One of the great things about investing in short term rentals is the fact that, if you play your cards right, you can strike the perfect balance between the Airbnb occupancy rate and the nightly rate and bring in tons of cash.
However, it’s not as simple as just listing your property for rent on Airbnb. A lot goes into deciding how much to charge for rent but it all ties into the Airbnb occupancy rate. And as real estate investors know, the occupancy rate depends a lot on the location of the investment property. So what kind of Airbnb occupancy rate can you expect in the US housing market?
Remember: The Airbnb occupancy rate for a city, neighborhood, or rental property is calculated by taking into consideration how many days the property is occupied compared to how many days it was made available for rent.
Learn More: How to Calculate the Occupancy Rate for Rental Properties
Airbnb Occupancy Rates of Major Cities
Using data gathered from Airbnb rental property listings analyzed with our own algorithms, Mashvisor can show you what kind of occupancy rate you can realistically expect in certain locations.
Taking a look at the rates for major cities in the US, we see that the highest occupancy rate can be found in Key West, FL coming in at 75%. The lowest Airbnb occupancy rate for a major city is 35% for Baton Rouge, LA. Even lower still is the town of Biloxi, MS with an Airbnb occupancy rate of 21%.
So if we were to create a range for what kind of occupancy rate real estate investors can expect in the US with short term rentals, it would be from 75%-21% it seems. As we move into the new year, it is likely most of these Airbnb occupancy rates will remain very close to this data, unless new regulations take effect.
To give you a better idea of what to expect next year, here are the occupancy rates for some of the most popular Airbnb destinations and other major cities in the US.
Airbnb Occupancy Rates for 30 Major US Cities
San Francisco, CA: 73%
Honolulu, HI: 69%
Bend, OR: 67%
Denver, CO: 66%
Raleigh, NC: 65%
Seattle, WA: 65%
Boulder, CO: 65%
Sacramento, CA: 64%
Portland, ME: 63%
Jersey City, NJ: 63%
Long Beach, CA: 62%
Los Angeles, CA: 59%
Las Vegas, NV: 59%
Orlando, FL: 59%
San Diego, CA: 59%
Fort Lauderdale, FL: 56%
Columbus, OH: 58%
Miami, FL: 54%
Nashville, TN: 52%
Dallas, TX: 52%
Virginia Beach, VA: 51%
San Antonio, TX: 50%
New Orleans, LA: 49%
Indianapolis, IN: 49%
Houston, TX: 49%
Atlanta, GA: 47%
Austin, TX: 46%
Phoenix, AZ: 42%
Scottsdale, AZ: 42%
Springfield, IL: 38%
To start looking for and analyzing Airbnb rental properties in any of these cities, click here.
Keep in mind that regulations may be in place in certain cities that either outlaw Airbnb investment property completely or severely limit the number of days a property can be rented out to tenants when you’re not living there as an owner occupant. (Maybe try house hacking in this case?) And as we move into the new year, certain new Airbnb regulations may be passed as well.
Related: Airbnb Regulations 2018- Invest in These Cities Where Airbnb Is Legal
Airbnb Occupancy Rate for Neighborhoods
Even if you buy an investment property in one of the cities listed above with high occupancy rate and the Airbnb laws allow you to rent it out as you please, you still have to find a good neighborhood for short term rentals.
Let’s take the Dallas real estate market, for example, which is the best place to invest in real estate for 2019 according to the PwC. The occupancy rate for short term rentals differs greatly from one neighborhood to another. In one neighborhood, it’s 39% and in another, it’s as high as 65%! So while the average Airbnb occupancy rate for Dallas is 52%, you can find neighborhoods with higher and lower rates.
Naturally, you’d think to aim for an Airbnb investment property in a neighborhood with the highest occupancy rate. But don’t forget- the location will typically determine how much Airbnb rental income you can make as well. More popular neighborhoods near hot tourist spots can have both a high Airbnb occupancy rate and rental rate.
Other neighborhoods can have a low rate for both. And then there are neighborhoods that might have a lower occupancy rate, but you can make high Airbnb rental income as the properties there bring in a higher nightly rate.
As you can see, it’s not as simple as just looking at one number and choosing the neighborhood to invest in real estate. So what can you do? You can use a tool like Mashvisor’s heatmap. With this real estate investment tool, you can choose a city and set filters for Airbnb occupancy rate and Airbnb rental income.
An Airbnb investor can even look at the kind of cash on cash return to expect in each neighborhood as well. Take a look:
With this easy-to-use visual, you’ll be able to find that neighborhood where the balance between Airbnb occupancy rate and rental income is struck in perfect harmony.
Start using the heatmap now and make sure you’re not guessing when it comes to occupancy rates! Click here to get started.
Learn More: Airbnb Rentals: Finding Income Properties Using a Heatmap
Airbnb Occupancy Rate for Your Rental Property
To make sure you find the best Airbnb investment property in the neighborhood of your choice, you have to go a step further and analyze the occupancy rate for individual properties. Using historical and predictive data on the properties on our platform, Mashvisor’s Airbnb profit calculator can show you what kind of Airbnb occupancy rate to expect for each property you come across.
You can also see the kind of Airbnb rental income you can make (based on real estate comps), cash flow, cash on cash return, and cap rate in order to determine if you’ll be making money in real estate or not. Here is an example of this kind of investment property analysis:
With that, you will be ready to move forward and choose an Airbnb investment property that you can be confident will make you a good ROI thanks to its occupancy rate.
Do all of this and more with a 7-day FREE trial! Click here to get started.
How You Affect Your Occupancy Rate
Keep in mind, that whatever the predictive data says about your occupancy rate, your Airbnb property management will have a large impact as well. If you choose to manage your own rental property, then be sure to:
- Create a unique, interesting listing and update it when needed
- Choose the right amount of rent to charge and set an Airbnb pricing strategy that’s seasonal
- Be friendly, hospitable, and helpful to tenants
- Monitor reviews, encourage positive ones and respond to negative ones with tact
- Keep your Airbnb investment property clean
If you use the right Airbnb data and follow these tips on how to be the best Airbnb host, you can definitely expect a high occupancy rate!
Related: Dealing with a Low Airbnb Occupancy Rate? Here’s the Solution