Airbnb has risen, both in the US housing market and on an international scale, as a supreme and lucrative rental strategy. Like with any rental strategy, some locations are better suited for Airbnb rentals than others. The four factors that we can use to analyze the best real estate markets for Airbnb rentals are rental income, affordability, return on investment, and legality. We’ve covered the legality aspect many times, so let’s move on to the other three. This blog is about the best places to buy a rental property, specifically for short-term rentals.
Airbnb Rentals and Rental Income
Airbnb short-term rentals are like any other property type; they require rental income to become successful. The fate of income of short-term rentals is not limited to their location. It is very possible to boost an Airbnb property’s income through good reviews, renovations, and more. Still, starting Airbnb short-term rentals in the top locations can give real estate investors an edge in rental income. Here are the best places to buy a rental property for Airbnb rental income. The data is from Mashvisor’s investment property calculator, which serves as a tool for investment property analysis and real estate market analysis.
Related: Increasing Airbnb Income Using New Innovative Airbnb Services
Best Places to Buy a Rental Property for Airbnb Rental Income
1.) Mill Valley, CA – $5,121
2.) Sonoma, CA – $4,795
3.) Key West, FL – 3,921
4.) Boston, MA – $3,870
5.) Melrose, MA – $3,702
6.) Santa Barbara, CA – $3,679
7.) Anaheim, CA – $3,641
8.) Belmont, CA – $3,627
9.) Brookline, MA – $3,408
10.) Honolulu, HI – $3,376
11.) Corvallis, OR – $3,211
12.) San Mateo, CA – $3,155
13.) Santa Rosa, CA – $3,115
14.) San Francisco, CA – $3,009
15.) Newton, CA – $2,920
16.) Traverse City, MI – $2,918
17.) Waianae, HI – $2,827
18.) Nashville, TN – $2,814
19.) Mashpee, MA – $2,798
20.) Wareham, MA – $2,790
21.) Scottsdale, AZ – $2,647
22.) Miami, FL – $2,559
23.) Oakland Park, FL – $2,510
24.) Flagstaff, AZ – $2,485
25.) Quincy, MA – $2,481
Airbnb Rentals and Affordability
What’s just as important, for both Airbnb rentals and traditional rentals, as profitability is their affordability. A real estate investor can increase both Airbnb and traditional rental income by enhancing an investment property. An investor can’t change a property’s price to what may better suit him/her, though. Instead, the real estate investor will have to look for worthwhile deals. Some of the top locations for affordability, however, have low property prices across the board. Here are the 25 top locations for affordability. Once again, the data is compiled by Mashvisor’s investment property calculator, through the uses of real estate market analysis and investment market analysis. It’s worth noting that of these best places to buy a rental property, not one is near the US housing market average price of $350,000.
Related: How do I price my Airbnb property?
Best Places to Buy a Rental Property for Affordability
1.) South Bend, IN – $139,000
2.) Troy, NY – $153,639
3.) Milwaukee, WI – $160,630
4.) Bridgeport, CT – $185,000
5.) Memphis, TN – $185,952
6.) Harrisburg, PA – $187,450
7.) Ypsilanti, MI – $187,949
8.) Indianapolis, IN – $188,687
9.) Louis, MO – $189,749
10.) Tuscaloosa, AL – $202,985
11.) Columbia, SC – $203,753
12.) Las Cruces, NM – $204,255
13.) Columbus, OH – $207,216
14.) Dubuque, IA – $208,000
15.) Baltimore, MD – $218,531
16.) Green Bay, WI – $231,925
17.) Avondale, AZ – $233,021
18.) Louisville, KY – $233,685
19.) Cleveland, OH – $236,112
20.) North Miami, FL – $242,531
21.) Lake Worth, FL – $243,933
22.) Gainesville, FL – $244,971
23.) Oakland Park, FL – $247,707
24.) Philadelphia, PA – $250,629
25.) Fort Myers, FL – $254,245
Airbnb Rentals and Return on Investment
When rental income is compared to property price, the return on investment is measured. The top three ROI metrics include cash flow, cap rate, and cash on cash return. Cash on cash return and cap rate are easily displayed because they are not as subjective as cash flow.
