Thanks to Airbnb, a new type of real estate investing has been gaining prominence in the last few years. More and more real estate investors are putting their money in vacation home rentals instead of traditional rental properties. If you are thinking of becoming a vacation rentals owner, then you should definitely read this article.
Vacation home rentals are short term rental properties that are rented out for a period of less than 30 days. Becoming a vacation rentals owner can surely bring greater returns than owning traditional long term rentals. However, making money with an Airbnb rental property may also require more hands-on property management.
Related: What You Need to Know Before Buying an Airbnb Investment Property
When it comes to making money with Airbnb, the location of the investment property is the main factor that determines your return on investment. That’s why, when looking for vacation homes for sale, you should take into account whether the location attracts tourists and people looking for short term rentals.
Mashvisor’s Airbnb profit calculator is the ultimate tool to evaluate a short term investment property. You can easily compare the performance of a traditional vs Airbnb investment strategy using different real estate investment tools like cash on cash return, cap rate and most importantly, occupancy rate of an Airbnb investment. Mashvisor uses data analytics, which includes Airbnb analytics, to provide real estate investors with the most up to date real estate metrics.
Why Become a Vacation Rentals Owner?
1- The short term rentals market is growing
Statistics forecast that the vacation home rentals market is expected to grow 7.9% annually. Vacationers are becoming increasingly comfortable with the idea of staying in an Airbnb rental as it offers several advantages when compared to traditional hotels. What are you waiting for? Now is the time to become a vacation rentals owner to take advantage of this impressive growth.
2- Make more money with vacation home rentals
Under the right circumstances, short term rentals can bring more money than long term rentals. Despite that, long term rentals have higher occupancy rates and lower turnover rates. But as a vacation rentals owner, you can charge much higher by pricing the short term rental by night of occupancy rather than per month. The trick here is to learn how to make the most out of your Airbnb rental property.
Do you want to learn how to make money with Airbnb in a few steps? Check out this article.
3- Airbnb makes it easier to find renters
Making money with Airbnb has never been easier. The online booking platform allows travelers to browse and filter through all types of properties. As a real estate investor, switching to Airbnb host allows you to effectively manage your short term rental by choosing which dates it is available and keeping track of your rental history.
4- Use the property as a vacation home for yourself
Become a vacation rentals owner to mix business and pleasure. Even if you are mainly using the property for rental income, this doesn’t mean you can’t enjoy it yourself from time to time.
Airbnb Trends
Before considering becoming a vacation rentals owner, you should have a look at the local regulations for short term rentals. As Airbnb gains more popularity among vacationers and real estate investors, many cities are regulating short term rentals.
Related: Which Are the US Cities with the Least Airbnb Legal Issues at the Beginning of 2018?
The following cities are the best locations in the US housing market to become a vacation rentals owner. These cities deserved their place on the list thanks to their high Airbnb cash on cash return and Airbnb cap rate – two important real estate metrics that you should look at when looking for vacation homes for sale.
1- Abilene, TX
Airbnb CoC return: 9.41%
Airbnb Cap rate: 9.41%
Occupancy rate: 50.36%
Airbnb rental income: $3,248
2- Dayton, OH
Airbnb CoC return: 9.21%
Airbnb Cap rate: 9.21%
Occupancy rate: 61.37%
Airbnb rental income: $1,887
3- Portsmouth, VA
Airbnb CoC return: 9.03%
Airbnb Cap rate: 9.03%
Occupancy rate: 57.89%
Airbnb rental income: $2,510
4- Dubuque, IA
Airbnb CoC return: 8.98%
Airbnb Cap rate: 8.98%
Occupancy rate: 38%
Airbnb rental income: $2,525
5- Lansing, MI
Airbnb CoC return: 8.66%
Airbnb Cap rate: 8.66%
Occupancy rate: 53.5%
Airbnb rental income: $2,556
6- Akron, OH
Airbnb CoC return: 8.56%
Airbnb Cap rate: 8.56%
Occupancy rate: 54.56%
Airbnb rental income: $1,883
7- Columbus, GA
Airbnb CoC return: 8.39%
Airbnb Cap rate: 8.39%
Occupancy rate: 48.77%
Airbnb rental income: $2,247
Note: Columbus is moving towards regulating Airbnb rentals. The newly proposed rules require landlords to purchase an annual business license, have proper insurance, and install smoke detectors and fire extinguishers
8- Jonesboro, AR
Airbnb CoC return: 8.27%
Airbnb Cap rate: 8.27%
Occupancy rate: 54%
Airbnb rental income $2,159
9- Montgomery, AL
Airbnb CoC return: 8.03%
Airbnb Cap rate: 8.03%
Occupancy rate: 59.66%
Airbnb rental income: $2,215
10- Beaufort, SC
Airbnb CoC return: 7.67%
Airbnb Cap rate: 7.67%
Occupancy rate: 58.19%
Airbnb rental income: $3,534
11- Hampton, VA
Airbnb CoC return: 7.67%
Airbnb Cap rate: 7.67%
Occupancy rate: 46.88%
Airbnb rental income: $2,758
12- Goshen, IN
Airbnb CoC return: 7.48%
Airbnb Cap rate: 7.48%
Occupancy rate: 68.4%
Airbnb rental income: $2,496
13- Dearborn, MI
Airbnb CoC return: 7.48%
Airbnb Cap rate: 7.48%
Occupancy rate: 59.4%
Airbnb rental income: $2,469
14- Tuscaloosa, AL
Airbnb CoC return: 7.45%
Airbnb Cap rate: 7.45%
Occupancy rate: 42.15%
Airbnb rental income: $2,150
15- Kalamazoo, MI
Airbnb CoC return: 7.31%
Airbnb Cap rate: 7.31%
Occupancy rate: 57.22%
Airbnb rental income: $2,759
The Bottom Line
By looking at US housing trends, it is definitely worth it to become a vacation rentals owner. However, we highly advise you to check the local short term rentals regulations before investing in vacation homes. Use Mashvisor to find the best short term rental properties for sale anywhere in the US.
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