Many real estate investors are contemplating buying an Airbnb for sale because a surge of demand from short term guests is expected in 2023.
After the establishment of Airbnb.com, the vacation rental industry took on an explosive growth path, allowing investors to earn significant profits. Then, the Airbnb business was adversely affected by the COVID-19 pandemic that started in early 2020. Now, short term rentals are quickly returning to normal, following the lifting of travel and tourist restrictions.
Table of Content
- Why You Should Invest in Airbnb for Sale
- Investing in Airbnb Properties vs Long Term Rentals
- How to Find Airbnb for Sale
- Top 10 Locations to Find Airbnb Properties for Sale
- Getting Started With Airbnb Houses for Sale
Nevertheless, some investors are reluctant to acquire vacation rentals for sale, given that this real estate investment is highly seasonal. But the truth is, investing in an Airbnb house is not as scary as some people might think. Just like many other types of investments, it can be quite profitable—even more profitable than investing in long term rentals, when done correctly.
Choosing a location that tourists frequent is crucial when it comes to Airbnb investing. For example, buying an Airbnb for sale in Florida can be a good idea because the Sunshine State is a popular tourist destination. At the same time, buying houses with high potential to operate as short term rentals is equally important.
In this article, we’ll show you why buying Airbnb houses for sale is a good idea in 2023. We’ll also provide a list of where to find the most profitable opportunities and how Mashvisor can help you along. Last but not least, we’ll rank the top 10 US markets for this strategy based on Mashvisor’s nationwide analysis.
Why You Should Invest in Airbnb for Sale
There are many reasons why both new and seasoned investors are buying Airbnb properties for sale and why you should consider this rental strategy as well. However, there are also some risks that you need to take into account before diving into the short term rental industry. Here, we’ll take a look at both to help you decide if it is the right approach for you.
Benefits of Investing in Airbnb Houses for Sale
The main advantages of buying a short term rental property include:
- A growing number of users: Currently, there are over 45.6 million Airbnb users in the US, and this number is expected to grow in 2023, and beyond. Thus, buying a house for sale and converting it into a vacation rental property will expose it to millions of users on the Airbnb platform. Advertising on Airbnb can help you find renters effortlessly.
- More demand than hotels: Most individuals nowadays prefer Airbnb and other similar online home sharing platforms. They find such properties cheaper, cozier, and friendlier than staying at a hotel. It makes investing in a house for sale near me or out of state and turning it into a vacation rental a wise move for investors.
- Increasing market size: Revenue in the US vacation rental industry is forecast to reach $19.39 billion in 2023 and continue growing at an annual rate of 1.49% until 2027. It means that starting an Airbnb business can bring you significant rental income and above-average return on investment.
- Passive income: Investing in real estate properties for sale as short term rentals for Airbnb listings is a great opportunity to earn passive income. While the platform allows you to easily market and manage your properties online, you can hire a professional property manager for a completely passive experience.
Related: The Complete Guide to Finding the Perfect Airbnb Investment Property in 2023
Risks of Investing in Airbnb for Sale
Of course, just like any other real estate investment strategy, vacation rentals come with some disadvantages and challenges. To give you the full picture and allow you to make an informed decision, next, we’ll go through the main risks associated with this rental strategy:
- Restrictive short term rental regulations: Unlike their long term counterparts, short term rentals face highly restrictive laws in many top US markets. Some even prohibit non-owner-occupied short term rentals altogether. So, before looking for Airbnb houses for sale, you must confirm that the local market allows this investment strategy.
- Local market seasonality: Like beach and ski resorts, Airbnb properties are subject to seasonality in many markets. Thus, when choosing a location, you should conduct Airbnb market research to find a place that enjoys high Airbnb occupancy rate year-round. It will help push up your Airbnb income and Airbnb ROI.
- High rental business operating costs: Owning an Airbnb rental business entails higher recurring expenses than running a long term rental business. It is because you need to cover utilities, restocking and cleaning between guests, and additional hotel occupancy taxes. Consider them in your investment property analysis before buying.
Investing in Airbnb Properties vs Long Term Rentals
Investing in both short term and long term rentals can be a great way to earn substantial returns. In general, long term rental real estate investing is when one purchases a property for sale to lease it out to tenants for the long term. It usually means a monthly rental agreement, but it can extend even to an annual contract.
On the other hand, Airbnb investment properties are houses that an investor buys for the sole purpose of renting them out for short term stays, usually for 30 days or less. Before finding potentially profitable Airbnb properties for sale, it’s important to know the major differences between the two real estate investing strategies.
