In the real estate industry, location matters. When it comes to owning a vacation rental property, location matters even more. Existing Airbnb hosts will be well aware that their choice of US cities matters if they want to make a consistent profit.
From occupancy rates to local rules and regulations, there are various factors that you need to keep in mind if you plan on turning a beach house, a one-bedroom condo, or even a two-bedroom house into a vacation rental.
Whether you’re thinking about starting your own Airbnb business or it’s time to expand your current portfolio of rental properties, here are the best Airbnb markets predicted for 2023.
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What to Consider When Investing in an Airbnb Vacation Rental?
Although you might think most of this year’s travel will be international now that regulations are back to the pre-pandemic level, many Americans will travel locally.
According to an Expedia survey, 59% of respondents expect to plan travel within the U.S. instead of traveling internationally or in addition to foreign trips.
While there are several Top-10 listicles available online that explore the most popular Airbnb destinations and best places to own an Airbnb, it’s key that you also know which factors to analyze.
There’s much more to buying a property with the aim of transforming it into a luxe Airbnb than simply looking at its location and all the amenities on offer. Successful Airbnb hosts need to keep these factors in mind.
Two-bedroom properties may be more popular than one-bedroom rentals. Properties near national parks or cabins with a fire pit might also be more popular. Then listings in US cities like Las Vegas or properties close to natural features like the Smoky Mountains.
These are the sorts of insights that Airbnb hosts need to consider when investing in a property, no matter which of the US cities you choose to invest in.
Sure, amenities like a hot tub, fire pit or pool, and other modern comforts can be great selling points, but you’ll also need to pay attention to more technical matters like:
- Occupancy rate: the percentage of occupied rooms in your property at a given time.
- Revenue earned per available rental (RevPAR): Calculated by multiplying a hotel’s average daily room rate by its occupancy rate
- Average daily rate: Measures the average rental revenue earned for an occupied room per day.
- Local rules and regulations
- Property taxes: Property taxes, or real estate taxes, are paid by a real estate owner to county or local tax authorities
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Other less technical factors to keep in mind include:
- The type of guests that a property will most likely appeal to
- The neighborhood’s crime rate
- Amenities and attractions the city has to offer
- The number of vacation rental properties in the area already
- Proximity to the city center
- The number of bedrooms
Armed with better insight into which data and features to keep in mind, here are 15 of the best places to own an Airbnb in 2023, listed in no particular order.
15 of the Best Airbnb Markets Predicted for 2023
Charleston, South Carolina
Not only does Charleston boast the title of the biggest city in South Carolina, but also has a number of beautiful beaches along the Atlantic Ocean.
In addition to its sandy shores, there are also a number of attractions and activities that include historic sites, museums, and walking tours to name only a few.Its charm also makes for a romantic getaway.
Most famously, the first picture conjured up at the mention of Charleston is that of Spanish moss-lined grand driveways leading up to stately plantation houses. One of the most notable plantation houses for history buffs to visit is Boone Hall Plantation.
Anyone intrigued by this time period would be delighted to be anywhere within proximity of this kind of historic property and guarantees you’ll have nights booked year-round.
What makes South Carolina, and Charleston in particular, such a popular choice for vacation rental real estate investors is its RevPAR growth. Along with Slidell in Louisiana, AirDNA’s data ranks Charleston as the place with the best potential in this department. It might not boast such high demand as Maui and Crystal River, but there’s loads of potential to run a thriving short-term rental here.
The Poconos, Pennsylvania (Great for a Romantic Getaway)
The Poconos has been rated as one of the most popular vacation rental Airbnb destinations for a number of years running. One of its major attractions is that it’s very accessible to travelers from multiple states which helps to ensure great occupancy rates throughout the year.
Because of the surrounding mountains and unspoiled nature, it’s a popular destination for outdoorsmen and hikers. Bushkill Falls with its walkways made out of wooden beams makes for a great day out.
What’s more, it caters to various interests. There’s the option of investing in an Airbnb lake house or a tiny house up in the mountains.
From fishing to hiking to skiing, this beautiful region offers virtually everything. This means your vacation rental property could attract an extremely diverse range of guests.
Slidell, Louisiana
Settled on the north bank of Lake Pontchartrain, the charming city of Slidell is only forty minutes from the vacation rental powerhouse that is New Orlean’s French Quarter.
Slidell boasts one of the highest RevPAR and vacation rental investor scores, according to AirDNA. Just a short commute from New Orleans, it’s an attractive destination for those looking to explore the South and stay in a lovely vacation rental property.
