Airbnb real estate investing is taking over the short-term rental scene in the US and the entire world! Real estate investors should not miss out on the potential Airbnb returns waiting for them. In order to capitalize on this profit, it is best for investors to seek out Airbnb-friendly cities. One of the most Airbnb-friendly and lucrative cities in the country is the topic of our blog: Dallas, Texas. What is Airbnb Dallas like? Where should you buy an Airbnb Dallas rental property? Keep reading to learn the answers!
Airbnb Dallas Real Estate Market Data
The Dallas real estate market is one of the top markets in the US for both traditional and Airbnb investment properties. Most notably, the city was ranked number one in overall real estate prospects in 2019 by the PwC. You can learn more about investment prospects in Dallas by reading: Dallas Housing Market 2019: Is It Smart to Invest Here?
But let’s focus on the city’s Airbnb market. In terms of Airbnb analytics, the Dallas housing market is top-notch. The average Dallas short-term rental property is both very profitable and affordable. But instead of telling you this, let’s show it to you. Here are the Airbnb averages of a Dallas rental property, according to Mashvisor’s Airbnb profit calculator, which you can learn about by clicking here!
- Median Property Price: $428,223
- Price-to-Rent Ratio: 19.7
- Rental Income: $2,830
- Cap Rate / Cash on Cash Return: 1.7%
- Occupancy Rate: 54%
Why You Should Invest in Airbnb Dallas
There are three main reasons why a real estate investor should invest in a Dallas rental property for Airbnb:
Profitability and Affordability
The bread and butter to any success in Airbnb real estate investing boils down to two factors: profitability and affordability. Fortunately, Dallas short-term rentals nail these two features tremendously well.
Profitability is arguably the most prominent feature of Airbnb Dallas. The average rental income is $2,830, which is higher than the vast majority of major Airbnb cities in the country. This figure is certainly the highest in North Texas, as the combined revenue of all Dallas Airbnb investment properties in 2018 was over $37 million. This accounted for a whopping 58 percent of all Airbnb returns in Northern Texas counties.
Affordability is the second key feature of the Airbnb Dallas real estate market. The median price of a Dallas rental property is about $430,000. While it is slightly above the national median, it is well below the median prices in major metro cities. Rest assured, however, that the median property prices for the majority of the best neighborhoods in Dallas for Airbnb are well below the city’s average. The best neighborhoods are also similar or well above the average Dallas Airbnb returns, but more on that later.
Demand and Growth
Another two focal points of Airbnb success are demand and growth. Much like profitability and affordability, Dallas short-term rentals possess these factors as well. Airbnb has been growing steadily in Dallas over the last few years. There was a 37 percent growth between 2016 and 2017 with a monthly average of 1,443 bookings, for example. The trend had increased the following year as well. In 2018, 253,000 tourists visited Dallas and resided in a Dallas Airbnb investment property. These tourists accounted for 60 percent of Airbnb guests in Northern Texas. Continued growth is the expectation for 2019, ensuring real estate investors that their Dallas rental property will consistently draw demand and be occupied.
Optimal Rental Strategy
Finally, the third reason why real estate investors should consider an Airbnb Dallas rental property is that it is better than traditional investing, or at least one could make that argument. Let’s use Mashvisor’s data to point this out. According to Mashvisor’s Airbnb profit calculator, the average Dallas traditional returns are $1,814 in rental income and 0.5% in ROI, although the majority of investment properties will have higher values for both metrics, as these stats merely represent averages. The averages for an Airbnb investment property in the city, however, are higher, as we have previously mentioned. Based on average profitability alone, Airbnb is the optimal rental strategy in the Dallas real estate market. It is worth stressing, however, that determining optimal rental strategy is most effective on a property-by-property basis. In order to determine the best rental strategy of your Dallas real estate investment, use Mashvisor’s Airbnb profit calculator!
Is Airbnb Legal in Dallas?
Before investing in Airbnb in any area, it’s imperative to know Airbnb’s legal status in the area. So, is Airbnb legal in Dallas? Currently, there are no official Airbnb regulations in Dallas, making the platform neither illegal or legal. However, a real estate investor must still be aware of any developments that may occur and the official Airbnb regulations that apply before investing in a Dallas short-term rental property.
Best Neighborhoods for Dallas Short-Term Rentals
Where are the best neighborhoods to buy an Airbnb Dallas rental property? According to Mashvisor, the best neighborhoods in Dallas are Southeast Dallas, Southwest Dallas, North Dallas, Love Field Area, and Urbandale-Parkdale.
1. Southeast Dallas
- Median Property Price: $188,044
- Price-to-Rent Ratio: 15.0
- Rental Income: $2,489
- Cap Rate / Cash on Cash Return: 6.7%
- Occupancy Rate: 50%
2. Southwest Dallas
- Median Property Price: $243,681
- Price-to-Rent Ratio: 16.6
- Rental Income: $2,619
- Cap Rate / Cash on Cash Return: 5.5%
- Occupancy Rate: 56%
3. North Dallas
- Median Property Price: $766,014
- Price-to-Rent Ratio: 24.3
- Rental Income: $6,137
- Cap Rate / Cash on Cash Return: 4.2%
- Occupancy Rate: 53%
4. Love Field Area
- Median Property Price: $451,837
- Price-to-Rent Ratio: 22.9
- Rental Income: $2,792
- Cap Rate / Cash on Cash Return: 3.8%
- Occupancy Rate: 53%
- Median Property Price: $292,053
- Price-to-Rent Ratio: 17.6
- Rental Income: $2,376
- Cap Rate / Cash on Cash Return: 3.44%
- Occupancy Rate: 43%
All in all, Airbnb Dallas is an opportunity North Texan real estate investors don’t want to miss. The average Dallas short-term rental property is profitable, affordable, full of demand and growth, and arguably better than its traditional counterpart. To start searching for Dallas investment properties for sale, click here to start your 14-day free trial with Mashvisor!