Is Airbnb a profitable investment in the Virginia Beach real estate market?
It’s no secret that Airbnb has revolutionized the real estate industry for property investors. In many cities across the country, owning an Airbnb rental property will even bring higher profits than a traditional rental. Is Virginia Beach one of those cities?
To give you a comprehensive answer, this blog post explains the laws and regulations regarding Airbnb in the city, why owning an Airbnb investment property is profitable, and the best places to invest in the Virginia Beach real estate market. Let’s get started.
Virginia Beach Airbnb Laws and Regulations
Before you decide to rent out your house or a spare room for short-term on any listing site such as Airbnb, you must check whether or not this is even legal in your area. For the past two years, the Virginia Beach City Council has been trying to regulate short-term rentals.
In April of 2018, the Council adopted an ordinance that would allow property owners to rent out for a short stay as long as they register with the Commissioner of the Revenue.
According to the ordinance, such rental properties would be treated like home-sharing, where owners have to pay city and state taxes as well as occupancy taxes. Unlike home-sharing, owners of short-term rental properties don’t have to be living in the house at the same time as the renter.
Additional rules include limiting the number of rental contracts to two per week, submitting a parking plan to the city (one space per bedroom), and a cap on the number of guests allowed.
As you can see, short-term rentals are not banned in the Virginia Beach real estate market. So far, there are no set regulations despite the growing popularity of Airbnb rentals in the city. The City Council is planning to better regulate short-term rentals but hasn’t decided on a date yet.
Therefore, we recommend Virginia Beach real estate investors to keep their eyes and ears open for Airbnb related news if they’re planning on investing in short-term investment properties.
Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
Reasons to Invest in Airbnb Virginia Beach Real Estate
According to AirDNA’s Virginia Beach market overview, there are currently 1,247 active Airbnb rentals and 533 active Airbnb hosts in the city. Property investors continue to choose to rent out on the short-term rental site instead of taking long-term tenants for multiple reasons, mainly the high occupancy rate.
Your Airbnb occupancy rate is one of the most important factors that determine whether or not your Airbnb investment property will be successful. Essentially, having a high number of bookings guarantees that you’ll make more money. Thus, the best places to invest in Airbnb rentals are those with high occupancy rates.
Related: Best Cities for Airbnb Occupancy Rates
Based on data from AirDNA, the Virginia Beach real estate market has an Airbnb occupancy rate of a whopping 93%. This shouldn’t come as a surprise seeing as Virginia Beach attracts tourists all year-long with nearly 40 miles of beaches, rich history, arts, and other family attractions. For a real estate investor, this means a large pool of potential tenants either planning a six-month stay or seeking a two-week trip.
Another reason why Airbnb is a profitable rental strategy in Virginia Beach real estate is the fact that it’s an affordable market (as you’ll see below). Moreover, short-term rentals in the city generate an attractive rental income.
Seeing as rental demand is high for Airbnb properties, hosts can charge their renters a high price and, consequently, receive a good return on investment. All these reasons make buying a Virginia Beach real estate investment property to rent it out on Airbnb a smart investment decision.
Virginia Beach Real Estate Market Overview
Below is data obtained from Mashvisor’s investment property calculator to further show that Airbnb is a profitable investment in the Virginia Beach real estate market in 2018:
- Median Property Price: $366,725
- Price Per Square Foot: $183.02
- Airbnb Rental Income: $4,003
- Cash on Cash Return: 6.7%
- Cap Rate: 6.7%
Mashvisor’s investment property calculator is the ultimate tool for a real estate investor aiming for success. It allows you to search for and compare properties in any city across the US housing market, provides you with data to analyze their profitability, and determine the optimal rental strategy to make the most out of your investment.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Related: This Is How the Investment Property Calculator Eliminates the Need for Real Estate Market Analysis
Best Neighborhoods in Virginia Beach Real Estate Market
To succeed in real estate investing, you should remember that because a certain city is profitable, not just any neighborhood is favorable for owning a rental property – especially a short-term rental. To further help you make a smart investment decision, here are the best neighborhoods in Virginia Beach real estate market to consider for an Airbnb investment (also according to Mashvisor’s investment property calculator):
Princess Anne Plaza
- Median Property Price: $236,123
- Price Per Square Foot: $152.46
- Airbnb Rental Income: $3,646
- Cash on Cash Return: 10.05%
- Cap Rate: 10.05%
Green Run
- Median Property Price: $214,242
- Price Per Square Foot: $132.36
- Airbnb Rental Income: $3,315
- Cash on Cash Return: 8.85%
- Cap Rate: 8.85%
Seatack
- Median Property Price: $329,736
- Price Per Square Foot: $207.75
- Airbnb Rental Income: $4,491
- Cash on Cash Return: 8.78%
- Cap Rate: 8.78%
Rudee Heights
- Median Property Price: $467,843
- Price Per Square Foot: $291.51
- Airbnb Rental Income: $4,442
- Cash on Cash Return: 6.71%
- Cap Rate: 6.71%
Lynnhaven Shores
- Median Property Price: $421,892
- Price Per Square Foot: $224.23
- Airbnb Rental Income: $4,137
- Cash on Cash Return: 6.28%
- Cap Rate: 6.28%
Chesapeake Beach
- Median Property Price: $547,670
- Price Per Square Foot: $255.15
- Airbnb Rental Income: $4,620
- Cash on Cash Return: 5.58%
- Cap Rate: 5.58%
The North End
- Median Property Price: $827,018
- Price Per Square Foot: $344.77
- Airbnb Rental Income: $5,715
- Cash on Cash Return: 4.14%
- Cap Rate: 4.14%
What Are You Waiting For?
To sum up, great investment opportunities are awaiting property investors who are planning on investing in Airbnb Virginia Beach this year. You can count on us to help you find and analyze the best Virginia Beach real estate investment properties and start making money in no time. Just sign up with Mashvisor or click here to start out your 14-day free trial!
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