Here, we’ll look at the four main factors to consider when looking for Airbnb for sale if you’re used to investing in long term rental properties:
Rental Legal Regulations
As briefly mentioned above, in the long term rental business, the laws and regulations are less restrictive and easier to follow. While many major US markets are landlord friendly states, even those less friendly rarely have any major restrictions that landlords find hard to comply with.
On the contrary, when you’re looking into Airbnb properties for sale, realize that you need to know and understand the short term rental laws in your specific location. For example, some cities prohibit individuals from leasing out their property for less than 30 days. Other locations require that the owners should reside on-site during the guests’ stay.
The governing laws vary from city to city, so it’s crucial to learn the rules before buying an Airbnb property for sale in a particular area. But don’t let the legal restrictions for renting out an Airbnb property scare you away.
Airbnb is frequently much more profitable than long term rental investing, depending on your chosen area. In addition, investing in Airbnb for sale also means that you get to meet lots of different people if you opt out to be a DIY Airbnb host! You’ll get exciting stories from renters of different backgrounds from all over the country and the world.
To get started, you can check out Mashvisor’s short term rental regulations page to find a US market that allows non-owned occupied short term rentals without restrictions.
Another major difference between investing in Airbnb houses for sale and long term rentals is the significance of seasonality, which reflects on the occupancy rate and, thus, ROI.
When you’re looking for Airbnb properties for sale, make sure to choose an area that receives lots of visitors to keep the flow going. While demand for vacation rentals is seasonal, there are many US cities and towns that attract year-round interest from tourists and business travelers.
If you invest in a location that’s visited by tourists all year-round, you don’t need to worry too much about vacancies and will be able to support a good Airbnb occupancy rate. The occupancy rate, in turn, is one of the most important factors of profitability as it directly affects short term rental income.
For example, choosing a location with warm weather most days of the year is a good idea. It is the reason why there is a high demand for Airbnb properties for sale in Florida. In specific, Airbnb Orlando FL has been booming since the exponential growth of the vacation rental industry across the US. And Orlando is not the only Florida city that has reaped wild success.
At the end of the day, just like long term rental properties, Airbnb homes are still all about the location but even more. So, when looking for properties for sale, real estate market analysis should be your first step in the process.
Related: 100 Best Short Term Rental Markets in 2023
Marketing and Guest Reviews
While investing in Airbnb properties for sale can let you earn a good income on the side, buying a high-potential home in a strong-demand location does not guarantee success. You still need to work hard to ensure that you get good reviews from your Airbnb guests.
As Airbnb homes are rented out on a daily basis, you must constantly continue marketing your rental property to ensure a high occupancy rate. And one of the most important factors in your marketing strategy is guest reviews and the overall listing rating on the Airbnb platform.
You are most likely to earn good ratings when you’re hospitable, when you offer an experience in addition to a property to stay in, and when you go the extra mile to ensure guest satisfaction. They, in turn, will boost the ranking of your Airbnb listing, get more eyes on your short term rental home, and push occupancy up.
Once your Airbnb property receives a top rating and you earn an Airbnb Superhost status, you can afford to charge a higher rate per night. Needless to say, it will result in higher returns.
So, before buying a vacation rental, make sure that you understand the need to put the extra work into marketing your property compared to a long term rental. Alternatively, you can resort to hiring an Airbnb property manager if you prefer a passive real estate investment strategy.
The last big difference between Airbnb homes and long term rentals is the rental process. Running an Airbnb business requires not only more active work but also more financial resources.
First of all, you need to completely furnish the house as soon as you purchase it and provide it with everything required for a comfortable stay. Moreover, it’s advisable to go the extra mile and supply amenities that Airbnb rental comps in the area don’t offer in order to enhance occupancy and return on investment.
Second, once your property is ready to be rented out and you start welcoming guests, you will need to cover the utility bills, which is not usually the case with long term tenants. Furthermore, you have to restock the home with supplies for your guests and clean it professionally between stays.
Not to mention that Airbnb houses undergo more tear and wear as short term guests take less care of them. What this means is that you have to be ready to cover higher recurring costs when investing in Airbnb. All these numbers need to go into your rental property analysis before buying a home to make sure that you will yield positive cash flow and high ROI.
How to Find Airbnb for Sale
Now that we’ve established that the answer to the question “Is owning an Airbnb worth it?” is “Yes!”, the next step that you need to take is to determine how to find Airbnb houses for sale.
First, you need to know that there is no specific MLS database or a listing website that only lists turnkey Airbnb for sale. To find a home for short term rentals, you need to search for a residential property for sale the way you would with a long term rental property.
Here are the best ways that can help you find an Airbnb property for sale:
1. Drive Around the Neighborhood
If you’re up for an adventure and have a lot of free time on your hands, you can look for an Airbnb for sale by driving around the area or neighborhood of your choice. You then go house to house to ask homeowners if they’re selling their properties or if they know of ones for sale.
