that doesn’t really add up. And so. And then the third thing that I came across was that you have a lot of management companies, because, once again, you have. There’s a lot of deep pockets in the panhandle area, and they buy these homes as sort of their vacation homes, and they get a management company to deal with it, and then you have a management company who’s managing 100, 200, 300 homes. And they’re not running it like a small business, like you’d be running it like a small business. And so then they are pausing listings, turning off listings, restarting listings, redoing them over and over and over again. And it starts to really screw with the algorithm as well, that’s tracking the data and trying to make sense of how much the home is making.

John Bianchi [00:19:18]:
So those are, like, three major issues that I saw when I was. When I was reviewing the data for this area. How you would then go about to figure out if the data is good or bad is through, like, the process. I’ll explain right now. Right. So the main way to just ensure that the data is accurate. And when you look on Air DNA or any of these other sites, they always have this one column called Days available or Days Tracked, which just means how long has the algorithm been tracking this? And I talked about this on the last time I was on the show as well, and I talk about it every single time. So it’s very important.

John Bianchi [00:19:55]:
So days available. Right, or days tracked. The algorithms record the calendars on a daily basis. They can’t look backwards into an airbnb calendar because there’s no information backwards. And so they have to track it on a day by day basis. And so they have to be tracking it for, ideally, over 250 days to 365. And that’s how you’re going to get that almost true annual revenue number. And when you have that true annual revenue number, that’s one of the most important, important things you can possibly have.

John Bianchi [00:20:21]:
When trying to analyze a property. Right. And so first you need that, and then you also need somebody who’s a full time host. And the way you guarantee that somebody is a full time host is that they have reviews almost every single month throughout the entire year that they’ve been managing the home. Because anyone who manages an Airbnb, you know that you get a couple or 1, 2, 3, 4 reviews every single month. Right. Other than in the slow season. And so if you’re going to be trying to make sense of the data within the panhandle area, first off, you’re going to run into a lot of bad data, but you’re going to come across some of these listings that have been tracked for over 250 days.

John Bianchi [00:20:59]:
And they do have a good amount of reviews every single month for the following 10 to 12 months that they’ve been tracked for. And so when you get that combination of those two things, that’s where you start to know like, okay, I can trust these numbers that I’m looking at. I can trust the data that I’m looking at when I’m, if I’m going to go out and buy my own home based off of the numbers on this software, does that make sense?

Avery Carl [00:21:21]:
Yeah, absolutely.

John Bianchi [00:21:22]:
Okay, good. I’ve been practicing explaining that because it’s, it can be complicated. I’m trying to make it not complicated.

Avery Carl [00:21:30]:
No, that was great. So I know you said almost true income, so why do you say almost true and not true income?

John Bianchi [00:21:40]:
Well, because the way that the softwares are working is they are just, they have an algorithm which tracks the data and it does its best to predict how much the property is actually making, but it’s never 100 accurate. So it’s very rare that you’ll, you’ll, you’ll find like if I had an Airbnb listing and I went on to air DNA, Price Labs, Rabu, any of these sites and saw how much they thought it was making, it’s almost never exactly how much I actually made. Right. And then, and that’s very true across the board. And so there’s a bit of a variance between how much people are actually making and what the sites are saying right now. You can buy. The way that you, the way that I deal with this is you just get 10 to 20 if you can comps that are all roughly doing within a certain range. And then what happens is you can see a pattern from the ones that are doing.

John Bianchi [00:22:40]:
Let’s say you have 20 homes and the, the, the one doing the best is doing 200,000 and the one doing the worst is a hundred thousand. And as you go through the data, it’ll start to make sense that the top home is making 200,000 because it’ll be a much nicer home, more luxurious, well put together, photographed perfectly. And then as you start going down, the homes start getting less luxury, less, you know, as nice. Maybe the photos start falling off and they’re not done as well and it starts to make logical sense as to why one home is making 200,000 and why one home is making 100,000. And so even though we don’t know for sure that the data, even though we know the Data is not 100% accurate with the numbers it’s providing, if you have enough comps that you’re basing it off of, then you can start to see like a general trend and it’s enough data to sort of even out that variance that’s happening when they’re recording the data. Does that make sense?

Avery Carl [00:23:35]:
Yeah, absolutely. And there’s, I think a lot of new investors, they say things like, well, I want to see the real data, I want to see the real income numbers. And we just, that’s not a knowable number without the entire short term rental community opening up their books to the public. Basically.

John Bianchi [00:23:55]:
Correct. And which I thought about that so many times. I’m like, how could I get everyone to give me their data? But they just wouldn’t. Right. Because they wouldn’t want to give away their secret sauce or their secret area or whatever it may be, unfortunately. So it is what it is. But what I will say is that I’ve analyzed hundreds of properties and Techvestor has bought 80 plus properties and we have about 40 of those that are up and running. And I’ve made a prediction on how much every single one of those properties would make.

