Is Airbnb Atlanta a Risky Investment in 2023?

Investing in Airbnb Atlanta rental properties has historically been a lucrative real estate strategy, but will this be the case in 2023?

After the emergence of the Airbnb, Vrbo, and Booking.com platforms, Atlanta became one of the top locations for short term rental investment in the US. The large number of tourists driven by the rich history and culture was the main driver behind this trend. However, the Covid-19 pandemic had a major impact on the vacation rental market leading to significant geographical reshuffles.

Table of Contents

1. Atlanta Real Estate Market Trends in 2023
2. Is Airbnb Atlanta a Good or Risky Investment in 2023?
3. Atlanta Short Term Rental Regulations
4. Top 4 Neighborhoods for Airbnb Atlanta Investments in 2023
5. How to Find Top-Rated Vacation Rentals in Atlanta
6. How to Boost the Performance of Your Airbnb Atlanta Property

In this article, we’ll look at the trends in the Atlanta short term rental market and consider the factors determining whether it is still a good location for this investment strategy or too risky. We’ll review the Atlanta Airbnb laws to check if they are friendly to Airbnb hosts and owners since you should avoid markets where non-owner-occupied short term rentals are not allowed.

We’ll rank the top four Atlanta neighborhoods for buying a vacation rental property in 2023, based on Mashvisor Airbnb data analysis. We’ll walk you through the process of starting and retaining a profitable Airbnb business in Atlanta. Lastly, we’ll show you how the Mashvisor tools can help you along your journey.

Atlanta Real Estate Market Trends in 2023

Before we dive into the Atlanta vacation rental market, let’s look at the overall real estate market state and trends in the city. This will help us determine if 2023 is a good time to invest in Atlanta real estate properties.

Atlanta Real Estate Market Data 2023

Following are the main real estate data points for the Atlanta market based on Mashvisor analysis conducted in April 2023:

• Number of Listings for Sale: 3,648
• Median Property Price: $559,022
• Average Price per Square Foot: $1,709
• Days on Market: 73
• Number of Long Term Rental Listings: 2,778
• Monthly Long Term Rental Income: $2,290
• Long Term Rental Cash on Cash Return: 3.11%
• Long Term Rental Cap Rate: 3.17%
• Price to Rent Ratio: 20
• Number of Airbnb Listings: 6,705
• Monthly Airbnb Rental Income: $1,637
• Airbnb Cash on Cash Return: -0.09%
• Airbnb Cap Rate: -0.09%
• Airbnb Daily Rate: $165
• Airbnb Occupancy Rate: 34%
• Walk Score: 43

There are a couple of important trends that emerge from this data that aspiring Atlanta Airbnb hosts need to consider.

Affordable Real Estate Prices

First, Atlanta offers affordable properties compared to other best short term rental markets. In the last couple of years, prices in the US housing market have gone up significantly as a result of the global pandemic and the subsequent economic and financial developments. This is also true for Atlanta. However, prices here remain reasonable for a major city.

The median property price of $559,022, calculated by Mashvisor, exceeds the national median level by 67%, as reported by Zillow. It is not a lot since the national median value covers the entire US market, including the smallest towns and villages where house prices tend to be low.

The relatively affordable property prices are among the leading factors that make Airbnb Atlanta a feasible and profitable choice in 2023. After all, the investment property price is present in all ROI formulas in real estate, including both the Airbnb cash on cash return and the Airbnb cap rate. The lower the home value, the higher the return hosts can generate.

Moreover, the level of property prices determines what type of investors can enter the market. For example, markets like New York, San Francisco, and Los Angeles are accessible only to experienced investors with sizable financial resources.

Meanwhile, a market like Atlanta, with a median property price of $559,022, allows the entry of even small-scale, beginner investors. They just need to find the best loans for investment property.

Strong Long-Term Appreciation

Another reason to consider investing in Airbnb Atlanta is that your income property will have the potential to make you a lot of money in the long term as well. It is because Atlanta’s real estate appreciation rate has exceeded the national average. The ability to increase your wealth through appreciation is a major benefit of real estate properties in general and short term rentals in specific.

According to NeighborhoodScout data, the total appreciation in the Atlanta housing market was 159.36% between 2000 and 2022, resulting in an average annual rate of 4.23%. This is significantly more than both the Georgia and the US averages. It indicates that buying an Atlanta vacation rental property will help you make more money in the long run than investing in many other markets.

Seller’s Market

A third trend that is important to note is the fact that Atlanta will remain a seller’s market in 2023. Although it’s less hot than it used to be in the last couple of years, it’s early to talk about a neutral or a buyer’s market in A-Town. It is a potential risk to consider.

