The question “is Airbnb profitable” has been asked every year, especially after the pandemic and economic downturn we’ve all been through.
Real estate investors acknowledge how lucrative Airbnb profits were—and somewhat still are. They are still considering either getting into it for the first time or expanding their rental property business.
In line with this, we hope to answer a few questions like, “Is Airbnb profitable for hosts” and, “How profitable is Airbnb in 2022?” Read on to find out more.
Is Airbnb Still Profitable in 2022?
The main question we want to answer at the end of this blog is, “is Airbnb profitable?” But before we can answer, “How much does an Airbnb host make,” we need to understand what Airbnb is and how it works.
What does Airbnb mean? To put it simply, Airbnb is an online vacation rental marketplace that provides travelers with cheaper accommodation alternatives. Airbnb initially came from the idea of two guys offering air beds and breakfasts to artists attending a conference in San Francisco back in 2007. They needed extra money to pay their rent, and renting out some bed space in their loft was a light-bulb moment for Airbnb’s founders, Brian Chesky and Joe Gebbia. After a few years of ups and downs, it has become the present vacation rental phenomenon that swept across the globe.
Airbnb’s business model allows the company to earn from both guests and Airbnb hosts. The company charges guests a non-refundable service fee (typically around 14.2%). Airbnb hosts, on the other hand, are charged a 3% service fee for every successful booking to cover certain administrative services.
With over seven million listings in more than 200 countries, Airbnb profitability is one that thousands of American real estate investors want to partake of. As of September 2021, the site has over 150 million users. An estimated six renters check into an Airbnb vacation rental every second, allowing hosts to realize Airbnb profits on a constant basis. With numbers like that, do you still ask yourself, is Airbnb profitable? No? We didn’t think so.
How Profitable Is Airbnb in 2022?
Although Airbnb sales dropped in 2020 due to COVID-19, the company has found a way to stay afloat by pivoting during the pandemic. Not only was it able to withstand the test of the health crisis, but it provided plenty of folks with an additional income stream needed to survive the pandemic’s economic effects. As travel restrictions have been lifted and folks are now allowed to move freely in and out of the states, the demand for Airbnb-listed properties and the potential for attractive Airbnb profits have steadily increased over the past year.
Airbnb profits are showing good signs of a recovering economy despite certain lifestyle changes caused by the pandemic. The lockdown season has disrupted many people’s travel plans and had them eagerly anticipating the day when restrictions would ease so they can see the world once again.
Airbnb Hosting Amid the Pandemic
While we’re still not out of the pandemic woods yet, the federal and local governments are doing their best to bring back some sense of pre-COVID normalcy by opening the economy and lifting the travel ban. These factors allowed Airbnb hosts to get back into the swing of things and recover their lost momentum.
Several newbie hosts started their own Airbnb business amid the pandemic, and so far, they seem to be doing okay. And while Airbnb appears to be gaining momentum, real estate investors need to remember that owning an Airbnb now comes with certain conditions in the form of higher health and safety hosting standards.
Hosting in a pandemic is no longer just an issue of is Airbnb profitable or not. It now brings a sense of moral obligation to protect guests and renters by providing the best quality services that adhere to high health and safety standards.
How to Determine Airbnb’s Profitability in 2022
Answering the question, “is Airbnb profitable,” is hinged on determining a property’s profitability. The right investment property will surely net you a handsome return, while investments made on poor decision-making will generally result in losses.
Here’s a glance at how to determine Airbnb profitability.
Related: How Is Airbnb Profit Calculated
Finding the Most Profitable Investment Properties
Is Airbnb profitable? Yes and no. The difference between these two answers has a lot to do with finding the right short-term rental property. Savvy investors go the extra mile to find out how to maximize profits with Airbnb. They all know that location is the key to a successful real estate investment.
One of the best things about real estate investing today is that those interested in it have access to the technology that will help them find the right property. Online real estate marketplace websites, like Mashvisor, have certain features that make investment property search easier and more efficient.
