There’s one thing we noticed here at Mashvisor since the start of the new year: Real estate investors are currently busy doing their research to figure out what the best cities for Airbnb investment in 2021 are.
Because if there’s one industry we can expect to boom after the COVID-19 vaccine rollout, it’s the travel industry. A recent survey conducted by Airbnb revealed that Americans missed traveling the most out of any activity they couldn’t partake in due to the pandemic. Wanting to travel safely is one of the main reasons most of those surveyed are considering taking the vaccine. And 54% have already booked trips or are at least making plans to travel this year.
While many experts are still speculating on what travel will look like in the post-COVID-19 world, it’s safe to say that Airbnb will continue to be the industry’s star. After all, many hosts continued to enjoy good Airbnb occupancy rates and high rental income as soon as local governments lifted stay at home orders and travel restrictions.
Want to take full advantage of the upcoming spike in demand for vacation rental property likely to come later in 2021? Then start your Airbnb market research today.
The 8 Best Cities for Airbnb Investment 2021
The following cities earned a spot on this list because, in terms of cash on cash return, they are the most profitable Airbnb locations in 2021. They also happen to be Airbnb-friendly, based on our research. Meaning, it seems that real estate investors can legally operate non-owner-occupied Airbnb investment properties in each city.
Besides the cash on cash return, we included a few other key Airbnb statistics by city like the average occupancy rate, average daily rate, and average monthly rental income. All of Mashvisor’s Airbnb analytics are derived from data collected from the homesharing website and our calculations are verified by active hosts.
#1. San Angelo, Texas
- Median Property Price: $360,750
- Price per Square Foot: $152
- Average Airbnb Daily Rate: $125
- Monthly Airbnb Rental Income: $3,000
- Airbnb Cash on Cash Return: 6.9%
- Airbnb Occupancy Rate: 72%
- Top Airbnb San Angelo Investment Property for Sale
Investing in Airbnb means investing in a real estate property that will be affected by market trends. So before we get into why San Angelo is one of the best cities for Airbnb investment in 2021, let’s take a closer look at how the market has held up during the coronavirus pandemic.
In the early months of the pandemic, San Angelo realtors reported that the real estate market was still thriving. Towards the end of 2020, the San Angelo housing market was seeing year over year (YoY) growth in home sales and prices. San Angelo properties appreciated by a total of 6.7% last year. Although there is an issue of low housing inventory, the San Angelo real estate market is generally healthy.
What makes it one of the best Airbnb cities for this year is the local tourism industry. Pre-COVID-19, tourism in San Angelo was a business that generated millions in revenue and taxes for the city. And based on Mashvisor’s Airbnb data for the San Angelo real estate market 2021, local hosts are still making good money. This is despite the fact that less than 6.5% of the population in the state of Texas has received at least the first shot of the COVID-19 vaccine. As more of the general population in the US and worldwide get vaccinated, we can expect the average Airbnb metrics measuring profit to go up for San Angelo vacation rentals.
In terms of the local Airbnb laws in San Angelo, there are different permits a real estate investor will have to apply for. Additionally, your short-term rental property will be subject to taxes among other regulations.
Not only is San Angelo one of the best cities for Airbnb investment, but it is one of the best places to invest in Texas for long-term rentals in 2021.
#2. Chesapeake, Virginia
- Median Property Price: $329,934
- Price per Square Foot: $168
- Average Airbnb Daily Rate: $145
- Monthly Airbnb Rental Income: $3,499
- Airbnb Cash on Cash Return: 6.8%
- Airbnb Occupancy Rate: 69%
- Top Airbnb Chesapeake Investment Property for Sale
The Chesapeake real estate market falls in the metropolitan area of Virginia Beach–Norfolk–Newport News, VA–NC, also known as “Hampton Roads”. As a whole, the metro ended 2020 as a strong seller’s market. Prices were up YoY, with active listings and days on market down, according to Realtor.com. Chesapeake home values went up by 7.9% in 2020. Generally, the local housing market continued to see high demand and a dwindling inventory during COVID-19.