Still, it’s possible to find good investment opportunities as long as investors use the right tools. The 3,648 active listings for sale highlighted in the Mashvisor data above mean that Airbnb investors have options to choose from.

Nevertheless, they need to have financing figured out and be ready to move forward with a purchase as soon as they find a good deal. Otherwise, they might lose it to other savvy investors.

Is Airbnb Atlanta a Good or Risky Investment in 2023?

We’ve seen that Atlanta is a good place to invest in real estate, in general, this year, but this doesn’t mean that it is a top location for short term rentals. In this section, we’ll focus on the factors that point in the direction that Atlanta might have remained an excellent vacation rental investment destination. We’ll also take a look at the risks that investors need to consider before proceeding.

Why Investing in an Atlanta Airbnb Property Is Good in 2023

First, let’s start with the positives. There are many important factors at play that show that A-Town could still be a top location for short term rental property investments.

Popular Destination

In the past decade, Atlanta has attracted between 50 and 100 million visitors per year, depending on the specific year and the travel situation. These numbers make Atlanta one of the most visited cities across the US. So, if you’d like to invest in a short term rental that’s highly rated for location, A-Town is an excellent choice.

Some of the most popular tourist attractions in the capital of Georgia include the Georgia Aquarium, Atlanta Botanical Garden, World of Coca-Cola, Martin Luther King Jr. National Historic Site, and Zoo Atlanta. The rich history, the diverse cultural scene, and the exquisite cuisine contribute to the popularity of Atlanta among both domestic and foreign tourists.

After all, you can never go wrong when choosing one of the most popular tourist destinations for your vacation rental investments.

Expected Growth in the Short Term Rental Industry

The second factor in favor of investing in Airbnb Atlanta in 2023 is that experts expect the short term rental market to grow this year after the last Covid-19-related travel restrictions have dropped. Housing market predictions for 2023 show that vacation rentals will become even more popular and profitable across the country.

This means that we have all the reasons to think that Airbnb Atlanta properties will perform well this year, even if things might look a bit bleak at the moment. Airbnb daily rates, occupancy rate, rental income, and return on investment are all expected to improve.

Rental Flexibility

The third reason investors should not give up on investing in a vacation rental in Atlanta is the potential flexibility. If, for whatever reason, your short term rental property underperforms despite all the analysis and all your efforts, you can easily convert it into a long term rental. You can even make it a furnished rental as this category attracts a lot of interest and demand from traveling professionals.

So, the fact that you start an Airbnb business doesn’t mean that you have to continue with it. This flexibility is one of the best things about investing in real estate properties.

Why Investing in an Atlanta Vacation Rental Is Risky in 2023

In spite of the positive signals in favor of Atlanta short term rentals, there are some major risks that investors need to be aware of.

Return on Investment

When it comes to Atlanta rental market analysis, things do not look too great for Airbnb investments in 2023, in general. The Mashvisor short term rental data indicates a negative return on investment, which means that the average Atlanta Airbnb host is now losing money rather than making money. This is a major risk in real estate investing which should be taken seriously.

However, things look much more positive on the long term rental side of things. Long term Atlanta rental properties show a strong potential, with average cash on cash return and cap rate exceeding 3%. Although the recommended values are above 8%, investors should keep in mind that these are simply city averages, while individual properties are able to generate a much better return.

So, the rental market data shows that long term rentals are the less risky investment strategy in Atlanta in 2023.

If, on the other hand, you are keen on investing in Airbnb Atlanta, there are viable options. But you need to proceed with extra care, do a lot of Airbnb market research and analysis, and use all the best tools.

Occupancy Rates

Another important risk is the low Airbnb occupancy rate in Atlanta. According to Mashvisor data, the average occupancy is 34%, while the recommended value at the city level is 50% and more.

While there are thousands of active Airbnb listings in A-Town, they are not able to generate enough interest from visitors. This means that either supply is too much or demand is too little. In any case, the final result is that vacation rentals stay vacant.

Vacancy is one of the biggest risks in real estate, and it’s even more considerable with short term rentals. Unless you can bring guests to your property, you’ll be losing money as you’ll still be paying the mortgage and the recurring operating costs without getting any income. Both cash flow and ROI will be negative, which is the worst nightmare of any investor.

So, you can either consider investing in a long term rental property in Atlanta, or you can get started with an Airbnb and be ready to switch gears if things don’t work out well.

Atlanta Short Term Rental Regulations

When discussing the potential risks of investing in an Airbnb property for sale in any market, you should consider the vacation rental laws. It doesn’t make sense to buy an investment property for Airbnb or Vrbo in a city where non-owner-occupied short term rentals are illegal.

Is It Legal to Operate an Airbnb Atlanta Business?

