Buying an Airbnb investment property is currently one of the most followed real estate investment strategies to make money in real estate.
However, as a real estate investor, you need to be armed with the essential knowledge about investing in real estate in general and the hottest Airbnb markets in particular in order to achieve success in the field.
Table of Contents
- How to Find Airbnb Property for Sale
- How to Run an Airbnb Business
- 10 Hottest Airbnb Markets in 2023
- Legal Issues with Airbnb
Owning an Airbnb property doesn’t only make you a real estate investor. It also turns you into an Airbnb host. It means that you will need to be more involved or more hands-on with the investment property you’re renting out to guests to keep them happy and keep your bank account thriving.
In this article, we will show you the things you should pay closer attention to before buying an Airbnb property, such as how and where to look for the right Airbnb investment. We believe successful Airbnb investors and hosts should have access to information that will give them an edge over their competitors.
If you’re ready to take a step closer to your Airbnb investment journey or improve your real estate investing game, keep reading.
Related: 5 Ways to Invest in Real Estate in 2023
How to Find Airbnb Property for Sale
The first thing that comes to the real estate investor’s mind before buying an Airbnb property is where do I find the right investment property for Airbnb? A very close second would be “how to buy Airbnb property with no money,” but the first one is easier to address. Let’s get into it.
First things first. Location is definitely one of the most crucial components in real estate investments. The most sought-after areas by people looking for short term rental investment properties are close to business centers, shopping centers, and public transportation.
Don’t forget that we’re talking about Airbnb properties here. Therefore, it is important to focus on areas that are near tourist attractions. It is because short term rental investments are more about finding the best place to spend a vacation or a weekend.
When looking for an Airbnb investment property, pay attention to the time of the year that gets a higher influx of tourists and visitors to the area and how popular it is.
So, here is your first clue: look for desirable places by asking yourself if you’re the one looking for a place to rent, what are the main characteristics you would be looking for in that property?
Buying an investment property in such an area will guarantee you will see a constant demand for that Airbnb property. It also increases the chances that the guests will keep rebooking and coming back.
Real Estate Platforms Make It Easier
Secondly, there are specialized real estate websites and platforms out there that will make your investment property search process much easier, like Mashvisor. Our website is one of the best when it comes to providing real estate analysis of different real estate markets and cities.
On Mashvisor, you will have access to thousands of real estate listings in different neighborhoods and cities in any state of your choice.
Mashvisor’s investment property analysis enables you to view the following:
- Data on the most profitable and practical investment strategy (Airbnb or traditional) in each neighborhood
- Cash on cash return values
- Cap rate values
- Rental income estimations
- Airbnb occupancy rates
All of the above information can be accessed through our investment property calculator. Our frequently-updated website gets you one step closer to buying an Airbnb property and starting a rental property business.
Get started on your 7-day free trial with Mashvisor today on your way to a thriving real estate investing career.
Check Out Foreclosures
Other ways to find an Airbnb property for sale include foreclosures. Because one man’s meat is another man’s poison, buying foreclosures is a great way of scoring a real estate property deal. You can find some of the best investment opportunities this way, as countless other investors did.
Foreclosures are real estate properties being offered for sale by the banks after a homeowner fails to pay off the mortgage in the specified period of time agreed upon by the two parties. In this case, the bank reclaims the property and tries to sell it to another buyer by selling the property at favorable prices. You can usually buy foreclosed properties at discounted or below-market prices.
Real estate agents in your area are surely the best people to go to when you’re considering buying foreclosures as investment properties. It is because they have connections with banks and know of the best and most recent foreclosure offers.
Knowing the above things will give you a better idea of how to search for the right investment property and where to start if you’re seriously considering buying an Airbnb property. Keep reading to benefit from more tips regarding Airbnb markets and the average occupancy rate for Airbnb.
Related: How to Find Profitable Rental Investment Properties for Sale
How to Run an Airbnb Business
Before going out and buying an Airbnb investment property, you need to ask yourself first if you have the chops to run a vacation rental business. This question goes beyond just the financial aspect of buying an Airbnb property; it is also about knowing how to be an Airbnb host with good management skills.
Before buying an Airbnb property, here are a number of things to take into consideration as a future Airbnb host:
Making money in real estate is not achieved until you’ve dedicated enough of your time to your investment properties. More than just buying an Airbnb investment, you also need to invest your time in your business. As an Airbnb host, you are expected to be available to address any property emergencies, guest concerns, questions, or demands.