John Bianchi [00:24:25]:
And with the process that I go through by cleaning that data and getting the right information, I’ve been off by 15 to 16% in a conservativeness, which means that if I said the property was going to make 100,000, it’s actually making 115,000. So even though it’s not 100% accurate, it’s close enough for you to be able to make the right prediction on how much that property would end up making once you put it together.

Avery Carl [00:24:54]:
Wow. Okay.

Chuck Kramer [00:24:56]:
Well, it’s a good time to ask about what is in those numbers.

John Bianchi [00:25:01]:
What do you mean by that?

Chuck Kramer [00:25:03]:
Well, we frequently see questions from people that aren’t clear about what’s included in those numbers. They’re seeing is that is that gross? Is it including cleaning fees? Is it including taxes?

John Bianchi [00:25:15]:
Yeah, good question.

Chuck Kramer [00:25:16]:
What isn’t in there?

John Bianchi [00:25:17]:
So, first thing, what I want to say is that each software does a little bit differently, but on every single one of these softwares, they have a section on the website called Glossary where you can go and look up their definition for annual revenue. And so then you can understand what they’re including in the revenue number that they’re showing you. I do know a couple of them offhand. So airdna, first off, none of them include taxes and service fee that does it. They never include that because that’s not what goes to the host. They understand that’s not what goes to the host, so why would they ever include it? Right now, Air DNA includes the nightly rate and the cleaning fee. So they have that in there, whereas Price Labs and Rabu, they don’t have the cleaning fee in there. And so you’ll see it’ll look like they’re making 10, $20,000 less.

John Bianchi [00:26:09]:
But really that’s just because they don’t have that cleaning fee in there. And you can once again figure that out by checking the glossary. And I’m only naming a couple of softwares here, there’s quite a few other ones, so you can obviously go and check each one of those for yourself. Yeah, that was a good question, though.

Chuck Kramer [00:26:26]:
Well, and I can’t imagine it’s getting any easier with, you know, the pressure that Airbnb is putting on some people to do away with cleaning fees or reduce them. And I mean, even picking out five homes from the same platform from the same analytics company, you may not be getting the same picture because this person’s absorbing their cleaning fees, this other one is charging extra for it, and yet that, that particular data provider takes out the cleaning fee. So there’s still questions, right?

John Bianchi [00:26:58]:
Yes, but that’s sort of getting into the. The. The way. Okay, what you’re saying is, you know, some people make money off their cleaning fees, some people don’t make money off their cleaning fees. And so then, therefore, you know, how should I think about it? The way that I’ve always thought about it is I want to know how much somebody is making between the nightly rate and the cleaning fee. I want, I want to understand how much these properties are making with those two combined. Because really, when it comes into your bank account, it comes together. Who cares? Right? Then the next.

John Bianchi [00:27:28]:
So once I have that number, let’s say it’s a hundred thousand, then I’m just running all my expenses to figure out what my net profit is going to be regardless if I’m making money off the cleaning or not. I’m just curious if I’m going to make money from that property overall. And that’s a part of the due diligence of. Okay, now that I have this top line number, what are my expenses? Start calling the cleaning companies and seeing if you can profit from the cleaning or not. Not that it’s going to make a difference for if you should get that property or not. Because you can lose money on the cleaning fee but still make money on the, on the, on the average nightly rate. So. Right, that’s my thoughts on that.

Chuck Kramer [00:28:03]:
Okay. And I guess one, one of the points I was trying to make and because I’m what I watch the market very closely here and I’m noticing that and I’m going to pull a number out. I don’t know. This is exact, let’s say about 5% of the people are no longer charging cleaning fees. It’s folded into their nightly rate. So as an example, their average, their adr might be $200. So when you’re looking at something from Air DNA for this particular property’s Airbnb booking, you’re going to see an ADR $200. But if you go to Rabu.

John Bianchi [00:28:41]:
And.

Chuck Kramer [00:28:41]:
Their Neighbor may be $180 plus a cleaning fee, which effectively makes it $200. If you go to Rabu, you mentioned it doesn’t include the cleaning fee, you’re going to see a difference between these two properties. Even though might be two condos in the same building. Now you’re going to see an ADR $200, another one with an ADR $180. I’m just saying that that makes the analysis a little bit more difficult and you need to pay attention to what those listings are actually including.

John Bianchi [00:29:08]:
Right, So I see what you’re saying, but the way that I do my analysis is I don’t pay attention to the ADR or the occupancy. I only look at annual revenue.

Avery Carl [00:29:22]:
That was my next question anyway was do you pay, do you look at ADR times occupancy or do you only look at gross revenue?