ROI can be changed, just as rental income. Still sometimes it’s best to invest in the best real estate markets for a certain metric, just to get an edge in investing. Here are the best places to buy a rental property for Airbnb return on investment.
You’ll notice that these best places to buy a rental property do not include cash flow. Because cash flow is a more subjective metric, it requires some mandatory input from an investor to estimate. To do that, hop on to Mashvisor’s investment property calculator for an investment property analysis.
Related: What are the Best Performing Cash on Cash Return Markets in the US?
Best Places to Buy a Rental Property for Airbnb Return on Investment
1.) Dubuque, IA – Airbnb Cap Rate / Cash on Cash Return: 10.7%
2.) South Bend, IN – Airbnb Cap Rate / Cash on Cash Return: 8.68%
3.) Traverse City, MI – Airbnb Cap Rate / Cash on Cash Return: 8.62%
4.) Wareham, MA -Airbnb Cap Rate / Cash on Cash Return: 8.38%
5.) Oakland Park, FL – Airbnb Cap Rate / Cash on Cash Return: 8.35%
6.) Waianae, HI – Airbnb Cap Rate / Cash on Cash Return: 7.96%
7.) Green Bay, WI – Airbnb Cap Rate / Cash on Cash Return: 7.91%
8.) Tuscaloosa, AL – Airbnb Cap Rate / Cash on Cash Return: 7.41%
9.) Bloomington, IN – Airbnb Cap Rate / Cash on Cash Return: 6.56%
10.) Colorado Springs, CO – Airbnb Cap Rate / Cash on Cash Return: 6.38%
11.) Anaheim, CA – Airbnb Cap Rate / Cash on Cash Return: 6.25%
12.) Nashville, TN – Airbnb Cap Rate / Cash on Cash Return: 5.79%
13.) Ypsilanti, MI – Airbnb Cap Rate / Cash on Cash Return: 5.71%
14.) Bryan, TX – Airbnb Cap Rate / Cash on Cash Return: 5.55%
15.) Corvallis, OR – Airbnb Cap Rate / Cash on Cash Return: 5.44%
16.) Bridgeport, CT – Airbnb Cap Rate / Cash on Cash Return: 5.36%
17.) Silver Spring, MD – Airbnb Cap Rate / Cash on Cash Return: 5.22%
18.) Blacksburg, VA – Airbnb Cap Rate / Cash on Cash Return: 5.16%
19.) Fort Myers, FL – Airbnb Cap Rate / Cash on Cash Return: 5.1%
20.) Sonoma, CA – Airbnb Cap Rate / Cash on Cash Return: 5.06%
21.) Las Vegas, NV – Airbnb Cap Rate / Cash on Cash Return: 5.05%
22.) Ithaca, NY – Airbnb Cap Rate / Cash on Cash Return: 4.9%
23.) Key West, FL – Airbnb Cap Rate / Cash on Cash Return: 4.77%
24.) Gainesville, FL – Airbnb Cap Rate / Cash on Cash Return: 4.75%
25.) Troy, NY – Airbnb Cap Rate / Cash on Cash Return: 4.69%
There you have it, the best places to buy a rental property for Airbnb rental income, affordability, and return on investment. These are some of the best real estate markets for both Airbnb rentals and traditional rentals and Airbnb and traditional rental income. So, also consider buying traditional rentals in these best places to buy a rental property.
To analyze more of the US housing market, to find the best rental strategy for you, and to find the best places to buy a rental property for Airbnb and traditional rental income and Airbnb rentals and traditional rentals, start your trial with Mashvisor’s investment property calculator. Its real estate market analysis and investment property analysis will help you find the best places to buy a rental property in no time.