To make profitable Airbnb investments, you should find the best short term rentals for sale. Make sure to use these tools to help you get started.
Investing in short term rental properties is not as difficult as some might think. Just like any real estate investment strategy, it can be quite profitable when done right. But, if you’re planning to buy a vacation home to rent out on short-term listing sites such as Airbnb, it’s likely that you have a lot of questions about this strategy.
You may be asking yourself: How can I make money from Airbnb? How do I know if Airbnb is even profitable? Where are the best cities for Airbnb investment? These are some of the most commonly asked questions asked by beginning investors. Fortunately, you can find the answers to these questions on the Mashvisor blog.
Another important question that you may be asking yourself is: how can I find short term rentals for sale? Whether you are investing in long term or short term rentals, finding the best investment is not easy. That is, of course, if you’re following traditional methods of finding investment properties for sale.
But, thanks to the emergence of various real estate investment tools in recent years, this task is now made easy. In this article, we’ll introduce you to the best tools available today that can help you find short term rentals for sale. The best part is that you’ll find all these tools in one online platform—Mashvisor.
Table of Contents
- Is Short Term Rental Property a Good Investment in 2023?
- Remember to Keep Airbnb Regulations in Mind
- How to Find Rentals for Sale on Mashvisor
- Top 10 Markets for Short Term Rentals Based on Cash on Cash Return
- What are Some Platforms for Listing Short Term Rentals?
Is Short Term Rental Property a Good Investment in 2023?
According to experts, high demands for short term rentals are anticipated this year and beyond, which means short term rentals are a good investment in 2023. As travel restrictions have been lifted, many people are now eager to travel. This is the reason why the short term rental markets across the United States are back in business once again.
Whether you’re an existing Airbnb owner or just planning to invest in vacation rentals, this year and next are a great time for short term rental businesses. If you want to start this venture, just make sure to find the best short term rentals for sale, because not all Airbnb properties can be profitable.
Reasons to Invest in Short Term Rentals in 2023
When the pandemic started in early 2020, the short term rental market was one of the industries that were gravely affected. In fact, some short term rental investors suffered a great loss, while other Airbnb businesses have totally closed down. Fortunately, since vaccines became available in 2021, we are now seeing progressive recovery.
The good news is that short term rentals are now back in business and are actually doing better. Here are a few good reasons why you should consider investing in vacation rentals in 2023:
Tourism Is Back
After almost two years in lockdown, travel restrictions have finally been lifted and now, people from around the world are excited to travel again. Because of this, the tourism industry is back on its feet. As a matter of fact, since travelers are too eager to go on holidays, we can expect an influx of visitors in the United States this year and beyond.
Travelers Still Prefer to Stay in Short Term Rentals
When traveling for pleasure, many US travelers still prefer to stay in short term rentals. Usually, vacation rental properties are more affordable compared to hotels. Airbnb rentals also offer a more homey feel. In addition, vacation homes generally provide more privacy than hotels.
According to a survey conducted in 2022, travelers who prefer to stay in short term rental homes like to experience staying at unique properties. Also, since short term rentals typically offer more space than other types of accommodation, they are preferred by those who travel in groups or as a family. Moreover, travelers value amenities like kitchen and washers.
Travelers Are Booking Longer Stays
One of the most noted short term rental market trends in 2022 is that many travelers are now booking longer stays than usual. This is good news for short term rental owners because the longer your property is booked, the more cash flow security you’ll have. In fact, the Airbnb platform noted longer bookings that could go for 28 days or more.
Business Travelers Also Prefer Short Term Rentals
Short term rentals are not only for tourists—as a matter of fact, even business travelers nowadays prefer to stay in vacation rentals over hotels. This is because most businesses like the idea of being able to save on accommodation costs since many Airbnb rentals are less expensive than hotels.
Airbnb Rentals Can Also Be Your Own Vacation Home
If you choose to invest out of state, you’ll automatically have a vacation home whenever you want to go on a holiday away from your home state. Even if you only invest in a different city than where you are residing, it’s always a good idea to have a place to stay that’s near tourist attractions.
Risks Involved With Investing in Short Term Rentals in 2023
While the short term rental business is generally hot in 2023, no investment is without risks. Before you decide to look for short term rentals for sale and buy one, it’s crucial to know all the risks involved with Airbnb investing.
Here are a few of the short term rental risks that you should be aware of:
Local Regulations on Short Term Rentals
Keep in mind that not all states and cities allow short term rentals. In fact, vacation rentals are not yet legal in some cities. That is why it’s important to know the local regulations on short term rentals first before you decide on a location for your investment.
