Are you thinking of investing in an Airbnb property? Stasher asked successful Airbnb hosts, property managers, and real estate agents where investors can find the best places to run an Airbnb. Our experts also offered some valuable tips for first-time hosts.
Top 10 Places to Own an Airbnb
San Francisco, California
Shawn Richards, adventure guide at Ultimate Kilamanjaro, did his homework and checked TripAdvisor’s ranking system. According to TripAdvisor, San Francisco is the number one place to own an Airbnb.
“San Francisco is a beautiful city and very popular with travelers from around the world. In fact, San Francisco is consistently ranked as one of the top tourist destinations in the United States. The city is located at the tip of a peninsula in Northern California, bordered by the Pacific Ocean on one side and San Francisco Bay on the other three sides. This beautiful location makes it extremely popular with tourists who come to enjoy its many attractions,” says Richards.
New York, New York
According to Suzanne Bucknam, CEO of The Connecticut Explorer, “New York City has more than 25,000 Airbnb hosts who made nearly $300 million in 2017 alone. New York City is one of the most popular areas for investors in Airbnb properties.”
William Cannon, Founder of Signaturely, agrees that big-city tourist destinations are ideal places to run Airbnbs. “You can make the most money off of your Airbnb if it is located in a tourist destination because not only will you be able to charge more for your room, but you will also have customers staying in your home year-round.
A long-time mecca for music lovers, Austin is currently expanding into the next tech hub with more companies moving away from Silicon Valley. This means that Austin will not only see its usual flood of tourists, but Airbnb owners will be booking more guests for business travel.
Connecticut realtor Mike Gregor states, “Right now, Austin, Texas, is one of the most amazing and fantastic places to invest in Airbnb… The median price around the city is $257,900 by the end of 2021. The monthly rent is around $1,110, and the vacancy rate is 5.43% which is way below the national average. Currently, the city is [booming] for investors as the year-over-year rent increase is more than ever.”
The Southern United States
Austin isn’t the only place in the South that’s excellent for running an Airbnb. With many properties in cities like San Francisco and New York already swept up, investors are taking advantage of the newer markets and lower costs of properties in southern states.
Communications manager Allison Ferre from Vacasa mentions three southern cities as major investment hotspots: Gulf Shores, Alabama, Gatlinburg, Tennessee, and St. Augustine, Florida. As Vacasa is North America’s leading rental management platform, we’ll take her word for it.
Ben Fisher from The Fisher Group adds Savannah, Georgia, to the list. “Savannah is a wonderful southern escape, a place where art, architecture, and ghost stories walk hand in hand. Tourists love the breathtaking scenic beauty of this place, along with the amazing cuisine that just comes straight from the coast!”
Between the rising cost of living and increasingly frigid winters, many people from the United States and Canada are heading south for at least part of the year. With its incredible natural setting and friendly locals, Costa Rica has been popular among ex-pats and snowbirds for quite a while. However, the country has become an even more popular destination in recent years as more people retire abroad or adopt digital nomad lifestyles.
Costa Rica’s infrastructure has improved significantly, and northerners are finding that they can live with all the comforts of home for a fraction of the price. Travelers can even book a luxury vacation for the cost of a budget trip to a North American or European destination.
Tim and Tracey Kerin from Dare to Dream strive to provide their guests with the experience of total relaxation in their exceptionally successful villas, run through Airbnb Lux. “We offer a la carte or all-inclusive packages that can include private transportation, concierge in-house, chef services, housekeeping, bartending, and even private massages in the villa.” Keep your eye out for their new villa, Essence of Dreams, which will be opening in late spring of 2023.
Three of our participants mentioned locations in Hawaii, and it’s no wonder. Who hasn’t dreamt of visiting the islands or owning a vacation home in paradise?
Maui, especially the Lahaina area, tops the list. Despite the island’s immense popularity and the profusion of celebrity second homes, Maui remains relatively pristine. However, Kauai has been gaining on its bigger sister as an ideal place to run an Airbnb.
Palm Springs, California
Palm Springs has always been a popular tourist destination, but many of today’s travelers look for alternatives to cookie-cutter mega-resorts. Airbnb hosts can fill the niche by providing homey atmospheres and bed-and-breakfast-style accommodations.
Brian Burke from Kenna Real Estate notes, “According to the analytic firm Airdna data, Palm Springs, California is the most revenue-generating location among the U.S. cities for Airbnb. The potential annual profit of this location is $62,621. As most of the tourists are seeking a warm, sunny destination in the winter season, it becomes a favorable place to stay.”
Not everybody dreams of spending their holiday on a sunny beach. Many travelers prefer more temperate summer vacations or enjoy snowboarding, skiing, and other winter sports.
According to Conner Griffiths of Lifty Life Vacation Rentals, Canmore is the best place to run an Airbnb in Alberta. Canmore sits within one hour of Calgary and four major ski resorts. Griffiths comments, “Canmore is a bedroom community of Banff National Park. Banff is a major international draw, but because strict housing regulation on the federal level does not allow Airbnb, Canmore [presents] a massive opportunity. Canmore borders the national park without being governed by it.”
9. Manchester, Tennessee
Nate Tsang from Wall Street Zen points out that the most popular year-round tourists destination may not be accessible to new investors. “You can really thrive with an AirBnB if you have a large property where multiple guests can stay. Think bachelorette parties or groups traveling for events, like music festivals.” Tsang specifically suggests buying property in Manchester, Tennessee, home to the Bonnaroo Music and Arts Festival.
10. Lisbon, Portugal
Portugal has become one of the hottest destinations for ex-pats and digital nomads, especially the area around Lisbon. Nancy Michelle Cote recommends Ericeira, the traditional fishing village and world surf reserve 25 minutes outside of the capital, as one of Portugal’s best places to own an Airbnb.
Cote runs a successful Airbnb in her favorite Portuguese town and writes about it in her blog, Ericeira Family Adventures. According to Cote, “Portugal received 24.5 million visitors in 2019, a 7.5 % increase from 2018, [and] an increase which is reflected in tourism in Ericeira as well. Portugal is known to be a cheap and sunny destination in Europe, which is why tourism didn’t come to a standstill during the pandemic.”
Tips and Tricks for Airbnb Hosts
Besides suggesting the best places to own an Airbnb in 2022, our expert participants offered some essential tips for success as a host.
Most of our participants suggested looking at various statistics, such as the median home price, average monthly rental prices, peak cap rates, and vacancy rates before investing in an Airbnb property. The rate of increase for property values and rents are also important factors to consider.
Additionally, Staffo Dobrev from Wanderu suggests comparing the average price of a hotel room versus Airbnb accommodations to help decide where to invest. His company compared the prices of 20 popular cities across Canada, Europe, and the United States. You can read the results here.
Start with your existing home.
For many potential investors, both economics and regulations can be prohibitive. Veronica Hanson, blogger from Nomad Veronica, points out, “In a city with extremely high home prices, it would be tough to go in as an investor and buy a home and turn it into a profitable Airbnb. However, existing homeowners could easily look at a market and realize [that] there are no homes allowing 14 people from a soccer team to stay under one roof. I personally started Airbnb when I realized that gap in the market.”
For more helpful information on running a successful Airbnb, check out the additional articles in the B2B section of Stasher’s blog.