These are the 10 best cities for Airbnb investment 2022, based on Mashvisor’s latest data. Is your real estate market of interest one of them?
Even though the US recently lifted its international travel ban and started allowing vaccinated foreigners to travel into the country, the Omicron variant is preventing a lot of inbound travel. Thankfully, 76% of Americans remain in a ready-to-travel state of mind. With two-thirds of them still excited for leisure travel in the next year, Airbnb hosts can still feel confident about getting bookings from domestic tourists in 2022.
One of the reasons is that travelers will be more likely to take precautionary measures. Instead of staying in a hotel where they risk getting the virus from the hotel staff and other guests, they would rather stay in a vacation home where they can have the place all to themselves.
Another way to take precautionary measures is to travel in groups. Families and friends consisting of three or more people have been traveling together to minimize interacting with people outside of their bubble and thereby minimize their risk of getting the virus.
The increase in remote workers is another trend to look out for. While they have been working from home since the start of the pandemic, they can now work from anywhere, too. They might take this opportunity to stay in a town they have always wanted to visit or live in and work from there for a week. Airbnbs with fast internet connections will definitely see a lot of bookings from this market.
If you are a real estate investor who wants to take advantage of this opportunity, here is a list of the 10 best cities for Airbnb investment 2022 to help start your search.
6 Factors to Consider When Selecting the Best Cities for Airbnb Investment 2022
When setting up your Airbnb investment, it is important to choose the best vacation rental markets to ensure that you will be profitable. But what constitutes the best cities for Airbnb investment 2022? When creating this list, we considered the following factors:
US Housing Market
If you have not heard yet, home prices in the US rose again by 18.4% in October. This is still due to record-low mortgage rates, a limited supply of houses for sale, and pent-up demand from consumers who have been wanting to move since last year. Fortunately, the price growth has started slowing down, and the real estate market forecast says that it will continue to decelerate next year.
In this article, we chose markets with relatively low median home prices so affordability will not be a problem, especially for beginner investors. If you are planning to use financing, however, make sure to buy a property soon as interest rates are forecasted to go up in 2022.
Seasonality
In the context of short-term rentals, seasonality is the variance in traveler demand throughout the year. It is unique to each market, like how ski towns tend to have higher demand in the winter months than in the summer.
The top short term rental markets do not always depend on the seasons, so deciding on which one to invest in depends on your preference. If you are an investor who wants to host Airbnbs on certain months only so you can focus on other things for the rest of the year, remote locations are best for you. Meanwhile, urban locations that attract business travelers, as well as evergreen vacation spots, are perfect for those who want to earn a consistent income.
In this blog post, the best cities for Airbnb investment 2022 are either seasonal or evergreen. But we made sure that even the lowest season will net you a positive return.
Occupancy Rate
Occupancy rate is the proportion of days in a month that a property has bookings. It is one of the most important metrics for real estate investors. A high occupancy rate will see high revenue, as long as you price your daily rate correctly.
For this list, we chose the best cities for Airbnb investment 2022 that have an occupancy rate of at least 50% as an indicator that these locations get visitors often. Of course, once you get started, you would want to aim for at least a 90% occupancy rate.
Cash on Cash Return
Cash on cash return is the most popular metric for investors measuring the profitability of their rental properties. It measures the net income relative to the initial cash investment made to buy that property. Cash on cash return tells you how much of your out-of-pocket investment you are earning back each year.
For example, if you bought your Airbnb property using financing, you would divide your earnings for the year by the total mortgage payments you made for that same period.
This metric is a great way to determine how an investment property will perform and ultimately help you decide on whether to buy it. Airbnbs tend to give higher cash on cash return than traditional rent, which is why many choose it as their preferred real estate investment strategy. The best cities for Airbnb investments 2022 on this list have a cash on cash return of at least 8%.