In addition, you need to make sure your property is clean and well-equipped for new tenants. Answering emails and being physically present for your guests will pay off in the end. Guests are most likely to give you excellent reviews, which generates a good impression online.
A favorable impression will most likely make former guests consider revisiting and entice potential guests to make their bookings.
Keep Your Neighbors in Mind
Before buying an Airbnb investment property and making preparations to rent it out to different guests, get to know your neighbors first. It is respectful to put your neighbors in the picture by informing them that different people will be renting the place.
By creating a good relationship with your neighbors, you at least guarantee that they will inform you of any unusual and unpleasant activities going on in your vacation rental.
Additionally, knowing the neighborhood before buying an Airbnb property will save you from investing in a property in a bad location or close to unpleasant neighbors.
Make Your Listing Look Appealing
Before buying an Airbnb property, you need to know that you need to put more effort to make your property a lot more appealing to people all the time. Most people are attracted to visually pleasing properties, so make sure to include good pictures when listing your property for renting.
Furthermore, you need to provide a well-written description of your Airbnb property with all the important and eye-catching details. Answering emails and messages fast is also a necessity to maintain a good image as a host.
Related: How to Use Airbnb Predictive Analytics to Earn a High ROI
10 Hottest Airbnb Markets in 2023
As a real estate investor in the Airbnb field, you need to pay attention to the numbers; focus on the markets that will give you the best return on investment.
Before buying an investment property for Airbnb rentals, take a quick look at what your chosen location offers first. Looking at the average Airbnb occupancy rates across the US can be very telling of the best short rental markets this year.
So, which are the best cities for Airbnb investment? What is the average occupancy rate for Airbnb in the said areas?
We took a look at the latest numbers from Mashvisor’s February 2023 data and found ten of the best investment markets with the highest occupancy rates. The list below is ranked from highest to lowest in terms of Airbnb occupancy rate and filtered using the following criteria:
- Each location must have a median property price of no more than $1,000,000
- Each location must have at least 100 active listings on the short term rental market
- Each location must offer a monthly rental income of $2,000 or more
- Each location must have a minimum cash on cash return of 2%
- Each location must have no less than a 50% Airbnb occupancy rate
Given the criteria above, we’ve found the following places to be great investment locations for buying Airbnb properties in 2023:
1. East Rutherford, NJ
- Median Property Price: $592,120
- Average Price per Square Foot: $3,263
- Days on Market: 71
- Number of Airbnb Listings: 123
- Monthly Airbnb Rental Income: $3,658
- Airbnb Cash on Cash Return: 2.57%
- Airbnb Cap Rate: 2.59%
- Airbnb Daily Rate: $92
- Airbnb Occupancy Rate: 77%
- Walk Score: 90
2. Bellingham, WA
- Median Property Price: $668,537
- Average Price per Square Foot: $427
- Days on Market: 62
- Number of Airbnb Listings: 166
- Monthly Airbnb Rental Income: $3,760
- Airbnb Cash on Cash Return: 3.78%
- Airbnb Cap Rate: 3.82%
- Airbnb Daily Rate: $153
- Airbnb Occupancy Rate: 71%
- Walk Score: 48
3. Madison, WI
- Median Property Price: $507,979
- Average Price per Square Foot: $265
- Days on Market: 1
- Number of Airbnb Listings: 270
- Monthly Airbnb Rental Income: $4,965
- Airbnb Cash on Cash Return: 5.46%
- Airbnb Cap Rate: 5.52%
- Airbnb Daily Rate: $243
- Airbnb Occupancy Rate: 70%
- Walk Score: 45
4. Tigard, OR
- Median Property Price: $719,057
- Average Price per Square Foot: $320
- Days on Market: 63
- Number of Airbnb Listings: 146
- Monthly Airbnb Rental Income: $4,602
- Airbnb Cash on Cash Return: 3.56%
- Airbnb Cap Rate: 3.59%
- Airbnb Daily Rate: $180
- Airbnb Occupancy Rate: 70%
- Walk Score: 42
5. Newton, MA
- Median Property Price: $945,349
- Average Price per Square Foot: $2,793
- Days on Market: 50
- Number of Airbnb Listings: 241
- Monthly Airbnb Rental Income: $5,818
- Airbnb Cash on Cash Return: 3.40%
- Airbnb Cap Rate: 3.42%
- Airbnb Daily Rate: $202
- Airbnb Occupancy Rate: 70%
- Walk Score: 60
