If you are looking to invest in short-term Airbnb rentals, you must be wondering “What are the best Airbnb locations to invest in right now?” If you want good returns on your Airbnb investment, you need to stay up to date on the latest market trends in order to know where to invest in real estate. As an Airbnb investor, you’ll especially have to keep an eye on the best Airbnb locations with good growth potential that are not yet overcrowded by competitors. You see, the most popular Airbnb locations in the US real estate market might not always be the locations that bring you the best returns, so do keep an eye out for cities under the radar.
Luckily, finding the most profitable Airbnb locations no longer requires hours of market research. Mashvisor can bring you all this information with just a few clicks! Based on Mashvisor’s Airbnb data and analytics, we chose the best Airbnb locations in terms of their average cash on cash returns. We bet some of these cities will surprise you!
We know that interpreting Airbnb regulations can cause a headache when you are scanning for the best Airbnb locations. Therefore, we made sure this list includes only those cities where running an Airbnb out of a non-owner occupied property is legal. However, there are some specific Airbnb regulations to take into account for each city. These details are mentioned under each location. So let’s jump right into the list!
#1 – Jacksonville, Florida
The first surprising city on our list of the best Airbnb locations is Jacksonville, which is a hidden gem in Florida’s real estate market. A recent PwC report expects the entire state of Florida to continue to be an attractive real estate investment market in 2019 and beyond. According to the PwC report, Jacksonville’s population growth rate is more than double that of the entire US. The real estate market in 2019 will be in no shortage of tenants and demand due to such high population growth. Although this is very positive from a traditional real estate investment point of view, there is more to Jacksonville’s potential.
The Jacksonville short-term rental market has a lot going for it, from its sunny beaches to the many sightseeing opportunities, such as the Catty Shack Ranch Wildlife Sanctuary or the last remaining plantation house. Visit Jacksonville reports record-breaking tourism visitation numbers in 2018, with 3,894,717 recorded visitors in paid accommodations. Note that these numbers are also tied to the many events organized around Jacksonville during each year. So while your investor instincts might tell you to look towards Miami or Tampa, Jacksonville is actually a hot Florida vacation spot!
Here is the market data according to Mashvisor’s Airbnb profit calculator:
Key Jacksonville Indicators:
- Median Property Price: $294,489
- Airbnb Rental Income: $2,349 (vs. $ 1,355 for Traditional Rental Income)
- Airbnb Cash on Cash Return: 4.7%
- Airbnb Occupancy Rate: 56.4%
Indeed, the indicators show that an Airbnb investor can expect pretty good rental income in Jacksonville coupled with a strong demand and appealing cash on cash return (which in some neighborhoods can reach as high as 8%). The best neighborhoods in Jacksonville for Airbnb investing in terms of their cash on cash returns are:
- East Arlington (8.0%)
- 29th and Chase (7.9%)
- Baymeadows (7.6%)
- Arlington Manor (7.1%)
- Windy Hill (6.9%)
Running an Airbnb out of a non-owner occupied property is currently legal in the Jacksonville real estate market, although some demands for regulation have been brought up. This, however, does not have to mean non-owner occupied properties will become illegal in the near future. Nonetheless, you might want to monitor these developments should Jacksonville end up on your short-list.
#2 – Atlanta
The second city on our list of the best Airbnb locations is Atlanta. So, what makes Atlanta a great city for your Airbnb investment? First of all, Atlanta is a real business hub with many multinational companies headquartered there. This means there is definitely a market for business travelers. Atlanta also attracts tourists to its many festivals, such as Dogwood and The Atlanta Film Festival. These festivals and other events attract huge numbers of visitors each year. In fact, Atlanta is the most visited destination in Georgia and welcomes an average of more than 50 million visitors a year. Following new international flight connections, major conventions, and a strong film sector, the number of international visitors in Atlanta is steadily growing. This means business for your potential vacation rental property!
Key Atlanta Indicators:
- Median Property Price: $435,221
- Airbnb Rental Income: $2,658 (vs. $ 1,993 for Traditional Rental Income)
- Airbnb Cash on Cash Return: 3.1%
- Airbnb Occupancy Rate: 45.7%
The indicators attest to Atlanta’s appeal as the city of choice for Airbnb investments, with good Airbnb rental income and a very good average CoC return, with a number of neighborhoods promising even higher returns. The best neighborhoods based on CoC return are:
- Mellwood (11.4%)
- The Villages at Carver (10.3%)
- Amal Heights (9.5%)
- Blair Villa- Poole Creek (8.5%)
- Atlanta University Center (8.3%)
But is Airbnb legal in Atlanta? This question is quite common whenever Atlanta Airbnb investment potential is brought up. Despite the confusion, rest assured that running an Airbnb in Atlanta is legal, but you do need to obtain both a business license and a hotel license to operate legally in the market. The hotel license also comes with some nice tax benefits. So, do make sure you understand these Airbnb regulations before investing in Airbnb in this growing and promising city.
#3 – Philadelphia
The third and last on our list of the best Airbnb locations is Philadelphia. There is definitely a growing tourism sector in Philadelphia. According to the Visit Philadelphia 2018 Annual Report, there were 43.3 million visitors booking some 1.1 million leisure hotel room nights in 2017. At the same time, the city witnessed its 8th consecutive year of visitation growth. Philadelphia is a cultural hotspot with a diverse food scene, world-class theater, and other cultural and historical attractions. Talk about the potential for vacation rentals! No wonder Philadelphia reached Forbes’ “10 Coolest U.S. Cities to Visit in 2018”!
Key Philadelphia Indicators:
- Median Property Price: $306,991
- Airbnb Rental Income: $2,032 (vs. $ 1,457 for Traditional Rental Income)
- Airbnb Cash on Cash Return: 3.6%
- Airbnb Occupancy Rate: 49.8%
Based on the indicators, buying an Airbnb investment property in Philadelphia could bring in a nice return on investment. With attractive Airbnb rental income and occupancy rates, this would make a good investment location. The city-level average CoC return might not dazzle you at first, but looking at the CoC return rates of some specific neighborhoods should keep Philadelphia on your radar. The best neighborhoods based on their average Airbnb cash on cash returns are:
- Kingesessing (9.0%)
- McGuire (8.8%)
- Fairhill (7.6%)
- East Park (7.6%)
- Haverford North (7.3%)
Even though Airbnb is legal in Philadelphia, be sure to check Airbnb laws and regulations governing its different neighborhoods.
We hope this list helped you spot some fresh and under-the-radar locations for your next Airbnb investment. Which one seems most promising? Share your thoughts in the comments below.
Mashvisor’s Airbnb analytics can bring you further insight into the best Airbnb locations and properties that you might otherwise overlook. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.