In some areas, there are certain restrictions that you need to be aware of. For instance, some cities do not allow anyone to operate a short term rental unless it is owner-occupied. This means that the Airbnb owner should be residing in the same property while it is being rented at the same time.
To avoid any confusion brought upon by these limitations, make sure to verify the rules and regulations regarding operating a short term rental property in your chosen local area.
Seasonality and Vacancies
Since a short term rental business is seasonal, there will be times when your property will be vacant. When it comes to rental property investments, vacancies can be detrimental to an investor’s profitability. A vacant Airbnb rental does not generate income and cash flow—however, owners still need to pay the costs of operating a vacation rental property.
As a short term rental property owner, there are potential liability risks involved, such as accidents like slips and falls, injury to your guests, and damage to a guest’s personal belongings. You also need to consider other possible circumstances like flood, fire, or earthquake while your guests are staying at the property.
Ensuring that you have sufficient insurance coverage can help mitigate these liability risks. However, keep in mind that this is an additional expense that you need to factor in when calculating your potential returns.
Owning a short term rental property needs regular inspection, cleaning, and maintenance. Since short term rentals typically expect regular comings and goings, you need to make sure it is clean and well-prepared in between transitions from one guest to another.
Moreover, welcoming different guests brings different risks and potential damage to your property. This is the reason why you should also set aside a budget for repairs whenever necessary.
Investing in the Wrong Location
One of the most dreaded risks when it comes to owning a short term rental is investing in the wrong location that doesn’t really attract tourists. That is why when looking for short term rentals for sale, make sure to check the demands for vacation rentals in the area.
If you invest in the wrong location, you could end up getting more vacancies and risk not generating sufficient income. Remember that the location of your investment property can greatly affect your profitability, so make sure to choose wisely.
The best locations for short term rentals are those that have an influx of visitors all throughout the year. For instance, Orlando, Florida is a favorite tourist destination because of its warm weather and beautiful beaches. That is why it is also a great location for investing in vacation rentals.
Factors to Consider When Finding Short Term Rentals for Sale
Investing in short term rentals in 2023 is a good idea because of the anticipated demand from travelers from around the world. It’s important to note, however, that successful short term rental investors should know where to invest. After all, the location of your investment property can either make or break your profitability.
When choosing a short term rental market to invest in, make sure to consider the following factors:
Safety of the Location
When we speak about location, we do not only refer to the state or city where you should invest in. We also refer to the specific neighborhood where the investment property is located. When choosing a neighborhood, make sure to find one that is generally safe for tourists.
Since the market for short term rentals is usually tourists, make sure to find short term rentals for sale that are located in a place where tourism is booming. Check the available tourist destinations within or near the property that you are eyeing as an Airbnb rental investment.
Aside from visitors, another common source of market for short term rentals is business travelers. Airbnb rentals that are located near a business district are also ideal as you’ll get to attract potential business guests. By also targeting business travelers, you’ll not only limit your occupancy to leisure visitors.
In general, a short term rental business is seasonal. As a vacation rental property owner, it’s important to understand that you’ll see highs and lows in a year, and this fluctuation is normal. However, you can mitigate your risk by choosing a location that is usually flocked by tourists all year round.
For example, vacation rental properties in Orlando, Florida usually have high demand because tourists love to visit the beaches in Florida. Plus, the warm weather in Orlando is one of the reasons why travelers go there at almost any time of the year.
When you are deciding on a location for your Airbnb investment, you should also consider the available amenities offered within the area. For instance, Airbnb rentals that are located near restaurants and shopping centers usually get booked more frequently. Also, short term rentals that are near public transport options are preferred by guests.
Remember to Keep Airbnb Regulations in Mind
As mentioned, not all locations allow the operation of short term rentals. Also, some cities have certain limitations that may restrict your profitability. When searching for short term rentals for sale, you first need to check in with the short term rental laws in your chosen area. This step is very crucial and should not be taken for granted.
Laws and regulations surrounding Airbnb rentals vary from city to city and even from one state to another. In recent years, many laws have emerged that restrict and even ban the use of short term rental properties as investments in many cities. This includes cities like Los Angeles, New York, San Francisco, and Las Vegas, among others.
In other cities, there are requirements regarding the type of property that can be listed as a short term vacation home. These requirements may vary, but they usually include the way a property should be designed, built, and maintained. Other requirements to keep in mind involve the owner-occupancy of an Airbnb property.
In most cases, Airbnb hosts or short term rental owners are required to register or obtain a license to operate a vacation rental. The permit should be secured before you’ll be allowed to legally rent out your Airbnb property. You need to pay various fees in order to register. Plus, you need to pay occupancy taxes and comply with insurance requirements.