In the real estate investing world, such a strategy is known as driving for dollars. However, as you can imagine, it can be a tedious task. There is no way to be sure that you will find any luck immediately or ever.
Related: A Guide to the Driving for Dollars Real Estate Strategy
2. Real Estate Agents
Once you’ve determined your preferred location for your Airbnb investment property, you can work with a local real estate agent to get a list of the properties for sale in the area. A real estate agent can assist you in finding a good match based on your budget and property type preference. Moreover, they will help you get the most preferential terms possible.
Some real estate professionals are able to access listings that are not yet posted for sale, known as off market homes. However, you need to establish rapport with the agent first because they will not easily release the listings to just any client.
To find the top real estate agents in any US market, check out the Mashvisor directory and search for your location.
3. Online Sources
One of the easiest ways how to find Airbnb properties for sale is to go to various online sources, also called investment property websites. You can look at numerous residential real estate listing websites that can help you access the most recent for sale inventory within your chosen location. It can include both turnkey properties and distressed houses.
However, the issue with the majority of the said online property marketplaces is that they don’t specialize in providing short term rental properties but cater more generally to homebuyers. A major exception is the Mashvisor real estate investing app, which allows beginner and experienced investors to search for both long term and short term rentals for sale.
In specific, the Mashvisor Airbnb analytics platform helps investors:
- Find the best markets for investing in vacation rentals across the US
- Locate the top neighborhoods for Airbnb homes in any US city
- Search for top-performing Airbnb homes for sale based on location, budget, and expected income and ROI (most of which are turnkey)
- Perform detailed investment property analysis to ensure strong occupancy, high Airbnb daily rate, above-average rental income, and good cash on cash return
Most importantly, the process requires no special real estate experience or technology skills. With a few clicks of a button, you can turn three months of real estate research and analysis into 15 minutes, finding the best Airbnb properties for sale across the US housing market.
To test the power of Mashvisor in finding the best Airbnb properties for sale in the US market, sign up for a 7-day free trial.
Top 10 Locations to Find Airbnb Properties for Sale
Conducting a nationwide real estate market analysis to locate the best places to find Airbnb properties for sale is not easy. It requires access to solid national dataand a lot of calculations. So, to help you get started, we ranked the 10 best markets for vacation rentals in the US in 2023.
Our ranking is based on Mashvisor data gathered from Airbnb, the MLS, public records, and other sources of reliable real estate and short term rental data. Next, we applied our AI machine learning algorithms to analyze the locations with the highest potential for Airbnb houses this year.
The data used covers the end of December 2022. We focused on affordable markets (with a median property price below $1 million) with strong demand (more than 100 active Airbnb listings and Airbnb occupancy above 50%). We ranked the top locations according to cash on cash return as the most comprehensive metric of ROI in real estate investing.
Cash on cash return, unlike cap rate, takes into account the financing method, factoring in the total amount of cash spent on the property. It makes calculating the return on investment more accurate, as investors are rarely able to make a full cash payment on an Airbnb home.
Related: 7 Best Loans for Investment Property in 2023
However, you should know that the ranked markets might be subject to short term rental regulations. Before deciding on any particular location, you must check the local legislation and make sure that non-owned occupied Airbnb rentals are allowed and relatively unlimited.
That said, here are the 10 top locations to buy Airbnb properties in 2023 for the highest profit, ranked from those with the highest cash on cash return to the lowest:
1. Schiller Park, IL
- Median Property Price: $284,199
- Average Price per Square Foot: $221
- Days on Market: 29
- Number of Short Term Rental Listings: 132
- Monthly Short Term Rental Income: $3,643
- Short Term Rental Cash on Cash Return: 7.64%
- Short Term Rental Cap Rate: 7.79%
- Short Term Rental Daily Rate: $165
- Short Term Rental Occupancy Rate: 57%
- Walk Score: 71
Search for profitable Airbnb properties for sale in Schiller Park, IL.