John Bianchi [00:29:30]:
Yeah, I’ll only look at annual revenue because, because people will have, you know, in June, in, in a, the peak season. On the weekend, the nightly rate is as high as it could possibly be in slow season. On the weekday it’s as low as it possibly can be. And I understand you can take the average, you can take the occupancy, you can times the two together by 365. And it’s going to tell you the annual revenue. But you know, the way I see the annual revenue is everyone has their own strategy of doing it. Like what you’re explaining here is some people remove their cleaning fee to try and get the bookings, some people keep the cleaning fee to because that’s how they’ve always done it. All I care about is how much are they making at the end of the year, how much is that total amount being made over the entire year.

John Bianchi [00:30:15]:
Then I’ll implement my strategy to be able to get there. Because the home is making $100,000 because of the amenities, the location, the number of bedrooms, bathrooms, the design, the style and all those reasons. And very little of it, in my opinion, has to do with the pricing the home. Now obviously you want to price the home properly and accurately. That’s a sort of a dead given, right? If you price it too high, you’re not going to get booked, you’re going to start bringing it down until you get booked. Now you’re priced accurately, right? So in my opinion, most people are pricing their home accurately. And that’s not where what’s driving the revenue, it’s all the amenities and features and design of the listing that’s allowing it to make that amount. And so if I can put a listing together that’s very similar or better then over that entire year, I should be able to make the same amount or more than them.

John Bianchi [00:31:07]:
Regardless of what my nightly, what their nightly rate is and what mine is going to be. Regardless of what their cleaning fee is and what mine is going to be. That makes sense. For whatever reason, I’ve never looked at ADR and occupancy. I don’t know, like it’s a standard in the industry to review those two. And almost everybody does it. But for whatever reason, I’ve never ever looked at it that way. I don’t know why.

John Bianchi [00:31:31]:
And so I always have this. The same situation happen where people are so used to understanding things from ADR and occupancy and I’m like, I just look at it from annual revenue.

January Johnson [00:31:41]:
You don’t care how they got there. You just want to know what, what.

John Bianchi [00:31:44]:
Did they get to exactly? Because it’s. Because it’s not the nightly rate that’s making them the money, it’s the pool that’s making them the money.

Avery Carl [00:31:53]:
Right? And I mean it’s, you can’t. It’s really difficult. Well, as an experienced investor, it doesn’t bother me as much but when people are new and they’re using that average daily rate, they can get really confused because they, they think that they’re going to make the same amount per night in like May, which is kind of a slow time, as they will in July. And that’s not true. And then when they get to kind of a shoulder season and their ADR is much lower, they start to freak out because, you know, things are seasonal. So you’re not going to have the same ADR in July as you’re going to have in February if get booked at all. So I, I don’t like to look at ADR for that reason because it’s.

John Bianchi [00:32:33]:
So different throughout the year and that’s fine. Right. It’s okay for your ADR to be significantly lower in those times because this, that’s the nature of the business. It is what it is. Right. It’s even okay to not get booked all of January. That’s fine too, depending on the market that you’re in. Right.

John Bianchi [00:32:48]:
All that matters at the end of the day is how much did you make over the entire year? Did you have net profit? And that’s it. Yeah.

Chuck Kramer [00:32:56]:
And you know, I think you just mentioned a really important point that sometimes gets missed with new investors. You have to look at the cash on cash over time, not on a month by month basis.

John Bianchi [00:33:06]:
Yes. Is that, is that common? Is that something common that you come across where people are looking at on a month by month?

Chuck Kramer [00:33:12]:
Well, with newer people, because, you know, you’ll, they’ll go through, maybe they’ll come on board and let’s face it, almost everywhere, June and July is, is, is a good season almost everywhere. And they’ll come on board and they’ll get that money and maybe they’ll take it out and do something with it, be able to put it back into the property, not realizing that right around the corner is a slow period and the bills aren’t going to go down.

John Bianchi [00:33:34]:
Yeah. You know what? Fun good little time for me to tell quick story. I made that exact same mistake on my first four places that I got in Chicago. We made a whackload of money over the summer and I had enough money to go and get a couple more rental arbitrage properties. And so I was like, perfect, I’m going to go out. And I spent, you know, I spent all that money on the furniture, got up and running. And then November came and we had like no bookings. And I was like, what just happened? And then, and then we’re going right into December, January, February and it just, you lose money.

John Bianchi [00:34:04]:
January, February. So I realized obviously going into the next summer I had to put a ton of money away into reserves to be able to float us through the winter so that I could get back to making money in the summer. Right.

Chuck Kramer [00:34:16]:
So that’s a good tip here for our beginners too, is that you have to look at it at least a year, if not even a little bit more at a time. Of course, if you ever worked a job for tips, you probably already know that, but.