Let’s take a look at some of the ways that Mashvisor helps newbie and experienced investors.
Airbnb Neighborhood Analysis
Not all locations are ideal for short-term rentals. In the same breath, not all of them are great for long-term traditional rentals, either. Each market has different pros and cons when it comes to real estate investing.
Take, for instance, South Bend in Indiana. According to Mashvisor’s data, Airbnb South Bend Indiana offers investors a whopping 6.91% cash on cash return compared to the 0.22% they will make if they decide to go with a traditional rental strategy.
Mashvisor gives investors access to real estate investment tools that allow them to perform Airbnb analysis for a wide range of properties in almost every market across the US. The website even lets its users perform neighborhood analysis, which is helpful, especially for bigger markets like Los Angeles or New York.
Using Mashvisor’s Real Estate Heatmap, users can streamline their choices by zooming in on the hottest neighborhoods with properties that match their criteria.
Use Mashvisor’s real estate heatmap tool to find properties that offer lucrative cash on cash returns.
Airbnb Investment Property Analysis
After finding a good neighborhood or two, investors can search for a few good options from Mashvisor’s massive database. The database is updated regularly and provides a very high level of accuracy for traditional rental, vacation rental, and off-market properties.
Investors can check out the different Airbnb properties for sale using the site’s search engine. Users are given a quick overview of the properties and how profitable they are based on cash on cash return estimates. Mashvisor offers its own Airbnb profit calculator, which allows both new and existing users to calculate a property’s profitability. Crunching the numbers is made a lot easier with its Airbnb calculator. The website will then take the data for both traditional and vacation rental properties and compare them side by side so users know which rental strategy to go with.
Let’s take Airbnb South Bend again, for example. According to Mashvisor, South Bend vacation rental properties offer investors a 6.91% Airbnb cash on cash return at a 49% occupancy rate. Compared to the 0.22% traditional cash on cash return, investors already got a pretty good idea of which rental strategy offers the better Airbnb profit potential.
Airbnb Rental Comps
Merely owning a vacation rental home cannot answer the question, “is Airbnb profitable or not?” Some major homework needs to be done by prospective Airbnb owners. While performing Airbnb analysis using an accurate database is quite helpful, taking into account the performance of similar rental properties in the area brings up the accuracy of the research.
Airbnb sales and rental comps are used for this exact purpose. Mashvisor users are given access to this information for a more detailed comparative analysis. Investors will know if their chosen property is a good deal compared to the price that other similar properties are sold for in a particular neighborhood. They can also compare their choice’s profitability with another rental property with similar characteristics by checking out its daily rate, occupancy rate, and rental income.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Mashvisor’s Airbnb Data by City
The most important question next to “is Airbnb profitable” is, “Where do I buy the right investment property for Airbnb hosting?” Investors mainly look at three things to determine Airbnb profitability: cash on cash returns, monthly rental income, and daily rates. Using Mashvisor’s updated data, we have listed some of the best Airbnb locations and divided them into these three categories.
Disclaimer: The locations listed below are limited to markets with less than $1,000,000 median property prices.
Top 10 Locations With the Highest Cash on Cash Returns
Cash on cash return is a way to measure your rate of return by calculating the cash income you earned on the cash that you invested in a property. Airbnb properties can generate as high as 8% or higher returns depending on several factors, such as the location, property type, and seasonality.
