One of the best ways to make money in real estate is by investing in Airbnb rentals. Real estate investors generate positive cash flow and make a profit from their Airbnb rental income.
However, owning an Airbnb rental that is guaranteed to be profitable is not as easy as people make it seem. The key to having a successful Airbnb investment or any other type of investment is LOCATION! We know it and you know how important location is in real estate.
Finding a real estate market that offers high Airbnb rental income can be done stress-free with the right real estate investment tools. And where can you find these tools? At Mashvisor of course! We were able to find the top-performing real estate markets for high Airbnb rental income in a matter of minutes. Before we get into the numbers, lets first talk a little about Airbnb rental income and what factors affect it.
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What Factors Affect Your Airbnb Rental Income?
1. The Location of Your Rental Property
Like I said before, the most important feature for any successful real estate investment is location. It is the first thing that property investors should take into consideration because it is the one thing you can’t change once you purchase the property. Carefully research the market and the different areas before making any decisions.
Think about what your goals are. For Airbnb rentals, you are aiming to find a location that offers high Airbnb rental income. What locations are best for this investment strategy? Areas that attract tourists and have a high demand for rental properties have the best real estate markets for Airbnb investments. Always remember high demand=high Airbnb rental income!
In addition to finding a real estate market that is high in demand, you need to also check whether or not investing in Airbnb is legal. There have been ongoing laws and regulations concerning short-term rentals that were enforced on numerous cities across the US. Check to see what the Airbnb laws in your city are to avoid falling into troubles.
2. Airbnb Occupancy Rate
The number one thing that most real estate investors are afraid of is having a vacant property. To get a high Airbnb rental income, you need to have a property that has a high Airbnb occupancy rate- the amount of time during the year that your property is occupied by tenants.
Having a high Airbnb occupancy rate not only depends on the location of your property but also on how well you market your rental property and your Airbnb reviews. So if your property ranks high on Airbnb search and has positive reviews from previous guests, you can guarantee that your property will be high in demand and have a high occupancy rate. High demand = high occupancy rate= high Airbnb rental income!
3. Property Management
Professional property management can be very costly to have. Most professional property management companies charge 8-12% of their property’s rental rate. How you decide to manage your Airbnb rental can affect how high or low your Airbnb rental income will be. Overall, short-term rentals require much more care than long-term rentals. This is mainly because you have tenants moving in and out constantly.
Ask yourself, do you have the time and effort to look over and manage your Airbnb rental? If you don’t live close by or have more properties to look after, then hiring professional management is your only option.
How to Boost Your Airbnb Rental Income
Your ultimate goal is to generate the highest Airbnb rental income possible, right? If that’s your goal, then you need to take the following tips into consideration to ensure you get the most out of your Airbnb rental property.
Tip #1: Market Your Airbnb Rental
How you advertise your Airbnb rental determines how you attract guests and thus how much Airbnb rental income you make. Think about different ways to market your rental property to increase bookings. Do you want to list your rental property on home rental websites like Airbnb? Or do you want to advertise your rental property on different social media websites?
When advertising your Airbnb rental property, be sure that the information you provide is accurate. So many Airbnb hosts over-exaggerate when describing their property and end up getting bad reviews from unsatisfied guests. Also, provide pictures of the inside of your property and maybe even consider making a video. People love visuals!
Another great tip would be to not limit the type of guests you’re renting out to. You want your Airbnb listing to be attractive to all sorts of people like families, business people, and travelers.
Tip #2: Increase Exposure
There are a number of different real estate investing websites that will allow you to list your rental property to increase exposure. Some of the many websites include Trulia, Zillow, and FlipKey. Do not limit your rental property to just one website. Exposing your Airbnb property will boost your Airbnb rental income because more guests will see it.
Tip #3: Charge the Right Price
Airbnb hosts have full control over the price they charge for their rental property. However, setting a price too high will lure away guests and setting a price too low will have you miss out on a high return on investment. How can you determine the “right” price to charge? One tip is to check out the pricing of other Airbnb rentals in your area and compare them to yours. This is generally done by conducting a real estate market analysis (comparative market analysis).
Mashvisor has all the necessary tools to help you discover the optimal price for short-term rentals in your city of choice. To learn more about our product, click here.