John Bianchi [00:34:28]:
Yeah, yeah. Accurate.

Avery Carl [00:34:30]:
Yes. And another reason that that can kind of muddy the waters is. And correct me if I’m wrong, John, because you’re much more in, in the weeds on this every day than I am. The if you multiply, if you’re using air DNA and you multiply ADR times occupanc give you the wrong number because the occupancy is not based on a 365 day year, it’s based on the amount of availability in their calendar. So if they were only open for a month, but it booked the entire month, it’s going to show 100% occupancy and you’re going to use that to analyze over the entire year and you’re going to be really horribly wrong with your analysis.

John Bianchi [00:35:10]:
Horribly wrong, yeah. And I mean like especially if you’re using an average because of what I mentioned earlier, right? If you’re taking the average of all the properties in Destin and trying to figure out what the occupancy is in Destin. Well, the algorithm is picking up a ton of homes that are, they’re blocking off their calendar during the winter and the algorithm doesn’t realize that and it thinks that they’re actually getting booked and so it looks like they have higher occupancy, but in reality they don’t and that’s skewing the average to look like the occupancy is higher than it actually is and vice versa, to be honest. So there’s, it’s just not. When you’re going through data, you just need data that you can believe in, that you believe is real, that is accurate as close as possible. And only use that data. Don’t use all of it, just use the good stuff. And that’s how you don’t make a mistake when you’re actually going to buy a property.

Avery Carl [00:36:07]:
And the good stuff is the stuff that you’ve used the enemy method and sorted out into things that you know have been had at least 250 days of availability, you said, and are Closest to what you’re looking at, right.

John Bianchi [00:36:23]:
That and has at least one or two reviews every single month.

Avery Carl [00:36:27]:
Gotcha.

John Bianchi [00:36:27]:
And it’s okay. So a desk like Panhandle Market’s a great example for this. It’s okay if there’s no reviews in January and February because that’s the absolute dead season. So that makes logical sense. But if there are no reviews in July and June, that doesn’t make logical sense. Therefore it’s not good data.

Avery Carl [00:36:44]:
Makes sense. Is there anything else that you found when you were looking through the data for the Panhandle that was interesting that you might want to call out?

John Bianchi [00:36:54]:
Yeah, so I made a ton of notes and you guys, I mean, I’d love to, I’d love to. I’ll say things that I found that I thought were interesting and then you guys can tell me what your thoughts are being, you know, locals and understanding the market way better than I do. We from Tech Fester, we’ve only bought homes in the, in Panama City beach and we have some data there. We don’t have a ton of data there, but I, you know, preparing for this, I tried to do as much research as I could across all the different areas. So I did make some, some notes and some things. So one thing I wanted to mention was the, the amenities one like the, the design of the location matters a ton, but you need to design it in that Florida feel that people look for. And with a lot of the Panhandle markets, there’s sort of a higher end feel to this area. So you also can’t cheap out on any everything that you’re putting together from what I’m seeing.

John Bianchi [00:37:53]:
Right. And there’s a very like light gray, light blue sort of theme that goes through all of the top performing homes. And the way that I, you know, the way that I would recommend anyone who’s going to be getting a home within this area to decide what amenities and features to add to their home and what design to use. Just simply review all the top performing listings and see what they look like, see what their design is like, see how they put it together and then do that specifically to your listing. It doesn’t. Now these, like I said, top performing listings, these don’t have to be the homes that match up to the size of your home. These are the ones that are making the most amount of money in comparison to everyone else. And I would be specifically looking for homes that are like designed.

John Bianchi [00:38:36]:
Like you can tell when a home is overly designed or overly doing well. And sometimes when you go through the data enough, you start to find a home that is lower quality than some of these luxury homes, but yet it’s making the exact same amount of money as the luxury ones. And those are the ones you want to study more than anything because they’ve sort of hacked it, right? They’ve figured out how to pull the most amount of money out of that listing, and it usually is through the design and the amenities that they’re. They’re offering. So you really want to study that. But one thing I want, the reason I mentioned that Florida look and the beach look and those certain colors and tones is because you want to give people what they want when they’re going to that area. Right. They expect a Florida beach theme style when you’re going to that area.

John Bianchi [00:39:22]:
So give it to them. Just do it better than the other people that are doing it. The. The same applies to somebody going to the Smokies. You want to give them that cabin feel. Right. Same sort of general feel. So that I know that doesn’t necessarily have to do too much with some things.

John Bianchi [00:39:38]:
I pointed out January looks like a joke that.

January Johnson [00:39:40]:
That Sherwin Williams here only has, like, six colors. Like red. No, we don’t do red here.