Average Daily Rate
While it is not an indicator of profitability in a certain market, the average daily rate helps you decide what to charge for your Airbnb should you invest in that area. Learning how to price your short-term rental will have a big impact on your success in the market. If you charge too high, you might get a below-average occupancy rate. But if you charge too low, you might leave a lot of money on the table, especially during peak season or around dates of popular events.
We looked at Mashvisor’s data collated from verified and active Airbnb listings to get the average daily rate of the best cities for Airbnb investment 2022. We also chose the markets that meet the 1% rule, which states that the monthly Airbnb income should be at least equal to 1% of the median home price in order to be profitable.
Airbnb Regulations in the City
The profit potential is irrelevant if short-term rentals like Airbnb turn out to be illegal in your area of interest. Thus, it is important that you understand the laws in the city, county, or state that you plan to invest in before beginning your property search.
While our team at Mashvisor does not give legal advice, we want this article to be useful to you. So we made sure to only include the best cities for Airbnb investment 2022 that either have no short-term rental restrictions or enforce relaxed regulations. Nevertheless, we encourage you to contact the appropriate local government or consult a local lawyer if you have any questions or clarifications.
The 10 Best Cities for Airbnb Investment 2022
#1: Kirtland, OH
- Median Property Price: $508,422
- Average Price per Square Foot: $178
- Days on Market: 63
- Airbnb Rental Income: $5,113
- Airbnb Cash on Cash Return: 10.00%
- Airbnb Daily Rate: $143
- Airbnb Occupancy Rate: 70%
- Walk Score: 14
With a 10% cash on cash return, Kirtland is the best place to buy short term rental property today. The median property price may be higher than most of the markets in this list, but Kirtland, OH homes for sale on Mashvisor actually start at $85,000.
#2: Westville, NJ
- Median Property Price: $168,633
- Average Price per Square Foot: $151
- Days on Market: 84
- Airbnb Rental Income: $1,992
- Airbnb Cash on Cash Return: 9.98%
- Airbnb Daily Rate: $76
- Airbnb Occupancy Rate: 83%
- Walk Score: 45
Despite an average Airbnb monthly income of under $2,000, Westville is one of the best places to buy an Airbnb. This is because of its high cash on cash return of 9.98% and occupancy rate of 83%.
#3: Pulaski, VA
- Median Property Price: $144,613
- Average Price per Square Foot: $126
- Days on Market: 51
- Airbnb Rental Income: $3,483
- Airbnb Cash on Cash Return: 9.88%
- Airbnb Daily Rate: $241
- Airbnb Occupancy Rate: 58%
- Walk Score: 63
Airbnbs in the town of Pulaski enjoyed high earnings this year. In the past 12 months, their average monthly rental income ranged from $3,429 to $6,226.
#4: Spring Grove, IL
- Median Property Price: $253,617
- Average Price per Square Foot: $150
- Days on Market: 29
- Airbnb Rental Income: $7,171
- Airbnb Cash on Cash Return: 9.80%
- Airbnb Daily Rate: $328
- Airbnb Occupancy Rate: 66%
- Walk Score: 21
If you are looking for a market that is popular among groups of travelers, the village of Spring Grove, IL fits the bill. The highest-earning Airbnbs in the area tends to have two to four bedrooms, earning as much as $8,319 and getting a 90% occupancy rate in the peak of summer.
#5: Osceola, WI
- Median Property Price: $268,695
- Average Price per Square Foot: $218
- Days on Market: 155
- Airbnb Rental Income: $3,670
- Airbnb Cash on Cash Return: 9.24%
- Airbnb Daily Rate: $254
- Airbnb Occupancy Rate: 55%
- Walk Score: 56
Airbnbs in Osceola earned an average monthly income ranging from $3,246 to $6,485 in the past 12 months. Meanwhile, the occupancy rate reached as high as 82%.
