Are you looking to invest in an Airbnb Wrightwood rental in 2022 but unsure if it is a good move?
Read all the way through and discover the viability of this area for Airbnb.
Is Wrightwood CA an Excellent Place to Invest in?
Tourists, business travelers, transient workers, families, or groups of friends out to have some fun and are looking for an alternative to hotels are the usual customers of an Airbnb business. But first, you need to convince them to come to and rent out your property.
Three things bring people to a place: lifestyle and attractions, economy, and safety. Let’s find out if Wrightwood ticks all the boxes.
Related: Where Are the Best Places to Invest in California in 2022?
Lifestyle and Attractions
Wrightwood is a census-designated place known as a town with no traffic lights. Located in San Bernardino County, it has evolved from a cattle ranch to a serene mountain resort city in southern California. The city is sparsely populated, with a population between 4,000 and 4,500. The place has a rural, neighborly character.
The city is a favorite destination for adventurous tourists all year round, blending in the modern community life and the various exciting activities it offers. They can go up the ski mountain for skiing and sledding and other snow sports during winter. The crisp mountain air adds delight during the rest of the year as they go dirt biking, camping, fishing, and hiking. Visitors can try the zipline adventures and enjoy the spectacular views of the city’s forest and mountains.
Wrightwood California has something for everybody, so those who simply want to chill out may go bird watching or enjoy free live musical performances, health and cooking lectures and demos, and massage. Shopaholics can have fun because the small city has places to buy accessories, crafts, and souvenirs.
For those looking to tour Wrightwood for warm-weather fun, the best time to do it is from late June to early September. Wrightwood’s snowy period begins around mid-November for visitors who intend to frolic in the snow, but February has the most snow.
Salary.com reports that Wrightwood, CA’s cost of living rose in 2022, making it higher than the national average by 15.5%. The most significant increases were observed in the Food, Housing, and Transportation categories.
Wrightwood is home to artists and individuals who hold jobs in education, food service, media, and sales, with a significant number working from home. The city’s unemployment rate is 7.8%, higher than the US average of 6.0%.
Wrightwood’s crime rate is almost 23 crimes for every 1,000 residents in a typical year, with the eastern part of the city deemed as the safest. The crime rate indicates that Wrightwood is safer than California and the national average, with 60% of US cities riskier than Wrightwood.
The main draw of this place is its tourist attractions that feed on the visitors’ sense of adventure. Although it is not the most expensive place to visit in California, it is not economical either. Even the sense of safety it offers is nothing to brag about, but neither is it a cause for alarm.
But what about Wrightwood’s real estate market?
Wrightwood, CA Housing Market
In January 2022, Wrightwood was a seller’s market, which means there were more buyers than housing inventory. According to Mashvisor’s latest data, houses in Wrightwood sold after 57 days on average, compared to 39 days year-on-year (YOY). During the same month, the city registered a sale-to-list price ratio of 99.31%, which means that, on average, the selling price of properties was almost equal to their asking price.
According to BestPlaces, Wrightwood’s housing costs are among the highest nationwide but relatively lower than those in the wealthy communities in California. As of August 2021, home values in Wrightwood were up 20.4% from the previous year, higher than the national appreciation rate of 15%. The city’s rate of home appreciation in the last 10 years is 109.8%, compared to the national rate of 77.0%.
In 2021, a little over 22% of the Wrightwood population lived in rented homes.
As of January 17, 2022, Airbnb Wrightwood CA logged the following performance:
- Median Property Price: $442,258
- Price per Square Feet: $334
- Airbnb Listings: 92
- Airbnb Rental Income: $4,081
- Airbnb Cash on Cash Return: 6.05%
- Airbnb Daily Rate: $272
- Airbnb Occupancy Rate: 61%
- Days on Market: 57
Airbnb Wrightwood seems a profitable investment prospect based on the above metrics. Let us show you how to do a better investment property analysis.
Finding the Best Airbnb Wrightwood Property
Suppose you are an investor looking to buy a property in this part of California. In that case, you’ll find a mix of contemporary structures and old-fashioned Wrightwood cabins, some of which are uniquely designed. These quaint dwellings will easily attract Airbnb users, but as an investor, you need to choose which of them can help you reach your financial goals. Mashvisor has several real estate investment tools to help you with that.
Looking for the Right Location
In real estate, one can never overemphasize the importance of the investment property’s location — yes, even in a small place such as Wrightwood. However, even a 15.36 square-kilometer area can be tedious to scour to find an ideal location for an Airbnb rental property. Mashvisor’s Heat Map will allow you to do that in just a few minutes or even seconds.
Related: Airbnb Rentals—Finding Income Properties Using a Heatmap
If you enter “Wrightwood, CA” on the search bar on Mashvisor’s home page, you will be redirected to Wrightwood’s location map. You can go a step further by clicking on the drop-down arrow next to “Heat Map Dataset” to see the available filter options. For example, if your goal is to determine the location of properties with a low listing price, you select “Listing Price.” Still, you need to select “Airbnb Rental Income” if you want to see the location of the properties, which will give you a better Airbnb income. Once you’ve set up a filter, a heat map for Wrightwood will be displayed.
A heat map is a color-coded map that uses the green color to indicate locations with the highest values based on your selected criterion and red with the lowest values. Look at the green-shaded areas, except when your filter is “Listing Price,” to identify the best location for Airbnb Wrightwood. Below is a heatmap example using Listing Price as the filter. The tiny blue circles indicate the location of properties with low listing prices.