The short answer is yes. It is legal to run an Airbnb business in Atlanta. However, the City Council approved a new law a couple of years ago that requires certain permits for short term rentals in Atlanta. What’s more, as a property owner, you will also have to take full responsibility for the behavior of your guests and even pay a fine if your guests misbehave. There’s also the matter of city hotel-motel tax.

This new law, passed in September 2021, requires hosts to get special operating permits from the Department of Planning and Community Development. There is a non-refundable fee of $150. The maximum number of permits is two: one for the primary address and one for another property.

Furthermore, the law states that it’s the host’s responsibility to ensure the best behavior of their guests so that they won’t affect the neighborhood in any negative way. If the guests violate the code in some manner, it will be up to the host to pay a fine of $500 for every violation. If your property gets three violations, you won’t be able to market it as an Airbnb rental for one whole year.

To add, in recent months, Atlanta has been discussing a new ordinance to further regulate short term rentals. Its goal is to protect its communities and residents. Thus, before buying a vacation rental property in Atlanta, hosts should check out the latest updates. The Mashvisor short term rental regulations page is a good place to start.

Top 4 Neighborhoods for Airbnb Atlanta Investments in 2023

One of the most important factors to buying a profitable vacation rental in Atlanta in 2023 is finding the right neighborhood. Within the same real estate market, different areas can yield very different results for investors and Airbnb hosts. So, even if Atlanta is not ideal for this strategy, some areas may be profitable.

We analyzed Atlanta Airbnb data from April 2023 to rank the four best areas for starting a vacation rental business this year. We focused on local markets with affordable property prices (below $1 million), numerous Airbnb active listings, and the highest average cash on cash return.

You should keep in mind that while the neighborhood-level ROI numbers don’t look impressive, these are just averages reflecting the performance of all Airbnb listings there. Meanwhile, it is possible to find properties that will outperform these averages by a lot as long as you follow the steps that we outline in the next section of this article.

So, the top four Atlanta neighborhoods for Airbnb investments this year are:

1. Vine City

• Median Property Price: $343,705
• Average Price per Square Foot: $234
• Days on Market: 89
• Number of Airbnb Listings: 1,492
• Monthly Airbnb Rental Income: $1,962
• Airbnb Cash on Cash Return: 2.66%
• Airbnb Cap Rate: 2.72%
• Airbnb Daily Rate: $158
• Airbnb Occupancy Rate: 35%
• Walk Score: 58

Vine City neighborhood has the highest cash on cash return in Atlanta considering its affordable property values.

2. Loring Heights

• Median Property Price: $716,300
• Average Price per Square Foot: $340
• Days on Market: 38
• Number of Airbnb Listings: 1,057
• Monthly Airbnb Rental Income: $4,051
• Airbnb Cash on Cash Return: 2.55%
• Airbnb Cap Rate: 2.57%
• Airbnb Daily Rate: $156
• Airbnb Occupancy Rate: 35%
• Walk Score: 51

Among all Atlanta neighborhoods, Loring Heights brings the best Airbnb income to date.

3. Oakland

• Median Property Price: $462,857
• Average Price per Square Foot: $380
• Days on Market: 31
• Number of Airbnb Listings: 1,641
• Monthly Airbnb Rental Income: $1,979
• Airbnb Cash on Cash Return: 1.28%
• Airbnb Cap Rate: 1.30%
• Airbnb Daily Rate: $160
• Airbnb Occupancy Rate: 38%
• Walk Score: 85

Oakland is the largest Airbnb Atlanta real estate market. It has the most active listings on the vacation rental platform now.

4. Piedmont Heights

• Median Property Price: $825,828
• Average Price per Square Foot: $948
• Days on Market: 26
• Number of Airbnb Listings: 918
• Monthly Airbnb Rental Income: $3,414
• Airbnb Cash on Cash Return: 1.17%
• Airbnb Cap Rate: 1.17%
• Airbnb Daily Rate: $155
• Airbnb Occupancy Rate: 33%
• Walk Score: 64

In 2023 Piedmont Heights allowed Atlanta Airbnb hosts to generate strong rental income.

How to Find Top-Rated Vacation Rentals in Atlanta

If you’re keen on investing in Airbnb Atlanta, Georgia, you should perform a comprehensive, multi-level Airbnb analysis. Next, we’ll walk you through the steps needed to locate profitable Airbnb opportunities in A-Town, even if the market doesn’t look great.

Here is how to start an Airbnb in Georgia in general and in Atlanta in specific:

Search for the Top Area for Airbnb Listings

The first step in investing in a top-performing short term rentals is finding the best local area. You need to look at access to tourist attractions, transportation, safety, and shopping and dining options. After all, Airbnb guests look for properties that are rated for location, cleanliness, and security.

The Mashvisor Market Finder can help you with your Atlanta Airbnb market search.