Tourism in the Hamptons Roads is a billion-dollar industry with Chesapeake’s visitors helping to generate millions annually. The city saw a growth of 3.7% in tourist spending from 2018 to 2019. Tourists always have plenty to do in the city whether they wish to visit the different natural attractions or historical sites, like the Battlefield Park.
As for the Airbnb regulations in the Chesapeake housing market, the city has clear guidelines for short-term rental property taxes. It should also be noted that the state of Virginia allows local governments to set ordinances to regulate short-term rentals. So be sure to keep an eye out for any changes in Airbnb laws in Chesapeake.
#3. Independence, Missouri
- Median Property Price: $180,962
- Price per Square Foot: $108
- Average Airbnb Daily Rate: $111
- Monthly Airbnb Rental Income: $1,636
- Airbnb Cash on Cash Return: 6.0%
- Airbnb Occupancy Rate: 57%
- Top Airbnb Independence Investment Property for Sale
The Independence real estate market is part of the Kansas City metropolitan area and looking at the metro as a whole, the market recovered from COVID-19 in July 2020. By the end of the year, Independence home prices were up 15.3% YoY, with home values appreciating by a whopping 13.3%, despite the pandemic. Even so, the Independence housing market is the most affordable one on our list of the best cities for Airbnb investment 2021.
The metro area welcomes millions of visitors every year. Independence stands out in the region because it prides itself as being a town full of “American stories” and as such, is a popular tourist destination for those looking to learn more about our nation’s history.
The city of Independence made changes to its short-term rental regulations in early 2020. Still, it’s legal to run an Airbnb business in the city – in fact, you can own up to five Airbnb rental properties. However, your properties will be subject to inspections, occupancy limits, and other rules to keep in mind.
#4. Fort Wayne, Indiana
- Median Property Price: $253,594
- Price per Square Foot: $120
- Average Airbnb Daily Rate: $81
- Monthly Airbnb Rental Income: $2,247
- Airbnb Cash on Cash Return: 5.9%
- Airbnb Occupancy Rate: 67%
- Top Airbnb Fort Wayne Investment Property for Sale
According to Realtor.com, the Fort Wayne real estate market ended 2020 with a 14% YoY growth in home prices. The days on market and active listings dropped, indicating a seller’s market. Fort Wayne has actually been topping lists as a hot real estate market for a few years now and it seems the COVID-19 pandemic didn’t do much to slow its growth. In fact, local properties enjoyed real estate appreciation, around 11% in 2020.
Check it out! Fort Wayne is actually one of the best multifamily markets for 2021.
Fort Wayne has focused its efforts on growing its tourism industry in recent years. The city and local county welcome over 6.5 million visitors annually, generating millions of dollars in revenue and taxes.
The state of Indiana adopted new short-term rental regulations back in 2018 as it was experiencing massive growth as an Airbnb destination, with Fort Wayne enjoying a large number of guest stays. Essentially, the new state law prohibited local governments from banning short-term rental operations. This includes non-owner-occupied rentals. While some cities fought against this law and others had ordinances grandfathered in before it passed, our research turned up no such Airbnb regulations for the Fort Wayne real estate market. And as it seems Airbnb investment properties in the city are protected by the state, the city is definitely one of the best places to buy an Airbnb property.
#5. Jackson, Mississippi
- Median Property Price: $280,561
- Price per Square Foot: $64
- Average Airbnb Daily Rate: $96
- Monthly Airbnb Rental Income: $2,653
- Airbnb Cash on Cash Return: 5.8%
- Airbnb Occupancy Rate: 66%
- Top Airbnb Jackson Investment Property for Sale
COVID-19 wasn’t able to slow price growth in the Jackson real estate market as home prices rose 12% YoY at the end of 2020. While Jackson might fly under the radar for many real estate investors, the metro area has been drawing attention from large firms and local properties appreciated in value by a total of 5.5% in 2020.
It shouldn’t be surprising to see Jackson, MS as one of the best cities for Airbnb investment 2021 as it’s always been a popular tourist destination. Millions visit the state of Mississippi every year, with many flocking to Jackson for its museums, parks, and cultural and historical attractions.
