In a recent interview with CNBC, Airbnb CEO, Brian Chesky, announced that his company will now be needing millions of new Airbnb hosts to use their platform for short-term rentals. This is part of the company’s plans to meet the increasing demand for vacation rentals as activity continues to pick up in the travel industry.
According to Chesky, Airbnb expects a high-class scenario where there will be more guests seeking more rentals than the hosts available. As a result, the company needs to skyrocket its Airbnb listings as quickly as possible.
Finally, a breath of fresh air for real estate investors and Airbnb hosts
A torrid 2020 saw the pandemic negatively impact many housing markets in the U.S., including short-term rentals like Airbnb. There was a lot of talk around a housing market crash as sales for apartments for rent dwindled across the board. At some point in March, Mashvisor, a real estate analytics company, reported how Airbnb hosts were experiencing mass cancellations and losing money to the sudden emergence of the Coronavirus, hitting major states like Florida and Arizona. Some hosts even reported 0% occupancy rates as more people were gripped by fear of the novel virus.
State and nationwide restrictions and COVID-19 protocols didn’t favor Airbnb hosts either as many areas in the U.S. restricted hosts from leasing their homes to curb the spread of the virus. For other cities with lesser restrictions, Airbnb hosts resorted to reducing their usual daily rates to invite more activity. It worked for some but generally didn’t do much as travel bans kicked into place. As a result, many investors decided against real estate investing during the early months of the pandemic, while gauging the market.
With this announcement, investors now have a more solid reason to invest in Airbnb rental properties in the U.S.
The COVID-19 vaccine is helping demand for vacation homes
The COVID-19 vaccines are one of the main factors driving growth in the Airbnb rental industry.
Although by October 2020, Mashvisor noticed a 13% increase in Airbnb occupancy rates from the falling numbers in March, especially in places like Milwaukee, Colorado Springs, Madison, and Buffalo, while other places like Georgia and Alabama continued to dwindle. However, the rollout of the COVID-19 vaccine in 2021 has started to raise hope for Airbnb hosts and real estate investors, all of whom expect higher Airbnb income in 2021.
According to the Centers for Disease Control and Prevention, 39% of the country’s adult population has been fully vaccinated. Also, lockdown restrictions are being relaxed in many counties, meaning more people are now allowed to travel across the country. All the signs point to increased activity in the travel and hospitality space, as well as Airbnb hosts who can now recover from a relatively underwhelming last year.
Related: How a COVID-19 Vaccine Could Impact the US Housing Market 2021
Airbnb is doing everything it can to onboard more hosts
Millions of people haven’t been able to leave the confines of their house or neighborhood in over a year. And Airbnb expects the travel rebound post-pandemic to be “unlike anything we’ve ever seen”. So, the company is going all out to have as many Airbnb hosts to cater to this growing demand.
For instance, it has launched a campaign solely dedicated to getting more hosts called Made Possible by Hosts. The company wants to create a sense of nostalgia via series of advertisements. According to the CEO, Chesky:
All we have to do is just continue to tell our story of Airbnb, and the benefits of hosting. And we are seeing a lot of interest.
Also, there’s a general consensus that Airbnb will truly recover from the pandemic soon enough. According to Brian Nowak, a Morgan Stanley analyst, Airbnb is expected to be the only one growing among its competitors such as Booking Holdings, Expedia, and other vacation rental sites. He attributes this to the fact that people will choose local and more rural locations when returning to travel activities and as a result, will prefer an alternative vacation rental like Airbnb.
Related: What Airbnb Occupancy Rate Can You Expect in 2021?
The best locations for Airbnb cash on cash return
As more Airbnb hosts start looking for the most profitable locations to invest in Airbnb rentals, Mashvisor has conducted nationwide real estate market analysis to compile a list of some of the best cities for Airbnb investment in the U.S. right now:
Wakefield, Massachusetts
- Median Property Price: $639,950
- Price per Square Foot: $306
- Monthly Airbnb Rental Income: $6,955
- Airbnb Cash on Cash Return: 9.23%
- Average Airbnb Daily Rate: $195
- Average Occupancy Rate: 66.26%
Beaumont, Texas
- Median Property Price: $288,284
- Price per Square Foot: $127
- Monthly Airbnb Rental Income: $2,525
- Airbnb Cash on Cash Return: 8.45%
- Average Airbnb Daily Rate: $114
- Average Occupancy Rate: 51.39%
Toledo, Ohio
- Median Property Price: $108,000
- Price per Square Foot: $86
- Monthly Airbnb Rental Income: $1,816
- Airbnb Cash on Cash Return: 8.08%
- Average Airbnb Daily Rate: $106
- Average Occupancy Rate: 63.70%
Covington, Georgia
- Median Property Price: $288,072
- Price per Square Foot: N/A
- Monthly Airbnb Rental Income: $3,476
- Airbnb Cash on Cash Return: 8.07%
- Average Airbnb Daily Rate: $166
- Average Occupancy Rate: 63.81%
Levittown, Pennsylvania
- Median Property Price: $304,590
- Price per Square Foot: $220
- Monthly Airbnb Rental Income: $3,569
- Airbnb Cash on Cash Return: 8.00%
- Average Airbnb Daily Rate: $110
- Average Occupancy Rate: 77.50%
Modesto, California
- Median Property Price: $443,983
- Price per Square Foot: $302
- Monthly Airbnb Rental Income: $4,356
- Airbnb Cash on Cash Return: 7.89%
- Average Airbnb Daily Rate: $111
- Average Occupancy Rate: 71.81%
Lansing, Michigan
- Median Property Price: $205,337
- Price per Square Foot: $115
- Monthly Airbnb Rental Income: $2,323
- Airbnb Cash on Cash Return: 7.00%
- Average Airbnb Daily Rate: $190
- Average Occupancy Rate: 79.50%
Loveland, Ohio
- Median Property Price: $335,186
- Price per Square Foot: $170
- Monthly Airbnb Rental Income: $3,019
- Airbnb Cash on Cash Return: 7.00%
- Average Airbnb Daily Rate: $165
- Average Occupancy Rate: 72.00%
Bishop, California
- Median Property Price: $561,300
- Price per Square Foot: $291
- Monthly Airbnb Rental Income: $5,074
- Airbnb Cash on Cash Return: 6.94%
- Average Airbnb Daily Rate: $187
- Average Occupancy Rate: 79.21%
Chesapeake, Virginia
- Median Property Price: $330,395
- Price per Square Foot: $173
- Monthly Airbnb Rental Income: $3,832
- Airbnb Cash on Cash Return: 6.82%
- Average Airbnb Daily Rate: $165
- Average Occupancy Rate: 68.38%
Newburgh, New York
- Median Property Price: $413,684
- Price per Square Foot: $213
- Monthly Airbnb Rental Income: $4,912
- Airbnb Cash on Cash Return: 6.80%
- Average Airbnb Daily Rate: $217
- Average Occupancy Rate: 64.00%
Based on data from Mashvisor, Airbnb has always been the more profitable rental strategy compared to houses for rent on a monthly basis. And while it wasn’t the best of times for Airbnb hosts last year, the expected demand should raise the numbers exponentially in 2021.
For real estate investors looking to tap into this upcoming short-term rental surge, one of the best ways to prepare is by harnessing real-time Airbnb data from an investment property analytics tool. Mashvisor’s Airbnb profit calculator is a leader among such tools. This way, you can analyze the most profitable rental property based on profitability metrics like return on investment, Airbnb rental income, daily rates, occupancy rates, as well as getting access to other Airbnb tips to help you make the best decision.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.