Airbnb RentalsIs Airbnb a Good Investment Considering All of the Regulations? by Abdallah Allabadi January 14, 2019February 4, 2019 by Abdallah Allabadi January 14, 2019February 4, 2019Owning an Airbnb investment property is, without a doubt, a great way to earn extra money. But, is Airbnb a good investment considering all of the regulations? In recent years, many cities across the US have regulated Airbnb rentals in the form of restrictions and limitations on the number of days a property can be rented out.But don’t let this get you down. There are still many great places to invest in Airbnb without needing to worry about regulations, making Airbnb a great real estate investment.Why Is Airbnb a Good Investment? 1- The short term rental market is growingKeeping up with market trends is the key to success when it comes to real estate investing. Recent studies show that the short term rental market, which includes Airbnb properties among others, is expected to grow 7.9% annually. Airbnb rental properties are becoming more and more appealing to vacationers and travelers, as they offer several advantages when compared to traditional hotel rentals.Therefore, to answer the question “Is Airbnb a good investment?”- the answer is a solid yes. As Airbnb grows in popularity and attracts more and more guests, buying a vacation rental property seems like a reasonable investment in cities where Airbnb is not heavily regulated.As an Airbnb investor, you should aim to find an investment property in a prime location that guarantees a high occupancy rate throughout the year.2- Higher rental incomeIt is no secret that Airbnb rentals have a higher potential for profits than traditional long term rentals. Since Airbnb rentals are rented out on a nightly basis, the price per night is much higher than that of a long term rental. Even when taking into consideration several factors such as vacancy cost and occupancy rate, your Airbnb investment would still make more profit.Related: What Kind of Airbnb Occupancy Rate Can You Expect?When it comes to owning an Airbnb rental property, location is the decision maker of how profitable your investment will be. Airbnb guests value proximity to amenities and attractions. Therefore, when searching for Airbnb property to buy, you should take into consideration the audience you are targeting.3- Duality of useA major advantage of owning an Airbnb property is that you can use it as your secondary residence where you can spend your vacations. Part-time real estate investors find this convenient as they can earn money from a property and still be able to use it whenever they want. Airbnb allows you to choose which dates your rental property is available, something you cannot do when following a long term rental strategy.Cities to Avoid When Investing in Short Term RentalsBack to our main question. Is Airbnb a good investment? Surely not if you intend to invest in an Airbnb rental in one of these cities.1- New YorkAirbnb regulations are quite strict in New York City. For example, it is illegal to rent out properties for less than 30 days unless the owner or the permanent tenant is residing in the property at the same time.2- San FranciscoAdopting a similar policy as New York, Airbnb rentals are only allowed if the hosts are residents in the property. Moreover, you are only allowed to rent out your property for 90 days per year.3- Santa MonicaSanta Monica is best known for wiping out 80% of its Airbnb listings after enforcing tough Airbnb regulations. The regulations require Airbnb investors to live on the property, get a business license, and collect 14% occupancy tax to be paid to the city.Related: Top 3 Cities in the US with Strict Airbnb RegulationsAirbnb Is a Good Investment If You Use an Airbnb Profit CalculatorThe Airbnb profit calculator is your best friend when looking for Airbnb properties for sale. The tool, which is an investment property calculator, can you help you evaluate the performance of any listed property.How is Airbnb a good investment with an Airbnb profit calculator? The tool calculates basic real estate metrics that can help you decide if the property is worth it or not. Using real estate analytics and other comparable properties, the tool is able to predict the Airbnb occupancy rate and rental income as well as calculate cap rate, cash on cash return, and cash flow.Using an Airbnb profit calculator can help you grow your real estate investment business. Thanks to the cash flow analysis provided by the tool, you can easily determine how soon you can grow your real estate business.Where Is Airbnb a Good Investment?Using Mashvisor’s Airbnb profit calculator, we found the 5 best cities for Airbnb investment where operating a short term rental is legal and profitable.1- Airbnb San AntonioAirbnb rentals in San Antonio are not regulated and the city has many affordable investment properties to offer.Median price: $287,760Airbnb rental income: $2,159Airbnb cash on cash return: 3%Airbnb occupancy rate: 49%Related: San Antonio Real Estate Is a Top Market for Airbnb Investments2- Airbnb IndianapolisThe lack of strict Airbnb laws and affordability of housing makes Indianapolis one of the best cities to invest in short term rentals.Median price: $212,852Airbnb rental income: $1,888Airbnb cash on cash return: 4%Airbnb occupancy rate: 44%3- Airbnb Palm SpringsIs Airbnb a good investment in Palm Springs? Despite the recent regulations, the city remains a good destination to buy a short term rental property. The high occupancy rate and Airbnb rental income are only overshadowed by a high median price of properties.Median price: $680,824Airbnb rental income: $4,342Airbnb cash on cash return: 4%Occupancy rate: 57%4- Airbnb Fort LauderdaleShort term rentals in Fort Lauderdale are a good investment given the high demand for vacation rentals in the city. Despite the regulations, investing in Airbnb in Fort Lauderdale remains profitable.Median price: $659,772Airbnb rental income: $2,953Airbnb cash on cash return: 1%Occupancy rate: 51%5- Airbnb Key WestIs Airbnb a good investment in Key West? Look at the numbers below and be the judge. If you can afford an investment property that nears a million dollars, you will make an outstanding income of almost $9000 per month.Median price: $973,004Airbnb rental income: $8,710Airbnb cash on cash return: 7%Occupancy rate: 71%To start looking for and analyzing the best Airbnb investment properties in your city and neighborhood of choice, click here.The Bottom LineThe question should not be “Is Airbnb a good investment?” What you should be asking now is where to invest in Airbnb properties! Use Mashvisor to find short term rentals with a high return on investment now.To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here. Start Your Investment Property Search! START FREE TRIAL Airbnb RegulationsIndianapolis INInvestment CalculatorKey West FLNew York City NYSan Francisco CA 0FacebookTwitterGoogle +PinterestLinkedin Abdallah AllabadiAbdallah is a civil engineer with Masters in Real Estate and Facility Management. He focuses on writing about real estate analysis and the top locations for buying properties. Previous Post 5 Risks in Real Estate Investing and How to Limit Them Next Post Buying Rental Property in Florida Can Make for a Great Investment in 2019 Related Posts Should You Invest in Studio Apartments for Sale? 7 Tips to Achieve a High Airbnb Occupancy Rate Major Challenges of Owning an Airbnb Rental How to Invest in Short Term Rentals: A Step-by-Step Guide Airbnb Palm Springs in 2018: Yes or No? Want to Succeed with Airbnb Real Estate Investing? Read This! The Best Real Estate Investment Properties in Anaheim, CA Most Affordable Locations for Buying Vacation Home Rentals in the Florida Real Estate Market in 2018 5 Things You Need to Do to Boost Your Airbnb Reviews Can Airbnb Investment Properties Be Passive Income Investments? Professional Property Management: A Key to Success or a Waste of Money? Airbnb vs HomeAway: Where Should You List Your Rental Property?