Are you looking for statistics to find the best cities for Airbnb investment? We list the key statistics real estate investors will need to know before choosing a location to invest in.
Short-term vacation rental revenue in 2019 reached $57.669 billion, the US still being the top market. Added with Airbnb growth statistics, it is no wonder this rental strategy is so attractive to investors right now!
The task of choosing the best city for your Airbnb rental property investment, however, can seem daunting at first. We recommend utilizing Airbnb statistics by city as part of your market analysis on different Airbnb locations. The good thing is that the internet brings all this information to your fingertips. You just need to know what to look for. Below we will list the statistics you will need and where to find them. So, if you are one of those investors looking to make money with Airbnb, read on.
5 Airbnb Statistics by City That You Need
1. Rental income
Airbnb rental income statistics are needed for making an Airbnb income estimate and evaluating which location yields better profits. Indeed, the location of your Airbnb investment plays a key role in the amount of rental income you can expect. There are many things that affect Airbnb rental income and why it varies in different cities. For example, if you want to maximize your Airbnb rental income, choose a city with flexible short-term rental laws and regulations and which ensures you will have a high Airbnb occupancy rate. In addition to these, make sure your pricing strategy is adjusted to the seasonality of the vacation rental market.
Take the time to find the best city for your Airbnb that brings you the highest possible rental income. Check out Mashvisor’s blog for further insights into Airbnb statistics by city as well as cities with the best Airbnb rental income opportunities.
2. Cash on Cash Return
The second piece of statistics you will need are Airbnb cash on cash return rates in different cities. This rate is used in real estate transactions for calculating the cash income earned on the cash invested in a property. Cash on cash return measures the annual return made on a rental property in relation to the amount of mortgage paid during the same year.
To make comparisons of different cities easier, statistics on different cities’ Airbnb cash on cash returns are very useful. Airbnb statistics by city, including Airbnb cash on cash return and other Airbnb rental data, are all available in Mashvisor’s Investor Blogs.
3. Cap Rate
The third very basic real estate metric that you need is the cap rate, short for capitalization rate. What is the cap rate? It is very close to the cash on cash return and essentially refers to the return on investment of a potential property. As a real estate investor, you need to know which city gives the best cap rates.
You can easily calculate the cap rate yourself for a single investment property. First, find the net operating incomes and sales prices of properties similar to the property you are interested in investing in. Second, apply that to the investment property you are planning to buy. Voilà! You have the cap rate (NOI/Market Value). This is an easy way to understand different properties’ potential rates of return on investment and it will help you decide which property to purchase. A good cap rate is typically higher than 8 percent.
However, it is virtually impossible to carry out cap rate calculations city-wide in hopes of finding this Airbnb data for a location. You can again check Airbnb rental statistics on Mashvisor’s real estate investment blog to find cap rates by city!
4. Occupancy Rate
The fourth useful rate you need to find statistics for is the Airbnb occupancy rate. The occupancy rate of an Airbnb investment property will tell you the amount of time the property is occupied by tenants throughout the year. This is important because the more your short-term rental property is booked, the more your rental income is. Location plays a key role here; the occupancy rates are higher in cities with high demand for vacation rentals.
Are you interested in finding out what the average Airbnb occupancy rate for rental properties is in the cities you’re planning on buying an Airbnb rental property? You can get this real estate data (and more) from Mashvisor. Visit Mashvisor’s blog and you can get Airbnb occupancy rate by city, average rental income, cap rate, and the cash on cash return you can expect from investing in an Airbnb property there.
5. Tourism – Numbers and Demographics
What other statistics should you use for a more informed investment decision? The numbers and demographics of tourists will definitely provide further insight! Firstly, make sure the location of your property attracts as many visitors as possible. A strong tourism sector means strong demand for Airbnb properties in the real estate market and a higher occupancy rate for your potential property. With strong demand for your Airbnb, you also get to charge higher rates per night!
An excellent starting point for the inquiry is the World Tourism Organization’s comprehensive data and indicators on inbound, outbound, and domestic tourism, as well as data on tourism industries and employees, and macroeconomic indicators related to international tourism. Do not forget to check Airbnb vs hotel statistics, as this gives you a good overview of the short-term vacation rental market in each investment location.
Bear also in mind the demographics of inbound tourists. Did you know that Millennials account for roughly 60% of all guests who have ever booked on Airbnb? Investors nor Airbnb hosts should overlook this generation of travelers standing out from the Airbnb user statistics. Millennials rather spend their money on travel and experiences, are more likely to take last-minute weekend trips, and are willing to pay $ 5,000 or more on a vacation. If you were a millennial, that is, born between the early 1980s and the mid-1990s, where would you travel? You can find all this information and more online. We highly recommend you get to know this major potential customer segment.
We hope this article provided you a headstart for your statistics search. Mashvisor’s Airbnb statistics by city will make this so much easier for. You only need to know potential investment locations to look up! Do check also the Airbnb analytics tools Mashvisor provides; it is the best Airbnb analytics platform in 2019. Test it yourself and tell us what you think!
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