Avery Carl [00:39:48]:
That’s so true. Yeah, that’s so true. I hate when we need, like, a piece of furniture for the house that we live in, because I hate beige and, like, light blue and all that. I like really bright colors and like, rock and roll stuff. And every furniture store, I’m like, everything is white or khaki, and I hate that.

John Bianchi [00:40:09]:
Fair enough. It is what it looks like. It’s. Tourists like it. Right?

Avery Carl [00:40:13]:
Yeah.

John Bianchi [00:40:13]:
I remember one time I went from Chicago to Montreal. Like, I was living in Chicago and I went to Montreal for whatever. And when I got to Montreal, there was a photo in my Airbnb of Chicago. And I remember just being, like, livid. I was like, I want photos of Montreal in my Montreal. Airbnb, not Chicago. Okay, so pcb, without a doubt, has the most listings by far in comparison to all the other ones. Destin is making the most amount of money in comparison to every single other location.

John Bianchi [00:40:43]:
So what I mean by that is it has the place where the most homes are doing over 200 plus thousand.

January Johnson [00:40:49]:
But the price point is higher in Destin. Also.

John Bianchi [00:40:52]:
Correct. Which is what I. Which is what I figured. Right. Yeah. The. The Destin to PCB in front. So from that, from destined to PCB is where the most revenue is being made with.

John Bianchi [00:41:06]:
Also, without a doubt, like, if you were to go from one Side to the other, that’s where you can see that there’s a ton of demand. A lot of homes are making well over 100,000. Like a lot of lot of homes are making well over 100,000. I know that’s obviously the most expensive portion out of all of that, but that is definitely where the most money is being made. I, and personally, if I was going to be going into this, so I thought, I sort of thought about it. If you had asked me the question of where would I go if I were to go in this area and how would I kind of get there? I took the raw data for every single one of these different locations and then I stacked, I cleaned it up and I stacked it all up next side by side. And there was a couple of ones that were kind of obvious as to where there wasn’t a lot of demand because the revenue was lower or dropped off fairly quickly. And that’s where I kind of see that the destined to PCB is sort of the stretch of land that would be first most curious about.

John Bianchi [00:41:56]:
And then, you know, depending on your budget of what you’re planning on doing, what I would start to do is actually try to look for homes that were in that general area, right. That matched up. And then I would try to see if I could find an inefficiency within that market. So what I mean by that is I would try to see if I could find a single family home with a pool in Panama City beach, in Rosemary beach and Destin beach, and try to see if there was a, a price difference between them and try to find which one had the most favorable purchase price. Then I would try to figure out how much those, each of those individual properties would make in each of those different locations. And I would try to figure out, figure out which place had the best ratio between revenue potential and purchase price. And then that’s probably how I’d finally decide as to which location I would actually want to buy in. Did that make sense?

Avery Carl [00:42:51]:
Yeah.

John Bianchi [00:42:52]:
Yeah. So, so anyways, that’s, that’s, that was my thought when I was going through all that. And if I were to be looking for a property, if I, it, it also depends on what you’d be going for. Right. So for myself, I’d be looking for something that might cash flow better than another location. And what I was seeing is that, you know, obviously the homes that are directly on the beach cost a crazy amount of money. However, I was able to find some listings that were single family homes with pools that were doing as well as some of these places that were directly on the beach, obviously the ones, it was just better designed, better put together, a better listing in general. Right.

John Bianchi [00:43:32]:
It offered more, but it wasn’t on the beach. However, it was still doing nearly as well as the one on the beach. And so what I would be, what I would do is I would try to learn as much as I could about those types of homes that were doing really well, not on the beach, but was a single family home that had a pool. And then I would try to find a home that was for sale that I thought I could do as well as the ones I was reviewing at the ones that I would be reviewing and see if they could match up well enough to maximize the net profit potential out of that specific home.

January Johnson [00:44:11]:
So here’s what I want to say about that too, because you know, I, and I’m sure Austin and our other agents, you know, I have a very specific map that I draw in the MLS that is designed to return the most desirable beach adjacent beach walkable to the beach properties. And I tell my, my buyers, you know, stop looking at Zillow and Redfin and all these places because if you don’t know the market, you’re going to come at me with this four bedroom house that looks like it’s such a great deal that I overlooked. And you’ve got some gym here, but A, it’s north of Highway 98 or B, it’s not in a short term rentable neighborhood. I mean, so there’s, there’s, you know, there’s places that are not short term rentable. So people who are looking without an experienced agent are going to spend a lot of time on properties that are not even in the ballpark of what, where they need to be, they’re not physically close or they’re not in a short term rentable area.

