By The Hospitable Team
In the past decade, short-term rentals have become a more profitable strategy for most markets worldwide than renting property long term. But not all markets are created equal.
If you’re planning to buy a short-term rental property to make money from real estate this year, you will want to know where the best cities for Airbnb investment in 2021 are located.
Any effective investment strategy should be based on reliable data to help you make an informed decision, so you need actionable insights from a reliable source.
Transparent, a company that provides data intelligence for the short-term rental industry, has analyzed vacation rental data from the top European and US markets by supply.
They ranked the top 500 European and the top 500 US vacation rental places by RevPAR. This abbreviation stands for revenue per available rental night that is widely considered as the best metric for rental performance.
Let’s examine their findings to discover the best places to buy vacation rental property in Europe and the US in 2021.
Best Cities for Airbnb Investment in Europe
Below you can see a table that provides data about the top 25 vacation rental investment locations in Europe based on their RevPAR.
So the top 3 performing markets by money made per available night, all over $380, are:
- Zermatt in Switzerland
- Lège-Cap-Ferret in France
- Bagnes in Switzerland
Interestingly, 92% of the top 25 markets are non-urban. As to the urban destinations in this list—Bath, and Swansea in the UK, they have some non-urban features.
There are also five ski resorts and 16 beach-related destinations, including eight destinations located on England’s south coast. In fact, 72% of the best places to buy vacation rental property in Europe are in the UK.
Best Cities for Airbnb Investment in the US
In this table, you can see the top 25 vacation rental investment locations in the US.
So the top 3 performing markets by money made per available night, all over $380, are
- Malibu in California
- Mountain Village in Colorado
- Captiva in Florida
And here, all of the top 25 markets are non-urban. The list includes eight ski and mountain resorts and elven East coast beach destinations, including three Panhandle’ islands’ in Florida. Colorado is the state where most of the destinations in the top 25 are situated, and Hawaii appears twice on this list.
Things to Consider When Choosing the Best Markets to Invest in Airbnb Rental Property
Of course, these lists provide only a broad view based on average values. So it’s essential to consider more specific factors when deciding whether you should buy property in any of these top vacation rental investment locations in the US and Europe.
Keep in mind that property prices vary hugely from market to market, and so returns are also higher relatively in some markets.
In the table below, you can see that there can be a four-fold difference in price across different states, in addition to a variation in property size.
So the price and type of property you can buy vary across markets, which, in turn, affects your ROI.
Before you buy a rental property for your STR business, you should research the Airbnb regulations regarding licensing and taxing in the city of your choice. Make sure that it’s legal to rent out on Airbnb in this city.
Then you need to perform a neighborhood comparison to determine areas that have the potential to generate high income monthly. You should look for neighborhoods that fit your budget and consider such statistic data as Airbnb rental income, occupancy rate, and cash on cash return.
When you find the area where Airbnb is most profitable in the city, you can start your search to find an investment property that offers high ROI when rented on a short-term basis.
Making money on Airbnb starts with buying a property in a market profitable for short-term rentals. If you want to join the millions of successful Airbnb hosts, we hope our article will help you better understand where to look for a top-performing rental property to maximize your ROI.
But no matter which of the best cities for Airbnb investment 2021 you choose for buying your next STR property, it’s critical to prepare it for the rental business. Our free guide will give you hands-on advice and will save you from a lot of unnecessary operational expenses.
As a host, you’ll have a lot of responsibilities, so you’ll need powerful vacation rental software to automate your processes and increase the efficacy of your business.
Have a 24/7 helping hand.
Hospitable does everything you would expect from vacation rental management software. We’ll protect you from double-bookings, keep your pricing in sync between multiple platforms, schedule messages based on triggers and events, and streamline team-scheduling.
Still, we have a few unique features to surprise you:
- Automatically upsell late check-outs and extra nights based on the calendar.
- Respond to early check-in and late check-out requests automatically based on the calendar.
- Detect guests’ common questions on 20+ topics and respond automatically on your behalf.
- Notify you if your guest’s flight is delayed
Tailor automated communication to the guests’ personas. For example, send sofa instructions only if three adults come to your one-bedroom property.
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All guest communication in one window, team tasking, calendars sync, and much more.
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With Hospitable, you’ll be able to simplify your hosting routine, streamline your operations, manage all your listings in one place hassle-free, and save tons of time. It’ll be easier to become a successful Airbnb host and provide your guests with an excellent experience.
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You are wondering how to be an Airbnb host? Anyone can list an extra room on the Airbnb website, and signing up to become an Airbnb host is fairly simple. Still, there’s a number of steps to take and pitfalls to avoid. Don’t worry, we’ll guide you.
Thinking about real estate investment to make money outside your 9-to-5 job? Buying a vacation rental home might be the best way to enter the real estate business and become a property investor.