1. Fairbanks, AK
- Median Property Price: $298,846
- Average Price per Square Foot: $190
- Days on Market: 114
- Number of Airbnb Listings: 206
- Airbnb Daily Rate: $129
- Airbnb Occupancy Rate: 73%
- Airbnb Rental Income: $3,347
- Airbnb Cash on Cash Return: 8.46%
- Walk Score: 22
2. Saugerties, NY
- Median Property Price: $375,713
- Average Price per Square Foot: $230
- Days on Market: 196
- Number of Airbnb Listings: 217
- Airbnb Daily Rate: $300
- Airbnb Occupancy Rate: 67%
- Airbnb Rental Income: $4,825
- Airbnb Cash on Cash Return: 7.82%
- Walk Score: 80
3. Cle Elum, WA
- Median Property Price: $729,000
- Average Price per Square Foot: $316
- Days on Market: 26
- Number of Airbnb Listings: 193
- Airbnb Daily Rate: $575
- Airbnb Occupancy Rate: 50%
- Airbnb Rental Income: $7,756
- Airbnb Cash on Cash Return: 7.81%
- Walk Score: 57
4. Bushkill, PA
- Median Property Price: $354,438
- Average Price per Square Foot: $162
- Days on Market: 64
- Number of Airbnb Listings: 101
- Airbnb Daily Rate: $328
- Airbnb Occupancy Rate: 53%
- Airbnb Rental Income: $4,406
- Airbnb Cash on Cash Return: 7.77%
- Walk Score: 0
5. Galena, IL
- Median Property Price: $432,700
- Average Price per Square Foot: $240
- Days on Market: 78
- Number of Airbnb Listings: 221
- Airbnb Daily Rate: $269
- Airbnb Occupancy Rate: 65%
- Airbnb Rental Income: $4,544
- Airbnb Cash on Cash Return: 7.56%
- Walk Score: 76
6. Berkeley Springs, WV
- Median Property Price: $427,338
- Average Price per Square Foot: $210
- Days on Market: 89
- Number of Airbnb Listings: 134
- Airbnb Daily Rate: $215
- Airbnb Occupancy Rate: 72%
- Airbnb Rental Income: $4,164
- Airbnb Cash on Cash Return: 7.40%
- Walk Score: 5
7. McGaheysville, VA
- Median Property Price: $480,363
- Average Price per Square Foot: $207
- Days on Market: 35
- Number of Airbnb Listings: 138
- Airbnb Daily Rate: $356
- Airbnb Occupancy Rate: 57%
- Airbnb Rental Income: $5,115
- Airbnb Cash on Cash Return: 7.33%
- Walk Score: 29
8. Twentynine Palms, CA
- Median Property Price: $330,830
- Average Price per Square Foot: $260
- Days on Market: 62
- Number of Airbnb Listings: 203
- Airbnb Daily Rate: $190
- Airbnb Occupancy Rate: 63%
- Airbnb Rental Income: $3,347
- Airbnb Cash on Cash Return: 7.12%
- Walk Score: 54
9. Temecula, CA
- Median Property Price: $761,647
- Average Price per Square Foot: $360
- Days on Market: 44
- Number of Airbnb Listings: 287
- Airbnb Daily Rate: $448
- Airbnb Occupancy Rate: 64%
- Airbnb Rental Income: $7,379
- Airbnb Cash on Cash Return: 7.03%
- Walk Score: 28
10. Tobyhanna, PA
- Median Property Price: $291,200
- Average Price per Square Foot: $170
- Days on Market: 41
- Number of Airbnb Listings: 257
- Airbnb Daily Rate: $290
- Airbnb Occupancy Rate: 50%
- Airbnb Rental Income: $3,468
- Airbnb Cash on Cash Return: 6.99%
- Walk Score: 25
Related: Where Is Airbnb Hosting Profitable in the 2022 US Housing Market?
Top 10 Locations With the Highest Monthly Rental Income
The monthly rental income mentioned in each area is based on the median monthly earnings of verified and active Airbnb properties. Note that just because a property is providing as high as $7,000 in member’s Airbnb profits does not mean they are also generating the highest returns. Hence, it’s important to consider other metrics when evaluating an Airbnb property.
