8 Best Cities for Airbnb Investment in 2019

Published in

Mashvisor

5 min readDec 6, 2018

2019 is almost here and real estate investors are gearing up to find the best cities for Airbnb investment. But, they might be a bit hesitant thanks to all the strict regulations across the US housing market.

Luckily, using Airbnb rental data from Mashvisor’s investment property calculator and reviewing short-term rental regulations, we found the 8 best cities for Airbnb investment 2019. And just in time for you to buy investment property and start making money in the new year! Not only does it seem Airbnb investment property can operate legally in these cities, but the cash on cash return for such properties is the highest in the US.

#1 Lansing, Michigan

If you thought owning a vacation home rental in Michigan was a good idea, your hunch was right. That is if you invest in Airbnb Lansing real estate. For one, the Greater Lansing region welcomes over 4.8 million tourists a year. These visitors boost the economy annually by bringing in over $602 million.

In terms of the general Lansing housing market, it is currently a buyer’s market which means when buying an investment property, you have significant sway. So seeing as how the Lansing real estate market is already the 7thmost affordable market in Mashvisor’s database, you’ll find affordable properties and likely get to negotiate the price down some. The expected real estate appreciation for the next year is 6.3%, according to Zillow. Not only will you make positive cash flow in this market, but property value will increase nicely. Along with these facts, the Lansing real estate market has the highest cash on cash return for Airbnb rental properties on this list. No wonder it’s #1 for the best cities for Airbnb investment 2019.

Check it out! Lansing made this list for the best cities to buy Michigan vacation home rentals.

In terms of the Airbnb regulations for Lansing, we look to the greater State of Michigan. Michigan legislators are pushing to pass bills preventing any city from banning short-term rentals. While these bills have not officially been passed, it’s a positive step towards legalizing Airbnb in Michigan cities. And while there is some opposition to the bills, as of date, it seems operating non-owner occupied Airbnb investments in the Lansing real estate market is legal.

Median Property Price: $102,100
Monthly Airbnb Rental Income: $2,674
Airbnb Cash on Cash Return: 11%
Airbnb Occupancy Rate: 64%

Start searching for Airbnb rental property.

#2 Tuscaloosa, Alabama

Tourism in the greater Tuscaloosa County saw a 9.7% growth in 2017. Visitors spent around $600 million, boosting the local economies within this region. The Tuscaloosa real estate market is actually home to the 8thlargest sports stadium in the world, Bryant-Denny Stadium as well as the University of Alabama. Typically, college towns make great places for Airbnb rentals thanks to occasions like graduations and sports events. In fact, in 2017, the Bryant-Denny Stadium had the highest attendance for sports destinations in the state, with visitors coming from all over Alabama and the US to watch the games. It’s not surprising that Tuscaloosa vacation rental owners enjoy a high cash on cash return.

Being one of the best cities for Airbnb investment 2019, the health of the Tuscaloosa housing market is also something to boast about. Real estate property prices appreciated a whopping 13.2% over the last year. By this time next year, it’s predicted a Tuscaloosa investment property’s price will rise another 15.7%! Even so, the median property price is still below the national median and the market is currently a buyer’s market.

Because Tuscaloosa allows short-term rentals, it easily makes the list of the best places to buy Airbnb property. However, there is a catch. There are only a few designated areas where an Airbnb investor can legally operate a short-term rental. You can learn more about these zones here. The positive thing is that there are talks of expanding these zones and it’s likely that later in 2019, you may have more options for Airbnb locations in the Tuscaloosa real estate market.

Median Property Price: $211,542
Monthly Airbnb Rental Income: $3,274
Airbnb Cash on Cash Return: 10%
Airbnb Occupancy Rate: 40%

#3 Dubuque, Iowa

Dubuque may not come to mind when you think of the best Airbnb cities. But actually, this city has a booming tourism industry and receives over a million visitors annually. There are plenty of tourist attractions from the National Mississippi River Museum and Aquarium to the Grand Harbor Resort and Waterpark. It’s another college town on our list, with 5 institutions for higher learning. All of this makes it one of the most profitable Airbnb locations.

The Dubuque real estate market is currently a buyer’s market, the third one on our list for the best cities for Airbnb investment 2019. (Use this to your advantage as the general US housing market will be a seller’s market in 2019.) The median property price from Mashvisor’s data is far below the national price as well.

When it comes to short-term rental regulations, Airbnb rentals are regulated in this city. There is a taxation system already in place as of 2017 in the State of Iowa as a whole. However, be sure to check local zoning ordinances to ensure you can use a non-owner occupied property as an Airbnb rental as there are regulations in place.

Median Property Price: $147,408
Monthly Airbnb Rental Income: $2,984
Airbnb Cash on Cash Return: 9%
Airbnb Occupancy Rate: 43%

#4 Goshen, Indiana

Another possibly shocking city on the list for the best cities for Airbnb investment 2019. However, if you’ve taken a look at the Airbnb trends for 2019, smaller vacation spots are gaining popularity among travelers, especially in Midwestern cities. In fact, from 2015 to 2016, there was a 4% increase in hotel demand from tourists in this city. While the number of tourists may be modest here, vacation rental property owners can make good returns with the high occupancy rates, especially during the months of June through October.

Looking at the Goshen real estate market, it is a seller’s market where the property price appreciation reached near 14% last year. Even as a seller’s market, it still makes it on our list for the best cities for Airbnb investment. That’s because with the affordable median property price far below the national and a much lower expected rise in prices of 3.2% next year, the Goshen housing market is still a place for real estate investors to find a good deal and get a great ROI.

The city’s Airbnb regulations allow for short-term rentals for investment property, with special permissions it seems. Still, even if you may have to jump through a few hoops, it could be worth it for the high cash on cash return you’ll get.

Median Property Price: $151,112
Monthly Airbnb Rental Income: $2,793
Airbnb Cash on Cash Return: 9%
Airbnb Occupancy Rate: 66%

If you’d like to learn what the next 4 best cities for Airbnb investment 2019 are, read the full article: 8 Best Cities for Airbnb Investment in 2019.

Originally published at www.mashvisor.com on December 6, 2018.