Vacation Home Investing: What’s the Big Deal?
Even though our data models are showing Airbnb rentals making up to 3x more than traditional long-term rentals, using vacation rentals as an avenue for investment is still not mainstream. But, buying vacation rentals is fast becoming a whole new real-estate asset class, allowing normal folks to afford – and significantly profit from – a second home.
But choosing the right place to buy vacation homes is a challenge. House prices, short-term rental restrictions and profit margins vary wildly from city to city and even street to street.
Everyday we get emails from customers asking: What are the new trends for Airbnb investing in 2017? What cities have the highest profit margins? And crucially… how do I get started?
Covering Your Rent Listing A Spare Bedroom on Airbnb
Is it possible to cover the rent by renting out your spare bedroom on Airbnb?
Crunching the numbers for our last blog post, we found that the returns on renting out a spare bedroom on Airbnb to cover rental costs are nowhere near as exciting. It looks like things have brightened up a bit for private room rentals in the last two years. With more travelers feeling comfortable sharing spaces on the cheap and regulation forcing many people into this option, this category of Airbnb rentals is on the rise.
Take a look at the dashboard below comparing the average cost of rent for a 2 bedroom house with Airbnb income from renting out a private room.
Renting in Sedona, AZ, Louisville, AZ and Detroit, MI, will more than cover your rent, making you between $2,500 and $7,800 in profit every year. The highest returns are to be found in Savannah, GA, making Airbnb many private room hosts over $9,039 per year.
Big, popular cities such as Venice, CA, and San Francisco, CA continue to top the list of the worst places for an Airbnb investment – renting your spare bedroom in these California towns will certainly soften the blow of your monthly outgoings, but aren’t going to make you any money.