The Right Airbnb Wrightwood Property
You may find several properties in the location of your choice, but remember that such properties do not bring in the same return on investments. Be sure to choose a property with an estimated return that will match your financial goal.
Identifying that property would mean doing a thorough investment property analysis.
Don’t worry, though, if you hate numbers and mathematical formulas because Mashvisor is here for you. Its reliable data sources and tested analytical tools can help you determine the viability of a property as an Airbnb rental.
You are given two options to begin your property search.
Option 1: Select from the list that goes with the heatmap.
Using the heatmap as your kick-off point, check the list of homes on the right side of your screen. They are the properties that satisfy your criterion. Just scroll through the list and click on the property’s image that appeals to you most.
Option 2: Property Finder
Mashvisor’s Property Finder tool helps newbie and savvy investors alike to look for properties for sale that match their criteria and investment goals, using predictive analytics and machine learning algorithms. The tool, designed for first-time investors, comes with a user-friendly interface. However, seasoned investors would also find the Property Finder useful for their needs.
You can customize your search based on your preferences and financial goals by setting mandatory and optional filters.
- Location or city: You can select up to five cities
- Miles or distance: However, it does not work for multiple cities
- Budget: How much are you willing to spend on the property
- Rental Strategy: Your options are Airbnb and Traditional
- Number of Bedrooms: Maximum of five bedrooms
- Number of Bathrooms: Maximum of five bathrooms
Let’s say you’ve chosen a property. Next comes the exciting part – the investment analytics – and we got a tool for that as well.
Related: How to Evaluate an Airbnb Investment
The Airbnb Calculator is a tool that estimates a property’s potential return on investment if it is used as an Airbnb rental. It provides a comprehensive Airbnb dataset based on relevant data collected from various reliable sources. The tool produces an investment property analysis based on the following criteria:
- Location of the property
- Property floor area
- Selling price
- Comparable Airbnb properties within the neighborhood
Mashvisor’s Airbnb calculator allows you to analyze the following metrics:
The rental income refers to the expected amount you will earn monthly from your short-term rental investment property. The amount is based on the average daily and occupancy rate of comparable properties within the neighborhood. First-time investors may refer to this figure to determine how much to charge for rent. You can edit this number to discover how an increase or decrease in rental income will influence your return on investment.
Investing in real estate requires you to expend money. Whatever amount you spend will affect your cash flow and return on investment, so you must understand what you need to spend for. The expenses may include the following:
- Property inspection fee
- Closing costs
- Total repair and renovation costs
- Furniture, fixtures, and appliances
- Airbnb fees
- Property tax
- Rental income taxes
- Property management fee
- Maintenance costs
- Housekeeping fees
- HOA dues
If you intend to purchase your Airbnb property through financing, the Airbnb calculator will also consider the monthly mortgage and see how it affects your cash flow and income. You can do it in seven easy steps, as listed below.
- Select “Mortgage.”
- Select the Listing Price provided or input the price you intend to pay for the property.
- Set the downpayment amount either in percentage or dollar figures.
- Choose from the following mortgage type options: fixed-rate, interest-only, or adjustable rate.
- Set the loan term to either 15 or 30 years.
- Input the interest rate.
- Scroll down to the Investment Payback Balance section to see how your cash flow reacts to an increase or decrease in a mortgage.
Cap rate refers to the net operating income (NOI) before taxes divided by the property price or current value. It is helpful for making a quick comparison with similar properties within the neighborhood, though it does not accurately reflect your Airbnb Wrightwood property’s income potential.
Cash flow is the monthly income minus expenses. You would want to look for a property that will give you a positive cash flow to ensure a steady income. However, you might need to make a cash purchase if you want your Airbnb Wrightwood property to generate a positive cash flow from the beginning. Otherwise, you may experience negative cash flow for the first couple of years as you pay your monthly mortgage while building your equity.
Cash on Cash Return
The cash on cash return metric is critical for investors but more so if you are financing your property. It is the ratio of your annual cash flow before taxes against the total amount of cash you invested in the same period.
Although Wrightwood is a great place to visit all year round, the flow of travelers and transient lodgers may be heavier during certain times of the year. It means your Airbnb Wrightwood property may be subject to seasonality, and thus, you won’t be able to experience a steady income stream.
What to do? Plan to increase your occupancy rate, ideally not lower than 51%, to compensate for the off-season decline. Our Airbnb calculator bases the Airbnb occupancy rate on the historical performance of comparable properties in the neighborhood.
10-Year Payback Balance
The 10-year payback balance tells you how much your accumulated earnings will be after a decade. Mashvisor presents the information in a table format, displaying your expected earnings at the end of each year for the next ten years. It shows you precisely at what year you will generate a positive cash flow if you purchase the property through financing. The table is most helpful for a go-no-go decision in purchasing the property.
Wrightwood, CA, is a small city with a small population but big in fun and adventure, making it one of the country’s well-loved destinations. The continuous influx of tourists to the city makes it tempting for a real estate investor to purchase a property for an Airbnb Wrightwood business.
However, the relatively high cost of living and housing costs may affect the Airbnb income of a short-term rental investor. If you’re a real estate investor, you can mitigate the impact of rising costs by doing a detailed investment property analysis to estimate the returns and determine if it is worth investing in.
Mashvisor provides you with all the necessary tools — the heatmap, Property Finder, Airbnb calculator, and more. All you need to do is sign up, avail of the free trial, and work your way to a profitable Wrightwood Airbnb.