Another thing to keep in mind is the seasonal demand for your Airbnb rental property. There are certain times of the year where the demand for Airbnb is high therefore allowing investors to raise their rent charge. On the contrary, there are times during the off-season where lowering your rent charge can be the smart thing to do. Always adjust your price according to the changes around you.
Tip #4: Improve and Upgrade
Upgrading your property and making improvements adds value to your Airbnb rental and thus, increases your Airbnb rental income. You don’t have to overspend on improvements to make your property more appealing to guests. Set a budget for improvements and only upgrade the quality of life for your rental property. You can add new furniture or give your property a new paint job.
Tip #5: List All Year Round
One of the best ways to boost your Airbnb rental income is by listing your property all year round. Do not just focus on vacation seasons; making money is still possible during low seasons as well. Your goal should be to keep your rental property occupied all the time in order to generate high Airbnb rental income.
NOTE: Check your city’s Airbnb regulations to see if there are restrictions concerning the amount of time you are allowed to rent out your property.
Top Real Estate Markets for High Airbnb Rental Income in 2018
I previously mentioned that we were able to pull out the best-performing real estate markets using Mashvisor’s real estate investment tools. The numbers below were taken from Mashvisor’s investment property calculator. Here are the 5 best real estate markets for high Airbnb rental income in 2018:
1. Honolulu, HI Real Estate Market
- Median Property Price: $939,665
- Airbnb Rental Income: $4,065
- Airbnb Cash on Cash Return: 4.08%
- Airbnb Cap Rate: 4.08%
- Airbnb Occupancy Rate: 68.24%
Best performing neighborhood:
Waikiki, Honolulu, HI
- Median Property Price: $698,787
- Airbnb Rental Income: $3,766
- Airbnb Cash on Cash Return: 5.36%
- Airbnb Cap Rate: 5.36%
- Airbnb Occupancy Rate: 79.32%
2. San Antonio, TX Real Estate Market
- Median Property Price: $293,510
- Airbnb Rental Income: $2,294
- Airbnb Cash on Cash Return: 2.84%
- Airbnb Cap Rate: 2.84%
- Airbnb Occupancy Rate: 44.39%
Best performing neighborhoods:
Champions Ridge, San Antonio, TX
- Median Property Price: $409,721
- Airbnb Rental Income: $4,847
- Airbnb Cash on Cash Return: 7.13%
- Airbnb Cap Rate: 7.13%
- Airbnb Occupancy Rate: 50.33%
Heritage, San Antonio, TX
- Median Property Price: $170,034
- Airbnb Rental Income: $2,627
- Airbnb Cash on Cash Return: 7.09%
- Airbnb Cap Rate: 7.09%
- Airbnb Occupancy Rate: 60.94%
3. Tampa, FL Real Estate Market
- Median Property Price: $375,416
- Airbnb Rental Income: $2,288
- Airbnb Cash on Cash Return: 3.21%
- Airbnb Cap Rate: 3.21%
- Airbnb Occupancy Rate: 48.22%
Best performing neighborhood:
Sulphur Springs, Tampa, FL
- Median Property Price: $167,305
- Airbnb Rental Income: $1,977
- Airbnb Cash on Cash Return: 7.76%
- Airbnb Cap Rate: 7.76%
- Airbnb Occupancy Rate: 50.40%
4. Denver, CO Real Estate Market
- Median Property Price: $491,392
- Airbnb Rental Income: $3,241
- Airbnb Cash on Cash Return: 3.17%
- Airbnb Cap Rate: 3.17%
- Airbnb Occupancy Rate: 61.36%
Best performing neighborhood:
Gateway-Green Valley, Denver, CO
- Median Property Price: $367,500
- Airbnb Rental Income: $3,766
- Airbnb Cash on Cash Return: 6.08%
- Airbnb Cap Rate: 6.08%
- Airbnb Occupancy Rate: 51.14%
Click here to start looking for and analyzing different investment properties in any state, city, and neighborhood across the US housing market!
Airbnb Rental Income – A Final Word
Investing in Airbnb rentals can be your golden ticket to a profitable future. That is of course if you invest in the right location! The real estate markets mentioned above are the best-performing markets for high Airbnb rental income in 2018. So don’t hesitate and take action now.
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