What are the best neighborhoods for AirBnB hosts in New York?
For New Yorkers planning their next move, AirBnB is an increasingly important piece of the decision. We all suspect that the neighborhood matters, but it’s conjecture — “I heard Bushwick is hot right now” or “My friend pays his whole rent by AirBnB’ing his second bedroom.” “I’m thinking Lower East Side or Williamsburg” is echoing from brunch tables across the City. Well, if you are out of town for just a month, that decision could cost you $1,250. If you’re a frequent traveler, neighborhood economics snowball quickly.
We wanted to quantify the difference, while controlling for the wildly different rents across the City, so we chose 1BR homes and asked two questions:
How many days would I have to AirBnB my apartment in each neighborhood to pay back my rent?
How much income can I expect after paying that rent?
The second question is important when you consider that much of the expenses and work associated with managing an AirBnB are fixed: exchanging messages, coordinating cleaners, greeting and key exchange.
We used data from Zumper on average 1BR rental prices and AirDNA on average AirBnB rental prices, and only examined listings available for more than 10 nights per year to weed out inactive listings. Here are the results:
- Manhattan leads the field with the top three highest yielding neighborhoods: LES, UES, and SoHo. In all three, you could expect to earn back your rent by booking half the month. Much of their strength is driven by the heavy, consistent tourist demand. They have cultural cachet, and easy access to transport. They are a safe long-term bet.
- Perhaps surprisingly, Williamsburg is the second worst performing neighborhood, driven by the largest supply of units, a low avg. rate of $148/night and a high avg. rent at $3.2K/month. There is an abundance of beautiful, designer lofts, and yet tourists remain reticent to cross the bridge. The looming demise of the L-train isn’t going to do the neighborhood any favors.
- Across the board, letting out your apartment remains highly lucrative. With the exception of Borough Park, every neighborhood in Manhattan and Brooklyn will pay back your rent, assuming you achieve 85% occupancy.
- A few quick, caveats: this analysis doesn’t control for the difference in average size or quality of apartments across neighborhoods. It also assumes neighborhood prices are relatively efficient and doesn’t control for seasonality. These numbers can inform decisions, but aren’t hard predictions.
Other advice for choosing the perfect AirBnB apartment
As you likely know, AirBnB is in a tricky position in New York, so we have a few more pieces of advice to locating a sustainable AirBnB location:
- Avoid large luxury buildings — several management companies, like TF Cornerstone — have invested in services to locate their units on AirBnB and quickly issue cease and desist letters. It’s not uncommon to receive a notice within a week of posting a listing.
- Is the doorman your friend? Doormen see and hear everything, including the surprising number of Swedish guests entering your apartment. They can shut down a new listing in days.
- Condos over Co-ops. Co-ops don’t appreciate unapproved guests entering their space. Avoid them if you can.
- Open the mobile app. Search for listings around your prospective apartment. Do they have a suspiciously similar interior? The chances are good that your building is a safe space.
All these reasons reinforce why SoHo, LES and UES are so successful — they have a preponderance of landlord-owned brownstones. As long as you are scrupulous about choosing guests, you can run a sustainable AirBnB for years.
How we can help
At Happy Host, we take all the work out of AirBnB’ing your apartment while improving performance to cover our commission. For many New Yorkers, there simply isn’t enough time to respond to the endless messages, dirty linens and late night guest concerns. We enjoy it. Check out our services at http://happyhost.nyc and contact us today at firstname.lastname@example.org. We’ll be glad to join you on the apartment search.