1. Cle Elum, WA
- Median Property Price: $729,000
- Average Price per Square Foot: $316
- Days on Market: 26
- Number of Airbnb Listings: 193
- Airbnb Daily Rate: $575
- Airbnb Occupancy Rate: 50%
- Airbnb Rental Income: $7,756
- Airbnb Cash on Cash Return: 7.81%
- Walk Score: 57
2. Temecula, CA
- Median Property Price: $761,647
- Average Price per Square Foot: $360
- Days on Market: 44
- Number of Airbnb Listings: 287
- Airbnb Daily Rate: $448
- Airbnb Occupancy Rate: 64%
- Airbnb Rental Income: $7,379
- Airbnb Cash on Cash Return: 7.03%
- Walk Score: 28
3. Atascadero, CA
- Median Property Price: $791,737
- Average Price per Square Foot: $473
- Days on Market: 35
- Number of Airbnb Listings: 108
- Airbnb Daily Rate: $293
- Airbnb Occupancy Rate: 65%
- Airbnb Rental Income: $7,019
- Airbnb Cash on Cash Return: 6.55%
- Walk Score: 68
4. Oakhurst, NJ
- Median Property Price: $896,695
- Average Price per Square Foot: $440
- Days on Market: 142
- Number of Airbnb Listings: 118
- Airbnb Daily Rate: $399
- Airbnb Occupancy Rate: 54%
- Airbnb Rental Income: $6,887
- Airbnb Cash on Cash Return: 4.58%
- Walk Score: 17
5. Middletown, RI
- Median Property Price: $674,667
- Average Price per Square Foot: $352
- Days on Market: 70
- Number of Airbnb Listings: 177
- Airbnb Daily Rate: $424
- Airbnb Occupancy Rate: 57%
- Airbnb Rental Income: $6,683
- Airbnb Cash on Cash Return: 6.46%
- Walk Score: 50
6. Koloa, HI
- Median Property Price: $871,996
- Average Price per Square Foot: $793
- Days on Market: 118
- Number of Airbnb Listings: 366
- Airbnb Daily Rate: $342
- Airbnb Occupancy Rate: 76%
- Airbnb Rental Income: $6,662
- Airbnb Cash on Cash Return: 5.02%
- Walk Score: 42
7. Annapolis, MD
- Median Property Price: $784,500
- Average Price per Square Foot: $322
- Days on Market: 96
- Number of Airbnb Listings: 238
- Airbnb Daily Rate: $322
- Airbnb Occupancy Rate: 67%
- Airbnb Rental Income: $6,592
- Airbnb Cash on Cash Return: 6.05%
- Walk Score: 83
8. Escondido, CA
- Median Property Price: $894,240
- Average Price per Square Foot: $476
- Days on Market: 40
- Number of Airbnb Listings: 109
- Airbnb Daily Rate: $438
- Airbnb Occupancy Rate: 63%
- Airbnb Rental Income: $6,460
- Airbnb Cash on Cash Return: 4.81%
- Walk Score: 42
9. Oceanside, CA
- Median Property Price: $821,988
- Average Price per Square Foot: $593
- Days on Market: 42
- Number of Airbnb Listings: 418
- Airbnb Daily Rate: $231
- Airbnb Occupancy Rate: 71%
- Airbnb Rental Income: $6,268
- Airbnb Cash on Cash Return: 5.23%
- Walk Score: 35
10. Broken Bow, OK
- Median Property Price: $791,333
- Average Price per Square Foot: $457
- Days on Market: 101
- Number of Airbnb Listings: 678
- Airbnb Daily Rate: $330
- Airbnb Occupancy Rate: 70%
- Airbnb Rental Income: $6,254
- Airbnb Cash on Cash Return: 4.98%
- Walk Score: 64
Top 10 Locations With the Highest Daily Rates
Like the monthly rental income, the daily rates mentioned in each location below are based on the median daily rates that verified and active Airbnb listings charged their guests. But just because an Airbnb property charges high daily rates does not mean it would generate high income or returns. You also need to consider the demand and occupancy rate in the area.