Use these filters to get a list of qualified Atlanta neighborhoods:

• Mashmeter score
• Crime and safety
• Home value
• Property type
• Monthly rental revenue
• Occupancy rate
• Cap rate

In a matter of seconds, you can locate the best areas for short term rentals for sale in Atlanta, based on reliable data obtained from the MLS and Airbnb.

To start your Atlanta Airbnb rental market search, sign up for a 7-day free trial of Mashvisor.

Identify Properties for Sale With Strong Short Term Rental Investment Potential

Once you know where to invest, the next step is to search for available properties for sale in this area. There are many different ways to find real estate listings, like newspapers, websites, agents, networking, driving for dollars, and more. However, most of these methods don’t focus on investment properties in specific. Instead, they target homebuyers.

To find the best vacation rentals for sale, you can use the Mashvisor Property Finder. It is an AI-driven tool that helps investors go through hundreds of thousands of active listings. It helps them find the best opportunities for their specific needs.

You need to enter the following criteria:

• Location
• Budget
• Type of property
• Number of bedrooms
• Number of bathrooms

The Property Finder tool will give you a list of all qualified properties for sale. The system will rank the list from the highest Airbnb cash on cash return to the lowest. This allows you to see the most profitable opportunities.

Analyze Available Listings in Detail

After identifying potential Airbnb Atlanta properties for sale, you should conduct a rental property analysis. While this step is always a must in any investment venture, it is crucial in a risky market like A-Town in 2023.

The Mashvisor Airbnb calculator can help you with this as well. The tool will analyze your selected properties and find rental comps. All data comes from Airbnb and goes through Mashvisor’s AI machine-learning algorithms.

The provided Airbnb analytics include:

• Property price
• Startup costs
• Financing method analysis
• Airbnb rental income
• Recurring monthly expenses
• Cash flow
• Airbnb occupancy rate
• Cash on cash return
• Cap rate

In this way, you can get an estimate of your ROI and revenue on a short term rental. It’s possible to find profitable vacation rentals despite the state of Airbnb in Atlanta.

Mashvisor also provides a comparison of each property’s performance as long term rentals, too. It helps investors lower the risk if they choose a property that can work as both a long term and short term rental.

With these three steps, you can find an excellent Atlanta vacation rental.

How to Boost the Performance of Your Airbnb Atlanta Property

While buying a property with solid potential is crucial, running a successful Airbnb business does not stop there. Once you own an Airbnb property, you need to continue optimizing its performance for the best possible results.

Here are the three top things you can do to maximize your ROI:

Dynamic Pricing

To attract more guests and boost your occupancy rate, you need to adopt dynamic Airbnb nightly pricing. This means you should adjust your daily rate to changes in local supply and demand. Listings with competitive rates rank higher in Airbnb search results. They also get more bookings. After all, no one wants to overpay for a vacation rental.

At the same time, the nightly rate should not be too low as you will leave money on the table.

Instead of conducting non-stop Airbnb market analysis, you can use the Mashvisor Dynamic Pricing tool. You can link your Airbnb listings and allow the real estate investment tool to adjust the daily rates in a way that will maximize rental income. It makes the Mashvisor tool superior to other alternatives on the market, which focus on increasing occupancy rather than revenue.

To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today and enjoy 15% off for life.

Generate Reviews

Another tip to improve the performance of your Atlanta Airbnb property is to actively work on getting a lot of positive reviews from guests. Guests agree that the overall rating of a listing is one of the most important factors that drive their booking decisions.

Thus, you need to ensure that everything in your property is always good and as advertised on the Airbnb platform. It will ensure that guests are happy and satisfied with their stay. Then, once they check out, you should follow up and ask them to write a review.

Optimize Everything About Your Airbnb Listing

Finally, you need to put effort into optimizing your Airbnb listing. This includes things like title, description, amenities, and additional information, as well as the above-mentioned factors – competitive pricing and 5-star reviews.

This will help your property show more often in the search results of guests looking for rentals in Atlanta, and it will make them book it more frequently.

Getting Started with Atlanta Short Term Rental Investments

As a real estate investor, you need to pay attention to market changes and fluctuations. 2023 seems riskier for Airbnb Atlanta investing than previous times, but that still doesn’t mean you can’t secure some rather lucrative short term rental properties if you know where to look. Fortunately, Mashvisor can help you with that.

With the Mashvisor tools, you can locate the best Atlanta neighborhood for Airbnb, find good properties, analyze expected performance, and even automate dynamic pricing post-purchase. In this way, you can make a profitable short term rental property investment even in the current climate.

To learn more about how Mashvisor can help you invest in an Airbnb Atlanta property, schedule a free demo with our team of experts.