Airbnb property investment continues to skyrocket in popularity. Are there still profitable cities in which to start your own short-term rental properties today?
The best cities for Airbnb may surprise you as you begin to research expanding your investment portfolio. While popular tourist destinations like Florida remain on the list, cities with less obvious tourist appeal are also considered some of the best places for Airbnb investment.
Do you know how to consider which cities are the best places for Airbnb investing for your specific business portfolio? Learning about short-term rentals is different from traditional property management. Getting the right foundational knowledge to succeed with this new venture is important.
Today, follow along in our complete guide to the best Airbnb cities for your investment portfolio.
A Table Of Contents On The Best Cities For Airbnb
Ready to expand your investment portfolio to include Airbnb investment properties? Here’s what you need to know about the best Airbnb cities:
- The Best Cities For Airbnb Investing
- How To Add The Best Cities For Airbnb Investing To Your Portfolio
- FAQs On The Best Airbnb Cities
- The Best Places For Airbnb Investment For Your Portfolio
The Best Cities For Airbnb Investing
What are some of the best cities for Airbnb investors to look at right now?
This isn’t an exhaustive list, but it does include some of the most interesting (and profitable) areas where Airbnb investors are excited about future growth. Find out if any of these locations will suit your business plans.
#1: The Poconos, Pennsylvania
The Poconos is a popular retreat destination for people living in Pennsylvania, New York, Maryland, West Virginia, Washington D.C., New Jersey, and other nearby states. Due to its proximity to these various states, the occupancy rates in the Poconos are relatively high year-round.
In particular, December sees very high daily rental rates, often soaring over $500. This leaves room for big profits if you have the right property and location. Entire home rentals are popular with families, wedding parties, and friends looking for somewhere peaceful. More significant properties demand higher prices and bigger profits.
The average monthly revenue for short-term rental owners in the Poconos is between $5,000 and $6,000.
#2: San Francisco, California
If you want to invest in a city with high occupancy rates, look no further than San Francisco. Throughout the summer, occupancy rates are typically over 90%, and rates don’t usually drop below 60% during the off-peak season. This means you can profit year-round, with increased profits and daily average rates during peak periods.
It’s worth noting that upfront investment costs can be high depending on the location, especially if you want to do full-house rentals. One-bedroom rentals are also very popular, so they can be an option for investors with more limited budgets.
#3: Branson, Missouri
The Midwest has increasingly popular tourist destinations that are growing hotspots on Airbnb. One such place is Branson, Missouri. This family-friendly vacation destination offers live music, outdoor recreation, history experiences, great food, and much more.
Visitors voted Branson one of the best destinations in 2021, showcasing that its popularity is just getting started. Most visitors to Branson drive as it is incredibly accessible to many midwestern states.
The occupancy rate during peak season in Branson is over 80%, with an average monthly revenue of over $4,000.
#4: Bend, Oregon
Bend is a beautiful area known for outdoor recreation, mountain views, and a fabulous glass of beer. With such activities to pursue, more than 4 million visitors come to this area of Oregon each year to experience everything the Cascades have to offer.
More than 80% of summer visitors to Bend stay overnight, meaning there is high demand for short-term rentals. Most visitors stayed for at least four nights, regardless of the season. This shows positive potential for occupancy rates year-round.
The average monthly revenue for Airbnb investors in Bend is over $6,000 during peak season, with occupancy rates soaring over 90%. The majority of short-term rentals in this region are entire home rentals.
#5: Miami, Florida
It’s probably no surprise that the second largest city in Florida, Miami, makes the list as one of the best cities for Airbnb investing. Offering ocean activities, a festive lifestyle, sunshine, and so much more, investors are drawn to Miami for good reason when researching short-term rental options.
Occupancy rates in Miami are over 50% year-round, with peak season rates reaching nearly 90%. This paves the way for investors to make between $4,000 and $6,000 monthly, depending on their rental rates.
#6: Fairbanks, Alaska
Massive demand for short-term rental places in Fairbanks makes investors consider Alaska their next frontier. Vacationers flock to this region to explore national parks, see the Northern Lights, and partake in other experiences that aren’t found in many other areas.
The average daily rates in Fairbanks on short-term rentals are just under $200, with an average annual occupancy rate of around 60%. Investors with suitable properties and locations stand to make significant profits in Fairbanks for years to come.
#7: Ellsworth, Maine
The last city on our list of the best cities for Airbnb investing is in the great state of Maine. Ellsworth, Maine, is located very close to the entrance of Acadia National Park. This park draws in millions of visitors annually, and many choose to stay in Ellsworth.
The high investment cost in other cities nearby is too risky for most Airbnb investors. Instead, turning to the more affordable and still convenient Ellsworth makes more sense. It’s a wise choice when you can still achieve occupancy rates over 70% and daily average rental rates over $230. Profitability is highest from May to October as tourism soars for the peak season.
How To Add The Best Cities For Airbnb Investing To Your Portfolio
The top seven cities listed above are some of the best places for Airbnb investment right now, but does that mean they’re the proper cities for you to purchase a short-term rental property?
Ultimately, that depends on your situation. No single city is a one-size-fits-all solution when it comes to Airbnb investing. There will always be external factors that influence where your best investment options are located. It’s up to you to research this, but these tips will help along the way.