6. San Pedro, CA
- Median Property Price: $930,818
- Average Price per Square Foot: $561
- Days on Market: 88
- Number of Airbnb Listings: 102
- Monthly Airbnb Rental Income: $5,265
- Airbnb Cash on Cash Return: 3.84%
- Airbnb Cap Rate: 3.86%
- Airbnb Daily Rate: $167
- Airbnb Occupancy Rate: 69%
- Walk Score: 91
7. Hauula, HI
- Median Property Price: $961,609
- Average Price per Square Foot: $964
- Days on Market: 41
- Number of Airbnb Listings: 149
- Monthly Airbnb Rental Income: $6,497
- Airbnb Cash on Cash Return: 4.87%
- Airbnb Cap Rate: 4.90%
- Airbnb Daily Rate: $295
- Airbnb Occupancy Rate: 69%
- Walk Score: 0
8. Olympia, WA
- Median Property Price: $699,357
- Average Price per Square Foot: $392
- Days on Market: 61
- Number of Airbnb Listings: 128
- Monthly Airbnb Rental Income: $3,263
- Airbnb Cash on Cash Return: 2.45%
- Airbnb Cap Rate: 2.48%
- Airbnb Daily Rate: $122
- Airbnb Occupancy Rate: 69%
- Walk Score: 34
9. Union City, NJ
- Median Property Price: $611,473
- Average Price per Square Foot: $396
- Days on Market: 134
- Number of Airbnb Listings: 161
- Monthly Airbnb Rental Income: $3,414
- Airbnb Cash on Cash Return: 3.57%
- Airbnb Cap Rate: 3.63%
- Airbnb Daily Rate: $147
- Airbnb Occupancy Rate: 67%
- Walk Score: 97
10. Burlington, VT
- Median Property Price: $632,762
- Average Price per Square Foot: $3,584
- Days on Market: 85
- Number of Airbnb Listings: 276
- Monthly Airbnb Rental Income: $4,582
- Airbnb Cash on Cash Return: 3.61%
- Airbnb Cap Rate: 3.65%
- Airbnb Daily Rate: $220
- Airbnb Occupancy Rate: 67%
- Walk Score: 96
Look for and analyze the most profitable short term rental properties in areas near you with Mashvisor today.
Legal Issues With Airbnb
Before buying an Airbnb property in any area in the US, make sure to check out the area’s laws regarding Airbnb investments. Legal issues with Airbnb have emerged due to protests from housing activists affected by the new rental investment style.
While Airbnb is a great investment strategy for real estate investors, know that not all locations look favorably on vacation rental properties. In fact, places like Las Vegas and NYC have very strict short term rental regulations.
So, before you close a deal on any investment property, make sure that you read up on the local ordinances for short term rentals. When buying an Airbnb investment property, it won’t do you any good to close on a good deal and not be able to optimize your income due to Airbnb laws.
Just note that it is definitely not a reason for you to reconsider investing in real estate as an Airbnb property owner. Just think of it as a tip for you to make sure that everything is in order and to your advantage in the area you decide to buy an income property.
To know if your chosen location has limitations on vacation rentals, check out Mashvisor’s short term regulations page.
We hope that all the mentioned information earlier will be beneficial for your real estate investment journey.
As a future Airbnb property investor, knowing the hottest Airbnb markets and their average Airbnb occupancy rates will increase your chances of investment success.
Buying an Airbnb investment property must yield a positive cash flow for you to generate significant revenue and get a good return on your investment. Therefore, you must carefully choose a property with a good location and the best possible price.
While the abovementioned tips can be quite helpful, we strongly recommend being diligent in doing your own research. Due diligence should never be neglected, especially in real estate investing. It is one of the best ways you can protect your money and investment, so never ever take it for granted.
Adding due diligence to the above tips will take your real estate investing game to a whole new level. Doing it with the right information and tools will let you lead the pack. Mashvisor is here to help you find the best investment properties in the most profitable neighborhoods in any location of your choice.
Our tools are specifically designed to help real estate investors make smarter investment decisions by giving you access to a massive database of nearly every market in the US. It is regularly updated, so you’ll be more confident when you do the math and make accurate and realistic ROI projections.
Don’t forget that Mashvisor is here to answer your burning questions in anything related to investing in real estate, so don’t be a stranger.
Learn more about how Mashvisor can help you find the best deals in the most profitable markets by scheduling a demo now.