Needless to say, it’s important to research local regulations in the city where you plan to invest in vacation rentals and make sure to comply with the law. This is a vital step before finding short term rentals to invest in. If you think you cannot abide by the law and follow the restrictions for vacation rentals, it’s best to find another location with less rigid regulations.
Other Legal Restrictions to Remember
Aside from local restrictions on short term rentals, it’s equally important to remember other legal restrictions involved in owning a vacation rental property. Examples of these legal restrictions are as follows:
Legal Restrictions for Condos, Coops, and Planned Developments
If your investment property is in a condominium, cooperative, or planned development, you need to use the property in accordance with the covenants, conditions, and restrictions (CC&Rs) or bylaws.
This document includes all restrictions regarding the use of the unit. In some cases, short term rentals may not be allowed entirely. In other cases, there are certain restrictions that you need to comply with. It’s best to read the CC&Rs first before buying a unit if you intend to use this solely as a short term rental.
Lease Restrictions on Renters
Some vacation property owners do not really own the property. If you are a renter and plan to rent out a space in your apartment to short-term guests, make sure to check your lease agreement for any provisions that restrict or prohibit subletting. It’s best to talk to your landlord and get their permission before you list a room for rent.
How to Find Rentals for Sale on Mashvisor
The key to finding short term rentals for sale is hidden in conducting research. Just like you’d research the rental market before investing in traditional rentals, you must also conduct a short term rental market research before buying any turnkey property. By doing so, you’ll know whether it’s a good idea to invest in Airbnb in your chosen area.
This research requires you to study the location and compare rental properties in terms of certain real estate metrics. These metrics allow you to gauge the profitability of a particular investment property. To find the best short term rentals for sale, the most important metrics to consider are the rental income, cap rate, cash on cash return, and occupancy rate.
Running these numbers helps you find the most profitable investment properties in the market with the highest rate of return. However, researching the short term rental market on your own and running these numbers by hand almost never gets accurate results. Since doing this manually is prone to error, it can lead to potentially bad investment decisions.
Luckily, Mashvisor provides the investment tools and short term rental data that you need to conduct your market and investment property search quickly and effectively. Here’s how to find short term rentals using Mashvisor’s tools and analyze them to make sure they will derive the most profit.
1. Rental Property Finder
The ultimate tool to find the best short term investments is, without a doubt, Mashvisor’s Rental Property Finder. As you can tell by the name, this tool allows real estate investors to browse rental properties for sale in different locations across the US housing market.
The tool comes with some filters that allow you to set your criteria of what type of property you’re looking for. To find short term rentals using this tool, simply set the “Rental Strategy” filter to Airbnb. You can also narrow down your investment property search by setting the city, miles, budget, property type, number of bedrooms, and number of bathrooms filters.
Using the latest machine learning algorithms and predictive analytics, Mashvisor’s Rental Property Finder will immediately provide you with a list of rental properties for sale that meet your criteria. Furthermore, the properties we recommend are those that have the highest potential for returns in terms of Airbnb cash on cash return.
With this investment tool, real estate investors could turn their property search process from three months into just 15 minutes!
Want to get access to this ultimate tool for finding short term rentals for sale? All you have to do is sign up for a 7-DAY FREE TRIAL with Mashvisor.
2. Real Estate Heatmap
As we all know, location is key for successful real estate investing, and this applies to Airbnb investing as well! And when we speak of location, we’re not only talking about the city, but you need to find a good neighborhood for investing in vacation rentals.
If you already have a city in mind but not sure which neighborhoods are best for owning short term rentals, our Real Estate Heatmap will help you out! This tool shows you a color-coded overview of how Airbnb rentals are performing in different areas. Simply type in your city of choice and select from the filters that you’d like to base your analysis of the area on.
These filters are:
- Listing Price
- Airbnb Rental Income
- Airbnb Cash on Cash Return
- Airbnb Occupancy Rate
For example, if you select Airbnb rental income, the Real Estate Heatmap will highlight the areas where short term rentals make the highest rental income. The color would either be dark blue (by default) or green (if you toggle on the “full color” setting). Likewise, if you select the Airbnb occupancy rate, the tool will highlight the areas with the highest occupancy rates.
You can keep adjusting the filters and compare different neighborhoods until you identify which one has the best Airbnb real estate investment opportunities.
3. Investment Property Calculator
The final and most important step for finding short term rentals that will bring you profit is to run the numbers behind the deal. This requires you to first calculate the costs of buying and operating a vacation rental business. Then you need to estimate what return on investment you can expect to earn from the property.
