Airbnb rentals have gained popularity over the past few years, providing an alternative to hotels for travelers. This popularity unlocked an opportunity for investors to profit on the growing market for short-term rentals. However, not all locations are created equal for short-term rentals. Continue reading for more information on the three best and worst cities for Airbnb rentals.
When it comes to short-term rentals, it’s all about the location. Some cities are great at generating profits from short-term rentals, while others fall short—several factors impact which cities garner the most profits regarding Airbnb rentals.
If a city doesn’t have many hotel rooms, that usually drives up Airbnb prices. In cities with plenty of affordable hotel options, investors have to keep their rates low to compete. Housing costs also play a big factor in the equation. Areas where investors can buy properties for cheap, with a steady tourism demand, can garner impressive profits.
The Best Cities for Airbnb Rentals
The city of Slade is at the top of the up-and-coming markets. Slade, Kentucky has an Airdna investor score of 96.6 and an annual revenue potential of $39, 124. Other important scores from Airdna include a 92 in rental demand, a 95 in revenue growth, and a 100 in investability.
St. John, U.S. Virgin Islands
When it comes to mid-sized markets, the top spot goes to St. John, U.S. Virgin Islands. With an Airdna score of 93 and an annual revenue potential of $95,030, it’s no wonder why this city claims the top spot in the mid-sized markets category. Its rental demand is 96, while its revenue growth score is 76. It also has an excellent investability rating of 100.
Palm Springs, California
Palm Springs, California, dominates the market for large cities. It has an Airdna investor score of 89.7 and an annual revenue potential of $64,571. Its revenue growth score is 99. It has a lower rental demand than the other top cities listed above, coming in at 60. Its rental demand is made up for by its investability score of 100.
The Worst Cities for Airbnb Rentals
The top three worst cities for Airbnb rentals are Savannah, Georgia, Sedona, Arizona, and Miramar Beach. Florida.
Savannah, Georgia, is troubled by its lack of rental demand, while Sedona’s investability score is what hurts it the most. Some of the best places in terms of revenue potential are hampered by home prices. The opposite is the case for Miramar Beach, Florida. Miramar Beach mostly lacks rental demand and revenue growth, although it has a high investability rating.
Airbnb Rentals Done Right
While some cities might seem like great tourist destinations, their high home prices may put a damper on investors’ plans. Some of the best cities to invest in are cities that fly under the radar. Las Vegas has plenty of hotel options, but its affordability can still make it a viable option. You should also figure out the cost of managing the short-term rental if you don’t plan to live at the property yourself.
Majestic Vacation Management prides itself on being one of the best short-term rental management companies in Las Vegas. We handle all aspects of vacation rentals, from location consulting and home staging to linen services, cleaning, security, etc. Contact us today for all your Airbnb management needs.