2. Columbia Heights, MN
- Median Property Price: $255,662
- Average Price per Square Foot: $139
- Days on Market: 49
- Number of Short Term Rental Listings: 327
- Monthly Short Term Rental Income: $3,175
- Short Term Rental Cash on Cash Return: 7.52%
- Short Term Rental Cap Rate: 7.68%
- Short Term Rental Daily Rate: $158
- Short Term Rental Occupancy Rate: 57%
- Walk Score: 82
3. Harvey, LA
- Median Property Price: $252,088
- Average Price per Square Foot: $160
- Days on Market: 80
- Number of Short Term Rental Listings: 799
- Monthly Short Term Rental Income: $2,868
- Short Term Rental Cash on Cash Return: 7.37%
- Short Term Rental Cap Rate: 7.53%
- Short Term Rental Daily Rate: $181
- Short Term Rental Occupancy Rate: 57%
- Walk Score: 61
4. Northlake, IL
- Median Property Price: $321,543
- Average Price per Square Foot: $204
- Days on Market: 59
- Number of Short Term Rental Listings: 118
- Monthly Short Term Rental Income: $4,013
- Short Term Rental Cash on Cash Return: 7.29%
- Short Term Rental Cap Rate: 7.42%
- Short Term Rental Daily Rate: $168
- Short Term Rental Occupancy Rate: 54%
- Walk Score: 33
5. Laurel, MS
- Median Property Price: $417,487
- Average Price per Square Foot: $196
- Days on Market: 140
- Number of Short Term Rental Listings: 105
- Monthly Short Term Rental Income: $3,223
- Short Term Rental Cash on Cash Return: 7.21%
- Short Term Rental Cap Rate: 7.36%
- Short Term Rental Daily Rate: $161
- Short Term Rental Occupancy Rate: 53%
- Walk Score: 74
6. Bar Harbor, ME
- Median Property Price: $493,800
- Average Price per Square Foot: $396
- Days on Market: 41
- Number of Short Term Rental Listings: 306
- Monthly Short Term Rental Income: $5,115
- Short Term Rental Cash on Cash Return: 7.20%
- Short Term Rental Cap Rate: 7.28%
- Short Term Rental Daily Rate: $309
- Short Term Rental Occupancy Rate: 64%
- Walk Score: 75
Related: The Investor’s Guide to Buying Homes for Sale in Maine
7. Penn Yan, NY
- Median Property Price: $260,920
- Average Price per Square Foot: $190
- Days on Market: 270
- Number of Short Term Rental Listings: 145
- Monthly Short Term Rental Income: $3,544
- Short Term Rental Cash on Cash Return: 7.08%
- Short Term Rental Cap Rate: 7.22%
- Short Term Rental Daily Rate: $321
- Short Term Rental Occupancy Rate: 52%
- Walk Score: 77
8. Bellwood, IL
- Median Property Price: $236,886
- Average Price per Square Foot: $206
- Days on Market: 78
- Number of Short Term Rental Listings: 176
- Monthly Short Term Rental Income: $3,264
- Short Term Rental Cash on Cash Return: 7.04%
- Short Term Rental Cap Rate: 7.20%
- Short Term Rental Daily Rate: $163
- Short Term Rental Occupancy Rate: 61%
- Walk Score: 82
9. Terrytown, LA
- Median Property Price: $289,783
- Average Price per Square Foot: $134
- Days on Market: 47
- Number of Short Term Rental Listings: 780
- Monthly Short Term Rental Income: $2,792
- Short Term Rental Cash on Cash Return: 6.92%
- Short Term Rental Cap Rate: 7.08%
- Short Term Rental Daily Rate: $177
- Short Term Rental Occupancy Rate: 57%
- Walk Score: 66
10. West Saint Paul, MN
- Median Property Price: $299,821
- Average Price per Square Foot: $160
- Days on Market: 41
- Number of Short Term Rental Listings: 361
- Monthly Short Term Rental Income: $3,357
- Short Term Rental Cash on Cash Return: 6.88%
- Short Term Rental Cap Rate: 7.01%
- Short Term Rental Daily Rate: $152
- Short Term Rental Occupancy Rate: 60%
- Walk Score: 75
Getting Started With Airbnb Houses for Sale
Investing in Airbnb houses for sale promises to be the best way to make money from real estate in 2023. When choosing where to buy a short term rental, the key factors are favorable Airbnb laws, year-round demand from travelers, and your preferred management strategy.
To find a profitable Airbnb for sale, it’s crucial to conduct both rental market analysis and investment property analysis. You should look for a market that allows non-owner-occupied vacation rentals and attracts guests all year round. In terms of property, pick one where rental income exceeds rental expenses to generate positive cash flow and good return on investment.
Keep in mind that Mashvisor can help you along all the steps when searching for the best short term rental property investments. All the data available on our Airbnb data analytics platform comes from reliable sources. Moreover, the individual investment property analysis is based on the performance of rental comps, making it highly accurate.
Mashvisor is also very easy to use. All you need to do is to type the city or neighborhood where you plan to invest, your budget, and your expected ROI. Then, you will get a list of all available listings that match your criteria that you can organize and narrow down to the top-performing Airbnb properties for your specific needs.
To learn more about how Mashvisor can help you find the best Airbnb properties for sale across the US market, schedule a free demo with our team of real estate experts.