John Bianchi [00:45:03]:
I’m really glad you said that because that is exactly what I would have ended up doing right if I, if I didn’t talk to a realtor. But we did mention earlier that one of the first steps would be contact a realtor. Then at that point you then send me the properties. And then at that point I’m starting to analyze those ones specifically or those areas specifically. I guess what I’m trying to say is I’m always trying to look for an inefficiency within the market. I’m trying to figure out where there’s still a lot of demand, but yet the home prices are lower in comparison to some of the other spots. And then you get that Nice combination. That’s where the net, the, the good cash flow, cash flowing properties can come.

Avery Carl [00:45:42]:
That was very thorough.

John Bianchi [00:45:45]:
I try, I try to be. I also tried to not go on too long of a rant.

Avery Carl [00:45:48]:
No, that was great. I think that all of that was really, really great information. Does anybody else have any questions on any of this? For John? I think that we pretty much covered.

January Johnson [00:46:00]:
Can you say clean up the data? What do you mean? You might have already said this, so I apologize. But you’ve said several times I clean up the data.

John Bianchi [00:46:06]:
Yep, no problem. That’s where I’m removing homes that have less than 20 reviews. Okay. I’m, I’m only looking. I’m removing homes that have been not available, not available or tracked for under 250 days. And then I’m just, and then I’m ensuring that they have a review every single month. Yeah, three.

Avery Carl [00:46:27]:
Three points.

John Bianchi [00:46:28]:
Three points, correct. Yeah. I have a question for you guys. The, There’s a couple of property management companies in the, that cover pretty well the entire panhandle. If I say I was going to go to buy a home in Destin, right, and I asked you where to buy, you give me a general. I find a property and you guys tell me how much you think it’s potentially going to make, would it then also make sense for me to reach out to say three to five of these management companies and say hey, I’m thinking about buying this, can you. And I want you to potentially manage it for me. Could you tell me how much you think it’s going to make? Because they have all of the actual real data of how those homes are doing.

John Bianchi [00:47:10]:
So my thought is that might be a good source and I was wondering if that’s common for people to do or if you recommend for people to do that Sometimes.

Avery Carl [00:47:18]:
Yeah, there are some that are better than others. So if you’re calling like some of the bigger ones, which I don’t want to name any names but some of the bigger ones are going to have that great data. But then there are also some smaller ones that are really archaic and mom and pop and like are not going to like their properties don’t perform. You’ll see more of that over in the Mexico Beach, Cape san Blas, Port St. Joe area. More so than the Destin Panama City 30A. But yeah, I would just make sure that you’re calling the ones that have a lot of inventory rather than, you know, the small mom and pop ones that haven’t kept up with technology which I mean you can pretty well, tell from their website, but you may have to ask some probing questions to figure out exactly what they’re doing to make sure that they’re managing it well.

John Bianchi [00:48:03]:
Yeah, I think it would be like a. Okay, I want an example of a worst case scenario type of deal, at least in my, my area of, you know, what, what’s the lowest revenue I might expect? And if. Sorry, go ahead.

January Johnson [00:48:17]:
January, I was going to say a lot of times listings will come with those documents attached if the listing agent is, does enough business in that type of property or they’re just savvy and a lot of them will come with two or three different projections. And I like to tell people that, I mean, you know, they’ve got to triangulate the data. They got to get more than just one thing. They’ve got to, you know, kind of average some things together. And then again, like you said, I, I’ve been giving partial good advice, so now I’m going to give better advice. But definitely looking at the, the, you know, what do the pictures look like, what does the furniture look like? I mean, I see a lot of property and I go into places and I’m like, I can’t believe this place is doing XYZ in income. I think you can do way more if you get rid of this Facebook marketplace mom and dad furniture, you know, from the, whatever it was and like you said, elevate the decor. And it’s not that difficult to do.

January Johnson [00:49:10]:
And so I think that there’s a lot of value to be added there. But yeah, I would sometimes they come.

John Bianchi [00:49:15]:
With projections to talk about what you just said there, where it’s like add this or add that to make it make more money. I would just want to add a little bit of advice onto that because each market has their own revenue drivers. Like there’s certain things within certain markets that just make a property way more money than something else. Right. There’s some markets where if you add a hot tub, you make 10, $20,000 more. There’s other way you add a hot tub, but it does nothing. And so the way that you can figure out what are the main revenue drivers for your location are to study all of the top performing listings. If there’s 50 homes that are all doing extremely well, I would be reviewing every single last one of them to find the most common amenities across the top.

John Bianchi [00:49:59]:
So it’s always about which ones do they all have or mostly all have. And those are going to be the amenities that I’m going to want to add first and Those are the ones I’m going to make sure my property has. And then if you want to get more creative and add additional things that are outside of that that might be a little bit more unique and set your property apart, then, sure, you can go and add those. But always start with the stuff that everybody has so that you’re not falling behind. That’s. That’s my. My advice on that. So it is possible to elevate the property by adding certain features and amenities.