#1: Choose The “Best” City For Your Portfolio
If you want to invest in one of the cities listed above, ensure you don’t look only at the occupancy and potential profit numbers we shared. Instead, look at it through your portfolio’s lens.
Which city has affordable properties? Which city boasts properties that fit your expertise? Which city has reasonable short-term rental regulations that won’t prevent your business from thriving?
The investment potential of short-term rentals in any city varies from investor to investor. Too much competition feels detrimental to some, while high demand levels can help others flourish. It’s important to consider what makes the most sense for your personal portfolio.
#2: What To Research For Specific Cities
Anytime you’re considering investing in a short-term rental in a particular city, research the following information about that city before proceeding:
- Occupancy rate: What is the percentage of occupied rooms in the region during peak season, off-peak season, and on average?
- Average daily rate: What are other investors charging, on average, for similar short-term rentals?
- Regulations: Are there any local rules or regulations on short-term rentals that will affect your risk levels?
- Property taxes: Are high property taxes a concern for your profitability?
#3: Choose The Right Location
Simply buying an investment property in one of the best cities for Airbnb isn’t enough to find success. You must also ensure the property is in a desirable, profitable location.
The ideal short-term rental property includes the following:
- Easy access to highways and/or public transportation
- Attractive, local tourist activities
- Area attractions including great restaurants, bars, and parks
- Low crime rates
- Easy parking options for guests driving into town
#4: Learn About Excelling In Airbnb Investing
If you’re an experienced landlord expanding into Airbnb property management, you already know a lot about how to maintain and upkeep properties. Some aspects of landlord and investment property management overlap, but there are also some important differences.
Here at RentPrep, our tenant screening packages are primarily used by landlords to choose the best tenant for their rental properties. However, we also want to help you manage your investments. Our blog regularly includes updates focused on Airbnb property management. Stay up-to-date with the latest advice by signing up for our newsletter today.
FAQs On The Best Airbnb Cities
What else is there to know about investing in short-term rental properties? Keep reading to learn more.
What is the most profitable city for Airbnb investors?
The most profitable city for Airbnb investors isn’t simple to define due to the wide variety of factors that come into play, including investment costs, occupancy rates, interest rates, and so much more.
Nashville, Indiana, was listed as one of the most profitable cities in recent years, as the startup costs are low, but the average daily short-term rental rates are relatively high at over $250.
Overall, the most profitable cities are those with incoming visitors and tourism year-round. Additionally, tourist destinations with limited numbers of hotels and rental properties boast higher demand and, consequently, higher profits.
If you’re interested in discovering the most profitable cities on Airbnb in your state, check out this complete state-by-state list.
Where is the highest demand for Airbnb?
Judging demand for Airbnb properties by occupancy rates in each city, the most in-demand cities on Airbnb are as follows:
- New York City, NY
- Los Angeles, CA
- Kissimmee, FL
- Atlanta, GA
- Houston, TX
- Las Vegas, NV
- Austin, TX
- San Diego, CA
- Miami, FL
- Washington, DC
- Philadelphia, PA
- Chicago, IL
- Davenport, FL
- Orlando, FL
- Dallas, TX
- Panama City Beach, Florida
- Seattle, WA
- San Francisco, California
- Nashville, TN
- Paradise, NV
Remember, the best cities for new Airbnb investment aren’t necessarily those with the highest demand. Investment requires a balance of risk and reward, so keep this in mind as you research your options.
Is Airbnb still profitable?
While investors often worry that Airbnb investing has passed its peak, investing in short-term rental properties is still incredibly profitable. Gradually lowering house prices also offers room for more significant profits. Acquiring properties is getting more affordable and this can lead to stronger profit margins down the line.
What percentage of income does Airbnb take?
The final fee charged to hosts by Airbnb depends on your property’s location and which plan you follow. You can expect fees to range from 3% to 15%. If you are renting properties in North America, you will be subject to a 3% fee of the total booking cost, and guests will pay between 5% and 20% to cover reservation-specific costs.
What makes a good location for Airbnb?
The biggest thing you should look for when choosing an Airbnb location is proximity to attractions. Consider why people visit this city. Is it to go to the museums, to visit large convention centers, or for outdoor recreation? Regardless of the answer, ensure that your short-term rental properties are conveniently located in regard to any and all popular attractions.
The Best Places For Airbnb Investment For Your Portfolio
Today, we’ve covered the top Airbnb cities for investment opportunities. Remember, that doesn’t mean these cities will be the best opportunities for you. Every individual investor has their own budget, location, goals, and portfolio to consider. Review the following when determining the best cities for Airbnb properties for your business:
- Budget: What is the expected cost of your ideal property type?
- Location: Can your budget afford properties in the ideal areas of town?
- Occupancy: What occupancy rate will you need to be profitable, and is it achievable in this city?
- Regulations: Will changing regulations on short-term rentals make it difficult or impossible to continue property investment in this area?
Specialize your portfolio to suit your business goals and personal strengths. Trying to replicate someone else’s success by following their steps exactly isn’t practical. Instead, learn from their reasons for taking each step and apply them to your decision-making. With this process, you’ll be ready to invest in the best Airbnb cities in no time.