Finding the Best Cities for Airbnb Investments 2023: USA, Canada, Australia, & the UK
Staying ahead of the curve in real estate investing is crucial, and seasoned investors know that the most lucrative opportunities often lie within the hottest markets. This is true for traditional investment properties and short-term rentals, like Airbnb. For both, the same is still the case: location remains vital.
As data analytics has revolutionized various industries, it has also transformed the path of property investors toward Airbnb success. This has served as breadcrumbs that lead them to the most profitable opportunities. Through a meticulous study of accurate Airbnb statistics and real estate analysis, Airbtics has curated lists of the 40 best cities for Airbnb for 2023, particularly in the US, the UK, Canada, and Australia.
How We Did It?
Our dedicated team has dove into the realm of Airbnb data. With a sharp eye for profitable opportunities, we surveyed the alluring markets in many forms within the United States, the United Kingdom, Canada, and Australia:
- financial centers
- coastal havens
- vibrant university towns, and
- irresistible vacation hotspots
Our indispensable companion throughout this journey is the Airbtics’ Dashboard. With its wide range of advanced functionalities, we have curated an extensive dataset showing the profitability of various short-term rental markets within the last 12-month period.
Yet, we understand that earning is not enough. Delving deeper, we painstakingly compiled data on the median property prices in these cities. We have uncovered the potential income against property costs, calculating the cap rate for each market. As these numbers fell into place, we are glad to share with you our findings.
Where are the Best Cities for Airbnb Investments 2023?
The variety of factors coming into play make this question not straightforward to answer. So let’s break this down, asking the right questions that can be answered quantitatively with the help of data analytics. Their responses can substantially influence a market’s financial viability.
What is your Investment Capacity?
Look for a market with the closest median property price to your budget. The median property price is the sweet spot when all of the properties are arranged from the least to the most expensive. It stands as the midpoint, dividing an Airbnb market into higher-priced and more affordable segments.
What is the Number of Active Airbnb listings?
This number represents the availability of short-term rentals in a particular market. While a
higher count signifies a vibrant location, it may also imply heightened competition. Therefore, you may use this metric as a yardstick for the effort you need to exert to make your rental stand out.
How Often is the Market Booked?
The average Airbnb occupancy in the market can answer this. This is calculated with the total booked nights divided by the available nights of all properties in a location. This figure reflects the activity in a market. A high occupancy rate indicates a consistent stream of income, with properties rarely experiencing vacancies.
What is the market’s earning potential?
The potential annual revenue represents the anticipated yearly income a property within a particular market might yield. It’s computed from the market’s average daily rate and occupancy rate, offering a preview of potential earnings before costs are considered.
For investors seeking a competitive edge in their search, selecting the ideal property type and best number of bedrooms within your Airbnb market can lead to optimized earnings.
What is a Good Airbnb Occupancy Rate?
You can use Airbnb analytics as a guide to determine your local market’s standards. This serves as a useful point of reference, but it’s important to note that each market operates by its own rules. Once you establish and even surpass this benchmark, it’s an indication that you’re on a successful track.
What is a good cap rate?
This critical metric typically finds its sweet spot within the 5–10%. Within this spectrum, a property positioned towards the higher end could potentially give a more substantial yield in relation to its market valuation. Conversely, a lower cap rate signals a comparatively restrained profit margin relative to the initial investment outlay.
The capitalization rate, often referred to as cap rate, serves as a metric that not only gauges the property’s profitability but also holds immense value in assessing diverse real estate investment options. Calculating it necessitates the division of the property’s net income (income generated from rent after deducting expenses like taxes and maintenance) by its prevailing market worth.
Should the cap rate surpass the 10% mark, it might be indicative of associated risks, possibly hinting at uncertain income potential or a dissonance with the prevailing market price trends. This renders the cap rate an invaluable tool for prospective investors seeking to make informed decisions in the dynamic landscape of real estate.
Evaluation of the STR-Friendly Cities
Our team has developed a standardized approach to evaluate the ease of doing business in the
best cities for Airbnb investments in 2023 in the United States, the United Kingdom, Canada, and Australia. Our assessment covers various factors, including zoning constraints (1 point), limitations on hosting duration (1 point), and the percentage of local taxes (classified as follows: 1 point for tax rates below 5%, 2 points for rates ranging from 6% to 10%, and 3 points for rates of 11% and above).
Through this meticulously designed scoring system that accounts for these factors, prospective investors can identify the optimal location that aligns with their investment objectives.
Nevertheless, it’s crucial to remember that lenient Airbnb regulations where such exist do not automatically ensure immediate high profits within their jurisdictions. Rather, Airbnb investors can leverage this framework to streamline their search, enhancing the ease of managing their short-term rental business.
Start Strong or Elevate Your Airbnb Investment Game
Elevate your investment game to new heights with Airbtics Pro! Immerse yourself in a world where data-driven decisions are your secret tool in finding the best cities for Airbnb investments 2023. Whether you’re a seasoned veteran or a novice taking your first steps, gain valuable investment insights from Airbtics market reports powered by our unparalleled Dashboard!
Unravel the complexities of market trends and unveil hidden gems that promise remarkable returns. With Airbtics market reports in your hand, success is not a question of “if,” but “when.” Don’t miss out on this opportunity to seize your financial future. Subscribe now and open the doors to a realm of limitless possibilities with Airbtics Pro!