John Bianchi [00:50:27]:
Just make sure you’re adding the right ones is my. In my opinion.

January Johnson [00:50:31]:
So, for example, it’s not always possible to add a pool. I mean, you know, the lot’s too small, it’s too expensive. Whatever the regulations are, the setbacks aren’t. Aren’t there. What are some other revenue drivers that you see in the Panhandle?

John Bianchi [00:50:46]:
Well, for. Well, first off, if you don’t have a pool, then you should be comping based off of properties that don’t have a pool.

Avery Carl [00:50:51]:
Of course.

John Bianchi [00:50:52]:
Yeah. And then you’re reviewing that. I wanted to get even more in depth with the amenities, but that’s why I only had really. The design was a huge thing that I was seeing there. Game rooms are always, always really crucial. When I say game rooms, I’m saying a pool table in that room, in a living room, if you can, because a pool table is something that people can spend hours around and. And play over and over again, and four people can play, and it’s very communal, so it makes for a great activity. But, you know, it’s not as great for kids.

John Bianchi [00:51:20]:
So if it depends on if you want to focus on kids or not, if you want to focus on kids and, you know, the arcade games and the foosball table and that stuff is a little bit better for them. But, you know, golf carts, bikes, those things I saw a lot. One thing I didn’t see, which I thought was very interesting, was, like, backyards that were done to the nines, sort of designed with hanging lights, really beautiful seating areas. Some maybe like little mini putt areas back there, and maybe a jungle gym, if you could add something back there. I don’t know. Are you guys allowed to have fire pits in the back as well? Or even just propane fire pits? Right. I wasn’t seeing a ton of that, and I thought that that would be such an easy way to have an advantage over everyone, because backyards are everything when it comes to an Airbnb, in my opinion, because you can create a little oasis in the backyard that people can sit out Hang out and feel like they’re in this mini resort that they paid for. Right.

John Bianchi [00:52:12]:
And if you can just fill it properly with all these different designs, then I think that gives you an advantage over everyone.

January Johnson [00:52:18]:
I think fire gives me hives. It’s like, I want people. Do I want people drunk people on vacation, building. I actually had some. Some people build their own fire pit in my backyard once.

Avery Carl [00:52:30]:
Oh, my gosh.

January Johnson [00:52:31]:
My lawn guy saw it and called me because he does all my properties. He’s like, you got a problem over there? And they had dragged, like, some cinder blocks and some. They had, like a landscape timber that they found in the alley. And I was like, really? Yeah. So fire pits make me a little nervous. But I did just sell a house with a beautiful playground equipment in it that the people we said, you know, here’s our offer, and the playground equipment stays. And I’m sure they were like, oh, thank God. We didn’t want to move the playground equipment anyway.

January Johnson [00:53:02]:
But that was a lovely feature. I rarely see that.

John Bianchi [00:53:05]:
Yeah. I mean, the. Another way to think about it is who are. Who’s your archetype? Who’s your. The person who’s going to be staying at the home. Right. And what do they care about the most? And I would. I would assume that for Destin and the whole entire panhandle area.

John Bianchi [00:53:19]:
I don’t know why I keep saying Dustin, but the entire panhandle area is going to be families right when they’re going. And it’s generally. This is just. In my opinion, it’s generally going to be the mom who makes the decision as to what location that they’re going to be going into. And in my opinion, the mom cares about ensuring that the kids are going to have a great time there, but also ensuring that it is looks good and it’s well designed. It’s kind of put together and meets the criteria of what they care about. So it’s a combination of those two things. So if I would be putting together a home, I’d be putting it together to make the mom happy, but also to allow her to make her kids happy by giving them a space to play, hang out, have a lot of fun while they’re at the home.

John Bianchi [00:53:54]:
Even though they’re going to spend the majority of time at the beach, I still want them to be able to have their own space at the home and enjoy it as much as possible with whatever games that they might enjoy.

Avery Carl [00:54:04]:
Awesome. Well, wow. This was very, very thorough. Very informative, guys. Thank you all so much for everything that you Contributed. Anybody have any other points they want to hit on or questions they want to ask John before we go?

January Johnson [00:54:20]:
So I want to ask about proximity to the beach. Obviously, beach is more important than being on the beach is better than not being on the beach or closer is better than farther. But a lot of times buyers will ask me, well, I hear I have to be one block away, two blocks away, three rows back, whatever. So how do you, I mean, do you use that in your data when you look at the locations of properties and how walkable it might be if everything else is equal?