#6: Franklin, NH
- Median Property Price: $254,120
- Average Price per Square Foot: $149
- Days on Market: 140
- Airbnb Rental Income: $4,280
- Airbnb Cash on Cash Return: 9.23%
- Airbnb Daily Rate: $270
- Airbnb Occupancy Rate: 79%
- Walk Score: 48
According to Mashvisor’s data, the most popular Airbnbs were one-bedroom units, which had an 89% occupancy rate. In the past 12 months, rental homes in Franklin, NH earned a monthly average of $3,835 to $8,739.
#7: Garfield Heights, OH
- Median Property Price: $118,039
- Average Price per Square Foot: $93
- Days on Market: 65
- Airbnb Rental Income: $1,490
- Airbnb Cash on Cash Return: 9.14%
- Airbnb Daily Rate: $75
- Airbnb Occupancy Rate: 78%
- Walk Score: 56
In Garfield Heights, the most popular Airbnbs were two-bedroom units, which had an occupancy rate of 96%. Unlike other markets in this list, Airbnbs in this area earned a steady monthly income ranging from $1,730 in February to $2,166 in June.
#8: Cottage Grove, MN
- Median Property Price: $584,643
- Average Price per Square Foot: $204
- Days on Market: 262
- Airbnb Rental Income: $7,305
- Airbnb Cash on Cash Return: 9.09%
- Airbnb Daily Rate: $367
- Airbnb Occupancy Rate: 77%
- Walk Score: 37
The median property price in this city is also higher than the other markets, but the starting price of Cottage Grove, MN homes for sale on Mashvisor is $230,000 at the time of writing. Airbnbs with four bedrooms or more were the most popular rentals in the city, with a perfect occupancy rate of 100%. Their average monthly income was higher than the others as well, ranging from $5,253 in February to $11,097 in June.
#9: Battlefield, MO
- Median Property Price: $257,850
- Average Price per Square Foot: $133
- Days on Market: 36
- Airbnb Rental Income: $3,365
- Airbnb Cash on Cash Return: 8.95%
- Airbnb Daily Rate: $125
- Airbnb Occupancy Rate: 78%
- Walk Score: 31
This city is perfect for beginner investors with low capital, because Battlefield, MO homes for sale on Mashvisor start at $179,900. In the past 12 months, Airbnbs in this area earned an average of $1,806 in December (its weakest month) to $3,818 in June.
#10: St. Robert, MO
- Median Property Price: $212,250
- Average Price per Square Foot: $100
- Days on Market: 51
- Airbnb Rental Income: $2,776
- Airbnb Cash on Cash Return: 8.90%
- Airbnb Daily Rate: $109
- Airbnb Occupancy Rate: 70%
- Walk Score: 23
Last but not least, St. Robert, MO homes for sale on Mashvisor start at $65,500, making it another great neighborhood for beginner investors to acquire their first property. They are likely to make decent returns, too: in the past 12 months, Airbnbs in this city made an average of $1,908 to $3,002 per month.
Find Your Next Airbnb Property on Mashvisor
Despite the COVID-19 virus still affecting travel sentiments and behavior, short-term rental homes like Airbnb are bound to turn profits next year. Travelers who are in groups or want to avoid interacting with staff and other guests would prefer to stay in a more exclusive accommodation. Meanwhile, remote workers who have been stuck at home for more than a year would want to find another place to work while still feeling at home.
The 10 best cities for Airbnb investment 2022 are not the only ones worth looking into. Using a leading real estate investor’s tool like Mashvisor can help you find hidden gems and surprising locations. Our heatmap will show you which parts of the US are better performing compared to the others. With the Property Finder, you can find more profitable properties in up to five neighborhoods at the same time; no need to open several browser tabs to compare.
And when you click on a house that interests you, the Airbnb calculator embedded in the listing page will let you estimate your 10-year investment payback. Just input your mortgage details, one-time and running expenses, and monthly income. Or you can also just use the default amounts, which our AI estimated based on the average numbers set by comps in the area. Sign up for Mashvisor now and get 15% off.