In terms of local Airbnb regulations in Jackson, it seems there are no official ordinances governing short-term rental properties. It should be noted that in 2019, the state of Mississippi did try to implement statewide laws to prevent local cities from passing strict ordinances banning short-term rental operations. However, it seems the bill did not pass.
#6. Riverside, California
- Median Property Price: $531,925
- Price per Square Foot: $308
- Average Airbnb Daily Rate: $156
- Monthly Airbnb Rental Income: $4,468
- Airbnb Cash on Cash Return: 5.6%
- Airbnb Occupancy Rate: 64%
- Top Airbnb Riverside Investment Property for Sale
The Riverside-San Bernardino-Ontario metro area managed to reach the benchmark for COVID-19 recovery back in July 2020. By the end of the year, home prices in the metro were up 17% YoY, with days on market and active listings down compared to 2019. Properties in the Riverside real estate market appreciated by a total of 10.1% last year.
It’s common knowledge that the California housing market is a hot tourist spot and because major cities like Los Angeles and San Francisco prohibit non-owner-occupied short-term rentals, Riverside is able to take a spot on the list of the best cities for Airbnb investment this year. However, to avoid any hefty fines, Riverside real estate investors should abide by the local short-term rental regulations set by the county which include obtaining certification, paying taxes, among other rules.
Riverside is one of the best cities for Airbnb rental income on this list!
#7. Visalia, California
- Median Property Price: $387,956
- Price per Square Foot: $180
- Average Airbnb Daily Rate: $84
- Monthly Airbnb Rental Income: $2,700
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Occupancy Rate: 77%
- Top Airbnb Visalia Investment Property for Sale
Although the Visalia real estate market remains relatively affordable compared to larger California cities, home prices shot up during 2020. By the end of the year, the median home price of the county area had increased 23% YoY. Visalia home values appreciated by a total of 12.7% during 2020.
Generally, tourism is a huge part of California’s economy and it’s no different in Visalia. Like the other markets on this list of the best cities for Airbnb investment 2021, the tourism industry in Visalia generates millions for the county.
Because tourism is important to the county area, Visalia vacation rentals are permitted to operate but there are tax regulations.
#8. Springfield, Missouri
- Median Property Price: $291,823
- Price per Square Foot: $128
- Average Airbnb Daily Rate: $94
- Monthly Airbnb Rental Income: $2,254
- Airbnb Cash on Cash Return: 5.4%
- Airbnb Occupancy Rate: 58%
- Top Airbnb Springfield Investment Property for Sale
Throughout the pandemic, local realtors continued to report that the Springfield real estate market was hot. Homes were selling fast thanks to the low mortgage rates which drove prices up. By year-end, the median home price in the Springfield housing market was up 15% YoY. Home values saw a total appreciation of 11.4% in 2020.
The city welcomes over 3 million overnight visitors annually. Before COVID-19, Springfield enjoyed around five years of record hotel occupancy rates as the tourism industry was booming. Popular attractions like the Wonders of Wildlife Museum, the Dickerson Park Zoo, and the historical site of a Civil War battle drive tourists to the city every year and will continue to do so post-COVID-19.
The city put in place regulations in 2019 which include zoning laws based on the type of short-term rental property, permits, licenses, and more.
A Few Final Words
Our list of best cities for Airbnb investment may surprise some – most people expect to see cities like Miami or Palm Springs on such lists. But the coronavirus has changed a lot about travel including where people want to go and where they’ll be booking Airbnbs in 2021. According to Airbnb, there was a major shift where smaller, less crowded destinations became more popular in 2020.
So in 2021, you will be most successful buying an Airbnb investment property in a lower-profile tourist destination like the ones we’ve listed above. If you’re still wary, just start checking out some of the numbers on Airbnb rental properties for sale in any of the cities listed above on Mashvisor. Using our real estate investment tools, you’ll quickly see how Airbnb investment properties in these cities are outperforming those in other major locations. Begin your search and analysis now with a 7-day free trial.
Note: This list is based on thorough market research. Be sure to contact local officials and check local ordinances before buying a house to rent out on Airbnb.