John Bianchi [00:54:45]:
Yep. Whenever I go into a market, I’m always trying to prove or disprove that the location matters. And the way that you do that is you get all of your good pieces of data and then you plot it onto the map. Because when you have the raw data, you generally have the lat and the long. And you can use a software on Google called My Maps, and then you can plot it all onto a map. And then what I always look for is I try to find the homes that are further away from the normal location that you would think does best. So, you know, in this scenario, being one block off the beach tends to be the best place to go. Well, I want to take a look at the homes that are 10 blocks off the beach, and I want to see how well they’re doing.

John Bianchi [00:55:22]:
And what you might find right off the bat is that they’re all making significantly less. However, there are times where you find that they’re doing just as well. And so then what I would try to do is take a look at the home that’s 10 blocks off, and I’d figure out what it looks like, Is it a super high end luxury home, is it an average home, whatever it may be, and then use the enemy method to then match it up with the homes that are one. Find one that’s very comparable, that is one block away from the beach. And then I want to see if there’s a revenue difference, variance between those two, because those would be. That’d be like taking the exact same home and putting it one block away from the beach or 10 blocks away from the beach. And then you’d be able to see very clearly if there’s a revenue difference between those two and. And then that will tell you if it matters or not.

John Bianchi [00:56:06]:
Does that make sense, Jan?

January Johnson [00:56:08]:
It does, yeah. The people just ask me all the time, you know, how many blocks of the way away is okay and how many is too far or, or, you know, there’s some parts of Panama City beach that are walkable to the beach, but they might be more than three blocks. And it’s still a great location. But, you know, they have in their head that they heard one time, it needs to be this far. And so I have to convince them that, no, this is really a good area here. And of course you want to look at the data, but.

John Bianchi [00:56:32]:
Well, this is. So this is actually where I think you find the inefficiency within the market. So generally, the homes that are 10 blocks away compared to a block away, there’s a huge price difference in the purchase price. Right. So if you can prove. Disprove or sorry, if you can prove that the. The location does not matter as long as you can put together a beautiful listing that has all the amenities that people care about and give them that golf cart to get to the beach, then you might realize that, oh, I should actually be buying this home that’s 10 blocks away because it’s $400,000 cheaper, but it’s still going to make the same, you know, maybe $10,000 less during that entire time frame. Therefore, it’s a significantly better purchase.

John Bianchi [00:57:13]:
So. And we always try to do that. We always try to find that. That little spot that might be better to be in where you get the cheaper real estate.

January Johnson [00:57:23]:
Thanks.

John Bianchi [00:57:23]:
Yeah, no problem.

Chuck Kramer [00:57:26]:
We throw a monkey wrench into that.

John Bianchi [00:57:28]:
Let’s do it.

Chuck Kramer [00:57:29]:
Based on the area. You know, private beaches are a huge deal here. You know, it’s been tied up in litigation for years and years and years. So beach access, you know, you might look at a map and that house is a block off the beach, but it might actually be five or six blocks or. Or even more to get to a beach access point.

John Bianchi [00:57:51]:
That’s.

Chuck Kramer [00:57:52]:
How do you factor that in?

John Bianchi [00:57:54]:
Yeah, so, I mean, factor that in after today. Yeah, that’s an interesting thing because it’s an interesting scenario because you know that. Does the random person coming from the other side of the country know that, or is it marketed and advertised in their listing? And so, you know, this is. Comes back again to talking to a realtor to understand these little nuances of the market before you start to analyze it. I am promoting you guys like crazy on this, on this podcast. But, I mean, like, more and more proof that it just makes a ton of sense to understand those things the way that I would, knowing that I would use the exact same method that I just explained where I would then look at that home that was actually six blocks away, even though it looks like it’s one block away. And see if there’s a revenue difference between the home that is truly one block away from the beach and seeing and trying to find two homes that are very comparable and then seeing if there was a revenue difference between those two, it would be, it would be the same thing. It’s just that I wouldn’t naturally think to do that unless I had you had explained that to me about the market.

John Bianchi [00:59:02]:
Sure. Yeah.

Chuck Kramer [00:59:03]:
And that makes sense. We, you know, it’s estimated we get about 22 million visitors a year between PCB and Navarre. So even if people get here and find out that the place is further from the beach than they expected, there’s plenty of new people coming in to stay there the next time. So there’s a lot of room for first timers.

John Bianchi [00:59:24]:
Yeah, exactly. I mean, it’s not a great long term strategy, but there is that, that potential there. Interesting.

Avery Carl [00:59:34]:
Well, guys, thank you all so much for your time and for coming on. And if y’ all want to buy with us on the Emerald or Forgotten coast with January or Austin or any of our other agents, you can email us at agents the ShortTermshop.com or if you just have further questions, we have open office hours every Thursday and you can sign up for those at str. Thanks everyone.