Of all the significant Airbnb trends for 2020, tourism trends are among the most dominant in projecting the success of Airbnb short-term rentals. With this principle in mind, it’s no surprise that the Milwaukee housing market has been ranked as the top Airbnb travel destination worldwide. With the title of the best Airbnb travel destination, there are many questions to ask about Airbnb Milwaukee in 2020. Most importantly:
- Is Airbnb legal in Milwaukee?
- How profitable is Airbnb Milwaukee 2020?
- Why is Milwaukee the world’s top Airbnb travel destination?
- Where should property buyers consider investing in Milwaukee real estate?
In this blog, we’ll answer these four questions and explain why Airbnb Milwaukee is a hot location for the 2020 real estate market.
Is Airbnb Legal in Milwaukee?
First and foremost, what is the status of Milwaukee Airbnb laws? As per the legislation from the State of Wisconsin, Milwaukee cannot prohibit short-term rentals. While this is the case, there are no official Airbnb regulations in Milwaukee as of yet. Therefore, an Airbnb Milwaukee real estate investor can invest in and operate non-owner occupied rentals in the city.
Although Milwaukee does not have official Airbnb regulations set in place, hosts are required to pay certain taxes. These include both state and local taxes, such as:
- State Sales Tax: Wisconsin’s 5% Sales Tax is applied to short-term rentals for reservations of 29 nights or fewer.
- Milwaukee County Sales Tax: As is the case for many counties in the state, the Milwaukee County Sales Tax, for reservations of 29 nights or fewer, is 0.5% of the property’s listing price.
- Basic Room Tax: Milwaukee County also requires hosts to pay a 2.5% Basic Room Tax for short-term rental properties.
- Additional Room Tax: If the lodging occurs in the City of Milwaukee, an Additional Room Tax of 7% is also required from the Airbnb host.
- Baseball Stadium Tax: Milwaukee is among the cities in Wisconsin that require its Airbnb hosts to pay a 0.1% Baseball Stadium Tax.
Milwaukee Real Estate Market: Airbnb Milwaukee Data
So we know it’s legal, but how profitable is Airbnb Milwaukee in 2020? The best way to find out is to use an Airbnb profit calculator. Mashvisor’s Airbnb profit calculator, for instance, is backed by the most up-to-date traditional and predictive Airbnb analytics. By using Mashvisor’s Airbnb profit calculator, real estate investors can find the best Airbnb properties in the US housing market. To learn more about Mashvisor, be sure to click here! In the meantime, check out the data of Airbnb Milwaukee below:
- Median Property Price: $180,540
- Price per Square Foot: $113
- Price-to-Rent Ratio: 14
- Rental Income: $2,234
- Cap Rate / Cash on Cash Return: 8.8%
- Occupancy Rate: 58.8%
Note: Cap rate and cash on cash return are equal in the data above as a full-cash purchase is assumed. To get cash on cash return values for investment properties based on your financing method, use Mashvisor’s rental property calculator.
Why Milwaukee Is a Hot Location for 2020
What makes the Airbnb Milwaukee market a hot location for 2020? There are a variety of reasons, ranging from high profitability to exceptional tourism.
Rental income and return on investment (ROI) are the bread and butter of rental property profitability. Fortunately for real estate investors, Milwaukee vacation rentals promise good returns for both metrics. ROI, in particular, is very high, with a city average of 8.8%. Impressively, the 5 best neighborhoods for Airbnb Milwaukee range in ROI from 12.7% to 19.6% (listed below).
The real estate market’s affordable median property price strongly contributes to its lucrativeness. According to Mashvisor, Milwaukee’s median property price is $180,450. This is considerably lower than the state median of $279,000 and the national median of $299,000. Milwaukee also has a high Airbnb occupancy rate, another highlight of its Airbnb market.
High Short-Term Rental Appreciation
Short-term rentals can benefit from real estate appreciation if the housing market experiences a high rate. As you would expect, this is the case for the average Airbnb Milwaukee real estate investment in 2020. According to Zillow, properties in the Milwaukee real estate market will appreciate by 3.6%, which is considerably higher than the national rate of 2.8%.
Democratic National Convention 2020 in Milwaukee
According to Airbnb, Milwaukee has had a whopping 729% increase in bookings for 2020. It’s no secret that this boom in tourism is especially due to the Democratic National Convention set to take place on July 13 to 16. Estimated to draw in 50,000 visitors to 2,500 Airbnb listings, the DNC will be a major summer event for Airbnb Milwaukee hosts. It is projected that the average daily rate during the DNC will be $200, with some reservations already booked at $1,000 per night, according to the Milwaukee Journal Sentinel. Real estate investors in neighborhoods near Lake Michigan, in particular, should definitely prepare for the event, as most of the short-term rental activity will occur in that area.
Plenty of Sports, Museums, and Recreation
Aside from the DNC, an Airbnb Milwaukee investment property will also benefit from the city’s top-tier tourism, especially with its sports, museums, and recreation. With 7 professional teams and an estimated economic impact of $28 million according to Visit Milwaukee, Milwaukee’s sporting events will generate great buzz for Airbnb hosts and guests throughout 2020. The city’s vast museums, including the famous Milwaukee Art Museum and Discovery World, will also bring in many domestic and international tourists to Milwaukee, hence the high Airbnb occupancy rate. Its position along the shores of Lake Michigan places Milwaukee as a prime location for sailing, windsurfing, restaurants, and bars. Milwaukee’s recreation is also unique with over 105 miles of bike lanes, one of the highest in the country.
Best Neighborhoods for Airbnb Milwaukee in 2020
Finally, where should real estate investors look for Milwaukee houses for sale? According to Mashvisor, the best neighborhoods for Airbnb Milwaukee are Lenox Heights, Riverwest, Johnson’s Woods, Williamsburg, and Lincoln Village.
- Median Property Price: $188,933
- Price per Square Foot: $71
- Price-to-Rent Ratio: 14
- Rental Income: $3,045
- Cap Rate / Cash on Cash Return: 19.6%
- Occupancy Rate: 66.9%
- Median Property Price: $194,038
- Price per Square Foot: $66
- Price-to-Rent Ratio: 17
- Rental Income: $2,415
- Cap Rate / Cash on Cash Return: 16.9%
- Occupancy Rate: 53.8%
- Median Property Price: $133,874
- Price per Square Foot: $114
- Price-to-Rent Ratio: 10.9
- Rental Income: $3,799
- Cap Rate / Cash on Cash Return: 16.1%
- Occupancy Rate: 74%
- Median Property Price: $60,500
- Price per Square Foot: $56
- Price-to-Rent Ratio: 5.8
- Rental Income: $1,743
- Cap Rate / Cash on Cash Return: 13%
- Occupancy Rate: 54.1%
- Median Property Price: $102,633
- Price per Square Foot: $67
- Price-to-Rent Ratio: 9.8
- Rental Income: $2,474
- Cap Rate / Cash on Cash Return: 12.7%
- Occupancy Rate: 53.2%
All in all, the Airbnb Milwaukee market is the hottest destination for Airbnb investing in 2020. As a phenomenal travel destination, home of the upcoming Democratic National Convention, and a market with high Airbnb statistics, Milwaukee will be the best location for buying an Airbnb rental property in the next year. To start searching for Milwaukee houses for sale, CLICK HERE to start your 14-day FREE trial with Mashvisor!
Meanwhile, make sure to learn all there is about becoming an Airbnb host in 2020 in Milwaukee and any other market.