Here are the top performing cities around the US for their cash on cash return for real estate investment properties based on our data for quarter 4 of the year 2017.
Las Vegas, NV
Las Vegas has always been one of the most popular destinations for people traveling for both business and pleasure. So, it comes as no surprise that Las Vegas is one of the best performing cities when it comes to rental properties in general and short-term, or Airbnb rental properties in particular.
The drastically high appreciation rate that Las Vegas witnessed back in 2013 has cooled down over the years, reaching a level of 11.6% in 2016, and leading to a decrease in the demand for new real estate properties, which in turn led to a reduction in the average market prices of properties. This led to prices in Las Vegas being low, while rents are high, making investing in rental properties a very good choice for real estate investors.
Las Vegas real estate market stats:
Median price: $364,666
Average price per sq. ft.: $1,978
Traditional rentals cash on cash return: 2.67%
Airbnb rentals cash on cash return: 4.59%
Traditional rentals rental income: $1,411
Airbnb rentals rental income: $1,609
Number of listed properties:
- 4,264 investment properties
- 483 Airbnb rental properties
- 3,117 traditional rental properties
With a good average occupancy rate and higher than average rental rates, it is no wonder that Las Vegas performs better for Airbnb rental properties than it does for traditional rentals.
Note: Click Here to see the best investment properties in Las Vegas right now!
Related: Here Are the Top 10 Real Estate Markets for 2017
Lancaster, PA
Lancaster has seen a drastic increase in the average sale price of real estate properties as well as the average rent rate. This led Lancaster to become one of the top performing cities in the US when it comes to cash on cash return for Airbnb properties in particular.
As the city is known for its heavy reliance on tourism, Airbnb rental properties became the optimal choice for real estate investors looking for a reliable market with a very high potential for appreciation.
Lancaster real estate market stats:
Median price: $265,291
Average price per sq. ft.: $2,135
Traditional rentals cash on cash return: 1.77%
Airbnb rentals cash on cash return: 5.61%
Traditional rentals rental income: $1,066
Airbnb rentals rental income: $1,774
Number of listed properties:
- 121 investment properties
- 46 Airbnb rental properties
- 452 traditional rental properties
35% Airbnb occupancy rate
Although the data shows a very small number of Airbnb rental properties in Lancaster, the performance of Airbnb rental properties in the area shows great promise, and it is expected that real estate investors will make the most out of this and the demand for investment properties will increase with strong focus on Airbnb rental properties.
Note: Click Here to find the top investment properties in Lancaster, PA!
Nashville, TN
Nashville has seen a growth in employment in the past year due to a series of construction projects that helped the industry grow. Despite the new construction and increasing home prices, local homes have continued to stay affordable.
The population is growing more than double the US nationwide rate. Single-family homes are growing the most and would most likely be the most the optimal choice for investment properties.
The number of closings in 2016 increased by 10%, which explains the low inventory which is unusual for this city. Nashville has been listed as the third hottest housing market in the country, after Seattle and Portland, which should comfort those investing in Nashville real estate. If you considering buying investment properties, watch the mortgage rates carefully as they rose in Nashville post the 2016 presidential election.
Some perks to investing in Nashville real estate include affordable home prices, no personal income tax, high employment rate, and low cost of living.
Nashville real estate market stats:
Median price: $503,685
Average price per sq. ft.: $2,149
Traditional rentals cash on cash return: 2.32%
Airbnb rentals cash on cash return: 5.88%
Traditional rentals rental income: $1,784
Airbnb rentals rental income: $2,959
Number of listed properties:
- 546 investment properties
- 1,444 Airbnb rental properties
- 2,862 traditional rental properties
49% Airbnb occupancy rate
As you can notice, the number of investment properties that are currently listed in Nashville is not substantial. This is due to the very high demand for new investment properties and the low supply, which have led to properties being sold very quickly, keeping the current supply at low.
Note: Click Here to see Nashville’s top performing investment properties!
Related: Miami Real Estate Market: Top Neighborhoods – Q4 2017
Colorado Springs, CO
The Colorado Springs data speaks for itself. The city has witnessed a very drastic and surprising increase in the number of new listings as well as the number of sold properties. This, in turn, caused an increase in the median price of properties, and a very noticeable decrease in the average time needed for a property to sell on the market.
With this drastic increase in demand and supply, the Colorado Springs real estate market is performing better than ever, leading it to become one of the top 3 hottest real estate markets in the US right now.
Colorado Springs real estate market stats:
Median price: $367,393
Average price per sq. ft.: $2,534
Traditional rentals cash on cash return: 2.91%
Airbnb rentals cash on cash return: 6.44%
Traditional rentals rental income: $1,436
Airbnb rentals rental income: $2,257
Number of listed properties:
- 702 investment properties
- 251 Airbnb rental properties
- 691 traditional rental properties
48% Airbnb occupancy rate
Despite all of the stats and the performance of the Colorado Springs market improving, Airbnb rental properties are still performing better than traditional rentals in the area, with an average cash on cash return of 6.44%, which is a very healthy rate of return in comparison with other areas around the US.
Note: Want to see the highest ROI investment properties in Colorado Springs? Click Here to start looking!
Charleston, SC
Home prices in Charleston real estate are finally beginning to get back on track. Appreciation rates are fierce given the strong economy, new construction, and being one of the most affordable real estate markets in the country. Charleston is attracting real estate investors because of its favorable housing market conditions.
Charleston also attracts tourists because of its southern charm, maintained and unique architecture, and its rich history. It makes a great location for an Airbnb investment property and was listed as one of the most profitable Airbnb locations based on cash on cash return.
Another possible strategy for real estate investing in Charleston is buying rehab or fix-and-flip properties. While other cities have a much larger supply of foreclosure properties, Charleston’s supply increased mid-2016.
Charleston real estate market stats:
Median price: $610,969
Average price per sq. ft.: $2,030
Traditional rentals cash on cash return: 3.84%
Airbnb rentals cash on cash return: 10.09%
Traditional rentals rental income: $1,994
Airbnb rentals rental income: $4,116
Number of listed properties:
- 232 investment properties
- 449 Airbnb rental properties
- 362 traditional rental properties
56% Airbnb occupancy rate
Although Charleston is a major city in South Carolina and in the country, the home prices are still affordable and the city has a high demand for rental properties and short-term lodging. The city is expected to bring in more real estate investors, who will be able to collect high rents.
Note: To see Charleston’s best performing traditional and Airbnb properties, click here!
Related: These Are the Best Cities for Investment Properties in the US Right Now
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