You can make money in real estate and generate positive cash flow in numerous ways without having to torture yourself. One great way to start putting cash in your pockets is from rental properties. There are many factors which are influential to the success of rental properties. Before you invest in rental properties, you need to take into consideration variables such as cash on cash return, occupancy rate, and cap rate.
Likewise, you need to choose an investment strategy that suits your financial situation. Do you want to invest in traditional rentals or Airbnb rentals? If you are looking for Airbnb investment properties across the country, then you are definitely wondering which of the most popular Airbnb cities have the highest Airbnb rental income.
Airbnb rental income is what determines the profits real estate investors make from Airbnb investments. The factors that affect your Airbnb rental income are location, occupancy rate, and property management. Before naming the most popular Airbnb cities, let’s discuss each factor separately.
The Location of the Investment Property
Location is the key to determining the profitability and return on investment for your investment property. It is the first thing to take into consideration before purchasing an investment property (traditional or Airbnb). Normally, the most popular Airbnb cities are those that attract a high number of tourists, are highly populated, and are home to major companies, industries, and universities.
Before making any decisions, you want to make sure the area you are searching in legally allows Airbnb investment properties. Why waste your time searching in cities where Airbnb is illegal? To help you find the right locations for Airbnb investing, use Mashvisor. Mashvisor’s platform can make your search easier and faster.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Occupancy Rate
The occupancy rate for an investment property is the amount of time the property is occupied by tenants throughout the year. The occupancy rate depends on two main factors: the location of the property and how well the real estate investor advertises his/her property. A property that receives a high rating and great reviews tends to have a higher demand than properties that lack good tenant reviews. The higher the demand, the greater the Airbnb rental income for your property will be.
Property Management
Your Airbnb rental income is also affected by how well or how bad you manage your property. Managing short-term rentals requires a lot of effort due to the constant tenant turnover. You can either self-manage the property, which would mean that you would have to live near the rental property or you could hire professional Airbnb property management. Each option comes with a price to pay. Self-management requires your full commitment and time, while a management company is very costly. Most professional property management companies charge real estate investors 8-12% of their property’s rental rate. This will definitely affect your expected Airbnb rental income and profit margin.
Useful Tools for Finding Airbnb Rental Properties
As I mentioned, Mashvisor’s platform has an array of tools that can make your search for Airbnb investment properties easier. To find these properties in the most popular Airbnb cities, use the following tools from Mashvisor:
- Mashvisor’s Heatmap: Our heatmap tool allows investors to find the investment properties faster using color-coded visual cues. The map is colored to highlight the different areas according to your selected criteria (listing price, cash on cash return, rental income or Airbnb occupancy rate). To find out more about Mashvisor’s heatmap and how you can find Airbnb rentals in the most popular Airbnb cities, read: Airbnb Rentals: Finding Income Properties Using a Heatmap
- Mashvisor’s Property Finder: The Property Finder tool automatically gives you the best performing properties in the city/cities of your choice. You can find Airbnb rental properties that have the highest potential for returns.
- Investment Property Calculator: With this tool, property investors are able to calculate the different values related to the Airbnb investment property. You can calculate Airbnb cap rate, cash on cash return, or cash flow.
Sign up with Mashvisor to get full access to these real estate investment tools to help you find the best Airbnb investment property with the highest Airbnb rental income!
Now let’s begin naming the most popular Airbnb cities in 2018.
1. Nashville, Tennessee
Nashville is considered one of the most popular Airbnb cities in 2018 due to its increasing population growth and tourist attraction. It has a stable legal framework in terms of short-term rentals and is currently one of the most successful U.S real estate markets. According to Mashvisor’s data, the best neighborhoods in Nashville for Airbnb investment are Germantown and Melrose:
Germantown
- Airbnb occupancy rate: 63%
- Airbnb rental income: $6,013
- Airbnb cash on cash return: 12%
- Airbnb cap rate: 12%
- Median price: $345,000
Melrose
- Airbnb occupancy rate: 67.6%
- Airbnb rental income: $6,783
- Airbnb cash on cash return: 8%
- Airbnb cap rate: 8%
- Median price: $576,756
2. Las Vegas, Nevada
Las Vegas checks off all the boxes for most popular Airbnb cities. Besides its crazy tourist attractions throughout the entire year, Las Vegas is known for its high rental rates, especially for short-term rentals. From Mashvisor’s data, it appears that the best neighborhoods in Las Vegas for Airbnb investing are Huntridge and Rancho Charles.
Huntridge
- Airbnb occupancy rate: 60.7%
- Airbnb rental income: $2,762
- Airbnb cash on cash return: 7.08%
- Airbnb cap rate: 7.08%
- Median price: $238,429
Rancho Charles
- Airbnb occupancy rate: 58.95%
- Airbnb rental income: $2,728
- Airbnb cash on cash return: 5.86%
- Airbnb cap rate: 5.86%
- Median price: $291,585
3. Baltimore, Maryland
Baltimore’s growing real estate market is making it one of the most popular Airbnb cities for Airbnb investment. The median price of Baltimore housing increased 10% since 2017 which is an expected trend for coming years. Let’s see the most recent numbers for Baltimore from Mashvisor’s investment property calculator and which neighborhood is the best for Airbnb investment.
Old Town
- Airbnb occupancy rate: 54.37%
- Airbnb rental income: $2,098
- Airbnb cash on cash return: 10.94%
- Airbnb cap rate: 10.94%
- Median price: $94,500
4. Virginia Beach, Virginia
Virginia Beach is a great resort city with miles of beach which is one of the reasons why it’s considered one of the most popular Airbnb cities. It is a very populous city and especially great for buying vacation home rentals. Here are the numbers we got for the neighborhood of Seatack in Virginia Beach from Mashvisor’s data:
Seatack
- Airbnb occupancy rate: 62.6%
- Airbnb rental income: $2,708
- Airbnb cash on cash return: 5.68%
- Airbnb cap rate: 5.68%
- Median Price: $304,480
5. Palm Springs, California
Why is this city one of the most popular Airbnb cities in the US? Because of its high popularity among tourists. The amount of tourism this city attracts is enough to cover the expenses of rental properties and make them profitable. Here are Mashvisor’s stats for Palm Springs, California.
Palm Springs
- Airbnb occupancy rate: 50.88%
- Airbnb rental income: $4,596
- Airbnb cash on cash return: 4.56%
- Airbnb cap rate: 4.56%
- Median Price: $660,946
The Bottom Line
Whenever you decide to invest in Airbnb rental properties, always keep in mind the most popular Airbnb cities. With these locations, you will guarantee high returns and steady positive cash flow from your Airbnb rental income. Do not ponder on how to start looking for these properties. Simply use Mashvisor’s tools and you will be ready to go. So make sure you visit our website at Mashvisor.com and begin your search.
Schedule a demo with us today to find out how Mashvisor can help you in your Airbnb investment journey.