Despite recent efforts by city councils around the US to crack down on Airbnb and short-term rentals, the platform remains to be the most preferred way to book vacation rentals with over 6 million listings around the world! For this and other reasons, Airbnb has become a hot thing in real estate investing. However, not all Airbnb rentals are created equal. Some important factors – or metrics – to assess your investment’s success are the demand, pricing and, most importantly, Airbnb occupancy rate. While often overlooked by beginners, the occupancy rate is actually the key to making money in Airbnb real estate investing.
To put it simply, the occupancy rate represents the percentage of days your short-term rental is occupied by guests in a year. Of course, you don’t want your vacation rental to sit empty and miss out on potential Airbnb rental income. If you’re buying a vacation home to rent out on Airbnb this summer, you must be wondering: What kind of Airbnb occupancy rate can I expect? Let’s take a look at what Mashvisor’s data and Airbnb analytics tell us.
Airbnb Occupancy Rate by City 2019
In order to answer this question, we’ve collected data from Airbnb rental listings and analyzed them using our own algorithms. This shows Airbnb real estate investors what kind of occupancy rate they can expect in certain locations in the US housing market. After all, it’s unquestionable that the investment location heavily affects vacation rental occupancy rates as well as Airbnb rental income.
The trends we’ve found are clear. First off, traditional vacation destinations in sought-after locations have the highest occupancy rates. Therefore, it’s not surprising to see cities in California and Florida at the top. As a matter of fact, the highest occupancy rate can be found in Kissimmee, FL coming in at 76% according to Mashvisor’s Airbnb occupancy rate data.
When scanning our data for cities with the lowest Airbnb occupancy rate, there’s an interesting trend. We found that cities that highly depend on a season fare poorly after taking their numbers in total over the year. For example, Aspen, CO is primarily visited during winter months and has the ability to maintain an occupancy rate over 70% during the busy season. However, this Airbnb occupancy rate goes down in the summer months and ends up averaging to 44%.
We should point out the fact that occupancy rates for Airbnb rentals differ not only between cities but also between neighborhoods in the same city. For example, the occupancy rate for short-term rental properties in the city of Los Angeles is 58% which is not bad. However, when looking at neighborhood-level data, we found that Hollywood Heights has an occupancy rate of 72% while Athens has a rate of 38%.
Want to get a clearer picture of what Airbnb occupancy rate you can expect in the summer of 2019? Take a look at the occupancy rates for some of the most popular Airbnb destinations and major cities in the US.
- San Francisco, CA: 71%
- Miami Beach, FL: 67%
- Boston, MA: 61%
- Denver, CO: 61%
- San Diego, CA: 60%
- Seattle, WA: 58%
- Los Angeles, CA: 58%
- Portland, OR: 57%
- Austin, TX: 56%
- Nashville, TN: 55%
- Dallas, TX: 53%
- Baltimore, MD: 51%
- Phoenix, AZ: 51%
How to Get Airbnb Occupancy Rate Data Using Mashvisor
Whether you’re looking to buy an investment property to rent out on Airbnb or assess the location of your short-term rental, you can get the data you need using Mashvisor. Using historical and predictive analytics, Mashvisor offers reliable estimates of the Airbnb occupancy rate that you can expect for a particular home for sale as well as for entire neighborhoods in a city! You can get this data using two tools: the Heatmap and the Airbnb Profitability Calculator.
First, start your property search with Mashvisor and select a city where you’d like to invest in real estate. Then, using the Heatmap tool, you can set the Airbnb occupancy rate filter. Doing so will give you an overview of the average vacation rental occupancy rate for all major neighborhoods in your city of choice. What’s great about this tool is that it allows you to search even further and see what kind of Airbnb rental income and Airbnb cash on cash return you can expect as well. This way, Airbnb real estate investors ensure they’re buying a property and investing in the best neighborhoods for short-term rentals.
Mashvisor’s Heatmap Tool
Then, after you have decided on a good neighborhood, you can start looking at actual properties for sale in that neighborhood and analyzing them using the Airbnb Profitability Calculator. Just click on the listing and it’ll take you to the property page where you can access our calculator. This tool will provide you with even more data that is important for making wise investment decisions such as the comparable rental income, monthly expense estimates, cash flow, cap rate, cash on cash return, and Airbnb occupancy rate for the rental property. This will help you understand what profits you can expect from any specific investment property.
How to Increase Your Airbnb Occupancy Rate
As mentioned, the occupancy rate is an important factor that determines how successful your short-term rental property is. Therefore, one of your goals as an Airbnb host and real estate investor is to increase your occupancy rate. We focused on the Airbnb occupancy rate by city, but there are other factors that affect this rate. More importantly, there are things YOU can do to increase your bookings and make more money. Here are some of the best tips:
1. Know Your Investment Location
Before buying an Airbnb investment property, you need to be familiar with the housing market where you plan to invest. For example, research where Airbnb guests like to stay the most in this area (city center or suburbs). Also, find out when high-seasons and low-seasons are. In addition, you should know the popular local events in the city – festivals, celebrations, conferences, etc. All of these factors affect what kind of Airbnb occupancy rate you can expect in the investment location.
2. Lower Your Airbnb Nightly Rate
If you’re just starting an Airbnb business, don’t be tempted by quick profits and overprice your property. Guests are typically hesitant to book if the host is inexperienced. However, they may be encouraged to book your vacation rental at a cheaper price. So, do your homework and figure out the average nightly rate for similar properties in the area (Airbnb comps) and then set a price just below this level to attract guests. Remember that profit depends on both the nightly rate and Airbnb occupancy rate. It’s likely that the positive effect of increasing the occupancy rate will exceed the negative effect of lowering the price. Once you have a lot of people wanting to book your rental property, you can raise the price to make more money.
3. Change Your Price According to Season
If you’re investing in real estate in a seasonal location, you must have a dynamic pricing strategy where you change the nightly rate based on the season. When we say season, we mean weekdays vs. weekends and workdays vs. holidays, not just the four astronomical seasons. It’s important to ask for a different rate when the demand is low vs. when the demand is high to increase your Airbnb occupancy rate. Doing so will help you make great profits during the high-season and remain competitive in the low-season.
4. Focus on Getting Reviews
Finally, encourage your guests to leave reviews as they play a role in increasing your Airbnb occupancy rate. Before people book a vacation rental property, they look at what kind of reviews others who stayed there have left. It just feels reassuring to see that many people have booked the short-term rental and that they enjoyed their stay. This means it’s up to you as the host to leave a positive impression on your guests that encourages them to write positive Airbnb reviews.
To Sum Up
Airbnb and short-term rental properties have changed the real estate investing game. Many investors turn to this rental strategy as the best way to make money in real estate. Therefore, if you want to stay ahead of the competition in the summer of 2019, then you must focus on increasing your Airbnb occupancy rate! If you’re a beginner and you’re looking for your next investment property to rent out on Airbnb this summer, check out Mashvisor to start searching for and analyzing the best properties for sale in the US housing market and get their data and ROI pre-calculated.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.