1. Cle Elum, WA
- Median Property Price: $729,000
- Average Price per Square Foot: $316
- Days on Market: 26
- Number of Airbnb Listings: 193
- Airbnb Daily Rate: $575
- Airbnb Occupancy Rate: 50%
- Airbnb Rental Income: $7,756
- Airbnb Cash on Cash Return: 7.81%
- Walk Score: 57
2. Point Pleasant Beach, NJ
- Median Property Price: $779,733
- Average Price per Square Foot: $615
- Days on Market: 99
- Number of Airbnb Listings: 123
- Airbnb Daily Rate: $533
- Airbnb Occupancy Rate: 42%
- Airbnb Rental Income: $4,498
- Airbnb Cash on Cash Return: 3.02%
- Walk Score: 85
3. Hunter, NY
- Median Property Price: $581,810
- Average Price per Square Foot: $309
- Days on Market: 113
- Number of Airbnb Listings: 197
- Airbnb Daily Rate: $528
- Airbnb Occupancy Rate: 41%
- Airbnb Rental Income: $3,550
- Airbnb Cash on Cash Return: 2.49%
- Walk Score: 24
4. Blacksburg, VA
- Median Property Price: $664,353
- Average Price per Square Foot: $309
- Days on Market: 157
- Number of Airbnb Listings: 151
- Airbnb Daily Rate: $485
- Airbnb Occupancy Rate: 43%
- Airbnb Rental Income: $4,049
- Airbnb Cash on Cash Return: 4.37%
- Walk Score: 27
5. Kingsland, TX
- Median Property Price: $838,048
- Average Price per Square Foot: $401
- Days on Market: 29
- Number of Airbnb Listings: 153
- Airbnb Daily Rate: $474
- Airbnb Occupancy Rate: 35%
- Airbnb Rental Income: $3,977
- Airbnb Cash on Cash Return: 1.77%
- Walk Score: 48
6. Swanton, MD
- Median Property Price: $881,486
- Average Price per Square Foot: $432
- Days on Market: 97
- Number of Airbnb Listings: 108
- Airbnb Daily Rate: $449
- Airbnb Occupancy Rate: 45%
- Airbnb Rental Income: $3,232
- Airbnb Cash on Cash Return: 2.24%
- Walk Score: 10
7. Temecula, CA
- Median Property Price: $761,647
- Average Price per Square Foot: $360
- Days on Market: 44
- Number of Airbnb Listings: 287
- Airbnb Daily Rate: $448
- Airbnb Occupancy Rate: 64%
- Airbnb Rental Income: $7,379
- Airbnb Cash on Cash Return: 7.03%
- Walk Score: 28
8. Indio, CA
- Median Property Price: $580,390
- Average Price per Square Foot: $291
- Days on Market: 90
- Number of Airbnb Listings: 390
- Airbnb Daily Rate: $446
- Airbnb Occupancy Rate: 52%
- Airbnb Rental Income: $4,301
- Airbnb Cash on Cash Return: 4.43%
- Walk Score: 69
9. Escondido, CA
- Median Property Price: $894,240
- Average Price per Square Foot: $476
- Days on Market: 40
- Number of Airbnb Listings: 109
- Airbnb Daily Rate: $438
- Airbnb Occupancy Rate: 63%
- Airbnb Rental Income: $6,460
- Airbnb Cash on Cash Return: 4.81%
- Walk Score: 42
10. Blakeslee, PA
- Median Property Price: $494,921
- Average Price per Square Foot: $317
- Days on Market: 77
- Number of Airbnb Listings: 110
- Airbnb Daily Rate: $431
- Airbnb Occupancy Rate: 42%
- Airbnb Rental Income: $3,584
- Airbnb Cash on Cash Return: 5.10%
- Walk Score: 30
Related: 50 Cities with the Highest Average Airbnb Daily Rate in 2022
If you take a closer look at all the different markets listed, you will notice that each of them is performing very well in all three categories. They’re all very affordable and have great potential to generate positive cash flow for investors. It is why it’s important for investors to always perform due diligence since each location has something different to offer.
The Verdict
So, is Airbnb profitable? If you have the right location and perform your due diligence, then yes, it is. Lucrative Airbnb profits will surely be well within your reach. With the help of a website like Mashvisor, real estate investors can find the most profitable Airbnb properties anywhere in the US.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo today.