As mentioned, you don’t need to do this Airbnb investment analysis manually on your own anymore when you have Mashvisor’s real estate investment software to help you out. To make sure you’ve found a property that is worth listing on Airbnb, use our Investment Property Calculator, also known as the Airbnb Rental Calculator.
With this tool, you’ll get a readily available rental property analysis for any listing across the US housing market. This analysis includes short term rental data that comes straight from Airbnb and reflects the performance of active listings in the past 12 months. Therefore, you can rest assured that our data is accurate and reliable.
Moreover, we also take into account Airbnb comps in the area for accuracy. To help real estate investors make good decisions about their short term rental properties, Mashvisor’s calculator provides the following Airbnb analytics:
- Comparable Rental Income
- Monthly Expenses
- Cash Flow
- Cash on Cash Return
- Cap Rate
- Airbnb Occupancy Rate
These metrics will be shown for both the traditional and Airbnb rental strategies, so you can make quick comparisons and determine the optimal rental strategy for each property.
To start looking for and analyzing the best short term rentals for sale in your city/neighborhood of choice, click here.
Top 10 Markets for Short Term Rentals Based on Cash on Cash Return
The best cities for short term rentals are those that are near several tourist destinations, so there is a frequent influx of tourists to ensure high occupancy. The location’s climate and seasonality can also greatly affect the short term rental market. Generally, cities with warmer climates like Orlando, Florida have more edge when it comes to vacation rental investing.
When choosing the top markets for buying short term rentals for sale, we consider cities with Airbnb monthly income of over $2,000, occupancy rates of 50% or higher, and cash on cash returns of over 2%.
Here are the top 10 cities where you should consider investing in Airbnb based on Mashvisor’s September 2022 data:
1. White Settlement, TX
- Median Property Price: $279,843
- Average Price per Square Foot: $161
- Number of Airbnb Listings: 142
- Monthly Airbnb Rental Income: $3,636
- Airbnb Cash on Cash Return: 8.05%
- Airbnb Cap Rate: 8.31%
- Airbnb Daily Rate: $152
- Airbnb Occupancy Rate: 57%
- Walk Score: 42
2. Nashville, IN
- Median Property Price: $468,167
- Average Price per Square Foot: $189
- Days on Market: 59
- Number of Airbnb Listings: 140
- Monthly Airbnb Rental Income: $4,968
- Airbnb Cash on Cash Return: 7.72%
- Airbnb Cap Rate: 7.87%
- Airbnb Daily Rate: $260
- Airbnb Occupancy Rate: 52%
- Walk Score: 50
3. Sweetwater, FL
- Median Property Price: $584,713
- Average Price per Square Foot: $352
- Days on Market: 63
- Number of Airbnb Listings: 411
- Monthly Airbnb Rental Income: $5,023
- Airbnb Cash on Cash Return: 7.65%
- Airbnb Cap Rate: 7.80%
- Airbnb Daily Rate: $166
- Airbnb Occupancy Rate: 51%
- Walk Score: 82
4. Port Ewen, NY
- Median Property Price: $388,960
- Average Price per Square Foot: $234
- Days on Market: 46
- Number of Airbnb Listings: 229
- Monthly Airbnb Rental Income: $4,704
- Airbnb Cash on Cash Return: 7.61%
- Airbnb Cap Rate: 7.80%
- Airbnb Daily Rate: $217
- Airbnb Occupancy Rate: 56%
- Walk Score: 55
5. Rio Grande, NJ
- Median Property Price: $361,309
- Average Price per Square Foot: $244
- Days on Market: 46
- Number of Airbnb Listings: 721
- Monthly Airbnb Rental Income: $4,068
- Airbnb Cash on Cash Return: 7.54%
- Airbnb Cap Rate: 7.73%
- Airbnb Daily Rate: $284
- Airbnb Occupancy Rate: 52%
- Walk Score: 52
6. Clawson, MI
- Median Property Price: $280,493
- Average Price per Square Foot: $233
- Days on Market: 28
- Number of Airbnb Listings: 281
- Monthly Airbnb Rental Income: $3,531
- Airbnb Cash on Cash Return: 7.51%
- Airbnb Cap Rate: 7.73%
- Airbnb Daily Rate: $175
- Airbnb Occupancy Rate: 60%
- Walk Score: 69
7. Del Haven, NJ
- Median Property Price: $449,939
- Average Price per Square Foot: $301
- Days on Market: 47
- Number of Airbnb Listings: 196
- Monthly Airbnb Rental Income: $5,010
- Airbnb Cash on Cash Return: 7.34%
- Airbnb Cap Rate: 7.48%
- Airbnb Daily Rate: $282
- Airbnb Occupancy Rate: 57%
- Walk Score: 14
8. Reading, OH
- Median Property Price: $234,520
- Average Price per Square Foot: $141
- Days on Market: 51
- Number of Airbnb Listings: 153
- Monthly Airbnb Rental Income: $2,865
- Airbnb Cash on Cash Return: 7.32%
- Airbnb Cap Rate: 7.58%
- Airbnb Daily Rate: $100
- Airbnb Occupancy Rate: 57%
- Walk Score: 80
9. Juneau, AK
- Median Property Price: $440,750
- Average Price per Square Foot: $277
- Days on Market: 47
- Number of Airbnb Listings: 211
- Monthly Airbnb Rental Income: $4,782
- Airbnb Cash on Cash Return: 7.15%
- Airbnb Cap Rate: 7.30%
- Airbnb Daily Rate: $217
- Airbnb Occupancy Rate: 65%
- Walk Score: 84
10. Orlando, FL
- Median Property Price: $459,142
- Average Price per Square Foot: $270
- Days on Market: 62
- Number of Airbnb Listings: 1,215
- Monthly Airbnb Rental Income: $2,763
- Airbnb Cash on Cash Return: 2.12%
- Airbnb Cap Rate: 2.16%
- Airbnb Daily Rate: $120
- Airbnb Occupancy Rate: 51%
- Walk Score: 41
Are you ready to invest in Airbnb rentals? Start searching for short term rentals for sale now!
