Many individuals traveling on a budget or looking for something more intimate and homey are forgoing traditional hotel chains and opting to look for AirBnB. As the demand for short term rentals has exploded, as has an unprecedented investment property opportunity.
Here we review housing markets where AirBnB rental profit potential is skyrocketing. These cities also have excellent access to top-level golf courses which boosts the appeal of any vacation rental.
Lahaina, Hawaii (Maui) – Hawaiian Views in a Golfer’s Paradise
The picturesque smaller island of Maui is home to Lahaina, an explosive AirBnB investment property area. The average home price is around $600K, higher compared to other markets, but with a very high revenue potential of $76.4k annually.
Based on the mortgage criteria established above, real estate investors can anticipate one-year returns of $48k. This yields a repayment period of approximately 12.5 years if you were to put all profits into the mortgage.
In addition to Maui’s stunning and unique adventure landscape, there are two championship golf courses under 20 minutes from the area. Taking a weekend in the AirBnB promises an astounding mixture of outdoor excursions, unique island cuisine, and breathtaking golf outings.
Palm Springs, California – Coachella Isn’t the Only Thing Heating Up
An average property value of $333K makes this area more affordable than many other high profile cities. An annual revenue potential of $73.7k and a one-year mortgage cost of $15.1k shows a stunning earning potential of $58.6k. This yields a repayment period of 5.7 years.
The large influx of event-goers is only half of the potential market. Favorable year-round temperatures and a plethora of golf courses make Palm Springs a weekend retreat and destination for golfers. In Palm Springs and within a five-mile radius, there are six golf courses available.
Two airports, Palm Springs International and Bermuda Dunes Airport make Palm Springs accessible to all visitors. Many events brining high paying visitors and tourists mean a constant flow of guest potential for this hot market.
Bend, Oregon – Oregon’s Hidden AirBnB Gem
Southeast of Portland Oregon adjacent to the Deschutes National Forest lies Bend Oregon. A hidden AirBnB gem of Oregon, this small city off the beaten path boasts impressive returns for investors.
The average home prices reside near the $270k mark, opening the door for real estate investors without thousands in cash reserves. A projected annual revenue mark of $51.1k and annual mortgage costs approximately $12.3k, investors could see annual returns of $38.8k annually.
This translates to a 7 year payoff period. You might be asking, what is so attractive about this small town south of Portland? Bend’s proximity to the Deschutes National forest attracts nature lovers and extreme sports enthusiasts year-round.
An almost 4,000-acre ski lift and slope resort is just down the road and an above-normal snowfall average and lower temperatures, yield a longer winter sports season.
In the summer, the area has a dozen golf courses in and around the surrounding city limits and cooler temperatures enticing golfers to escape the summer blaze and hit the ball with their forged irons. Hiking trails and abundant wildlife bring visitors and locals out to this area annually. The only thing small about Bend Oregon is the population.
Nashville, Tennessee – Music City to Your Investment Portfolio
It may be no surprise that Music City is one of the more prominent areas in the United States where AirBnB is taking off. Two professional sports teams attract individuals from all over the country with visiting team fans coming into town.
The average home price is similar to other cities on this list clocking in at $270k. With estimated earning potential around $49.2k, and average annual mortgage costs at $12.3k, Nashville AirBnB brings the music to the tune of $36.9k annually and a repayment period of 7.3 years.
Year-round sports including hockey and football attract many individuals from different backgrounds, more importantly, different parts of the year. Additionally, Nashville’s iconic Hot Chicken recipes are spreading throughout the US at breakneck speeds.
Nashville is home to several golf courses offering scenic river challenges and close proximity to the downtown area. Sports, music, food, and golf bring thousands of visitors each year and many are eager to get an AirBnB rental.
Corpus Christi, Texas – Affordable Investment and Seasonal Beach Goers
The shores of Texas boast arguably the best year-round weather for beachgoers and golfers who just love walking their dogs on the course. Texas is home to 484 dog-friendly properties that make pet-lovers visit this city often and book their short-term rentals. Most golfers love dogs and Texas is a great place to invest as these people usually go for a morning walk with their lovely companion.
A low average house price at $149k and few rental regulations through the city and county, Corpus Christi is prime for investors.
Real estate investors can expect returns averaging $21.5k and mortgage costs of $6.8k, investor annual turns are $14.7k with a repayment period of 10 years.
Although it offers a lower annual return than other rental properties, this city is included in the hot markets due to minimal rental requirements and the low entry barrier to market entry. Summer months command premiums on AirBnB and other accommodations as beachgoers flock to Corpus Christi.
Additionally, this housing market is rather enticing to investors because of the variety of bedrooms available at different properties. There is a strong correlation between the number of bedrooms and income increase with the added benefit of housing costs not increasing nearly as much.
Investors looking to make a play in the burgeoning AirBnB rental market would be advised to consider properties in these areas. With management companies and AirBnB corporate controls, purchasing cross country properties has never been easier and more secure.
The cities listed are great for investors looking for large margin gains in areas ripe with diverse activities and attractions to bring guests and visitors each year. Golf courses are magnets for large parties planning a weekend getaways.
For each city, the mortgage cost is based on 20% of the average home price and an interest rate of 3.92% at 30 years. Other costs like cleaning fees are not included because they will vary by the number of visits and investors’ personal policy on cleaning. The repayment period is the cost of the average home divided by the net annual income; the repayment period will change depending on how much money is put back into the mortgage.
Additionally, AirBnB typically charges listing/hosting fees between 3-5% which are viewed by the guest. The financial revenue numbers for calculations are revenue after service fees from AirBnB.
This article has been contributed by Jordan Fuller.