What are Some Platforms for Listing Short Term Rentals?
Short term rentals are usually listed on online platforms that serve as a marketplace where hosts and guests could interact. There are several benefits for using short term rental platforms, including the following:
- Marketing of your vacation rental property
- Access to thousands and millions of users
- Streamlined communication and booking process
- Access to customer reviews that can help you grow your short term rental business
- Ability to check reviews on guests, so you will know if they are good renters or not
Because of the popularity of short term rentals, there are several short term listing platforms available. When choosing a listing platform, make sure to consider these following factors:
- The number of users subscribed to or using the platform
- The fees involved for listing a property on the platform, including booking commissions and credit card charges
- The ease of use and other useful features that you may find valuable
Here are the top three platforms for listing short term rentals that you should consider when you invest in vacation rental properties:
Airbnb is one of the most famous and fastest growing short term rental listing platforms available. Since it is one of the biggest online marketplaces for vacation rentals, it can help you expose your short term rental property to a large pool of users. This means that your property will have a high chance of getting booked when listed on Airbnb.
Another advantage for listing your property on Airbnb is that it doesn’t charge you with listing fees. However, it charges at least 3% (and this could go as high as 15%) of your rental income when your property is booked. Regardless, Airbnb is still one of the most preferred platforms by many short term rental investors.
Another listing site to consider is VRBO, which also offers a lot of benefits to short term rental hosts. However, VRBO only allows you to list private spaces like entire homes or apartment units. It does not allow you to list a spare room or any owner-occupied vacation rental. Because of this, VRBO is ideal for those who target bigger groups and families.
Hosts will also have an option to either pay per booking, which costs at least 5% plus a 3% credit fee, or pay an annual subscription starting at $499 per year to use the platform. If you have premium or luxury properties in the best locations, VRBO may be a practical option.
Homestay.com allows you to rent out your entire property to guests, as well as a spare room in your owner-occupied home. This platform is best for helping guests find rooms and other types of lodging options. When you list your short term rental property on Homestay.com, you’ll be charged with a standard fee of 3%.
Start Finding Short Term Rentals Now
Finding short term rentals for sale using Mashvisor’s top three real estate investment tools makes things a lot easier. Mashvisor’s database contains several available properties for sale, including turnkey properties and those that may need a little improvement. It’s important to study the analytics and figures to determine if it will make a good investment.
When finding a property using Mashvisor, all you need to do is enter your desired city or neighborhood, and customize other filters like budget, property type, and size. This allows you to get more personalized results based on your preference. Select the property that interests you and check the metrics to determine if it will make a profitable investment.
Make sure to utilize the Airbnb investment calculator to help you make an informed decision based on accurate figures. You can also customize your expenses and financing option, so you can get a more accurate calculation. This way, you’ll know whether a property will become a good short term rental investment or not.
Find the right investment property in the right location, and start investing in Airbnb from there. When choosing a location, make sure to consider the demand for vacation rentals and the seasonality of Airbnb business. One of the best locations for investing in Airbnb is Orlando, Florida because of its popularity among both local and international tourists.
Once you have chosen an Airbnb property, learn how to advertise the rental to start getting bookings and making money from your short term rental investment.
Interested in trying out our tools? Start out your 7-day free trial with Mashvisor now.