It offers several amenities and activities that include hunting, sailing, and fishing. For those less adventurous travelers, there are antique shops, galleries, and restaurants serving authentic New Orleans cuisine. Isolated vacation rental properties are always popular, as guests want to take a break from the city, but don’t want to have to travel too far to get there.
Chattanooga, Tennessee (one of the most popular US cities for vacation rentals)
If rental demand is one of your most important metrics, be sure to check out Chattanooga. While its average daily rate is much lower than that of Slidell, its occupancy rate is typically higher and has been for the past year. Part of its appeal is driven by the recent increase in domestic travel.
Nestled between mountains along the Tennessee River, Chattanooga has been named by Lonely Planet and the New York Times as one of the best destinations to visit in the United States.
Popular tourist attractions and activities include rock climbing, horseback riding, walks along the river, and many more. All in all, it’s one of the best outdoor destinations.
Savannah, Georgia (Walking distance from historical sites)
Savannah is a charming, coastal town that’s separated from South Carolina by the Savannah River. Known for its historic buildings that tell ghostly tales, it will leave travelers enchanted. After enjoying fresh seafood cuisine and a co*cktail or two, there are many boutiques to be explored too. Downtown Savannah is also great for pedestrians because everything feels within walking distance. Your Airbnb guests can explore the local neighborhood with ease.
If you’re keen on buying a property here, take the time to familiarize yourself with the short-term rental regulations, though. Unlike some of the other cities, Savannah has more zoning ordinances to keep in mind.It also isn’t below sea level, but it is low lying so keep that in mind.
Maui, Hawaii
While it’s hard to pick the best destination in the US, Maui performs well across all key areas, according to data shared by AirDNA. It boasts great rental demand and RevPAR growth potential, making it one of the top choices among vacation rental investors. In fact, in 2022, it was listed as the best place to invest in vacation rentals in the US in AirDNA’s annual report and it’s expected that this popularity will continue into the new year.
It’s Hawaii’s second-biggest island and offers several beaches boasting global fame that feel like a short walk away. Guests can enjoy farm-to-table cuisine while enjoying one of its many beautiful sunsets. Other popular activities include hiking trails, paddle boarding, and snorkeling.
Kenai Peninsula, Alaska
After Maui, AirDNA rates Kenai Peninsula as one of the most attractive destinations for investors. Its vacation rental demand might not be as high as Maui’s, but it offers better RevPAR growth.
If your dream is to own a secluded vacation rental property or Airbnb, you’ll love the remoteness that this destination offers. That being said, you’ll have enough wildlife to keep you company and natural wonders like the Kenai Fjords to explore. Maybe you can even find a vacation rental with a hot tub!
Crystal River, Florida
Florida needs no real introduction. It’s well-known for its beaches and pleasant climate, making it one of the most popular vacation rental places during the winter months and a firm favorite among snowbirds.It’s easy to grab a couple of boogie boards and beach chairs and head down to the water.
Needless to say, if you can buy property here, rental demand won’t be a worry. While Key West’s revenue growth might be more promising, AirDNA rates Crystal River’s instability higher.
One of its unique selling propositions is that travelers will be able to swim with manatees. Though, just the pleasant temperature of its waters alone is enough to attract travelers from all over.
Gulfport, Mississippi
It’s not just well-known destinations like Florida that can make worthwhile areas to invest in, but also destinations that attract far less attention like Gulfport. After Jackson, it’s Mississippi’s second-biggest city and offers plenty to do during the day and night. Travelers can enjoy the miles of sandy beaches before they head out to one of its casinos.
One of the biggest attractions for real estate investors is that its typical home value is more affordable than many of the other in-demand areas. This makes it a good choice for those with a smaller budget.
Joshua Tree, California
Joshua Tree is situated only about an hour outside of Palm Springs, easily accessible to Los Angeles, and one of the most popular vacation rental cities in the Coachella Valley.
A report released by AirDNA suggests that if you want to buy a property here, it’s better to invest in a larger place. If you can, for example, find a three-bedroom home, you can increase your revenue potential by more than double.
From stargazing to horseback riding to mountain biking to rock climbing, it offers a selection of activities to cater to all adrenaline levels.
Gatlinburg, Tennessee
Gatlinburg remains a firm favorite destination among Airbnb investors. Each year, thousands of tourists flock to the mountain town to soak in the relaxed atmosphere and enjoy the vibrant nightlife.
It offers a host of attractions that include miles of hiking trails, the longest pedestrian sky bridge in North America, golf, fishing, and a whole lot more. All in all, it’s a great place to buy an Airbnb if you specifically want to target adventure seekers.
Nashville, Indiana
Not to be confused with the capital city of Tennessee, Nashville in Indiana has also earned some fame among real estate investors.
According to data shared by Mashvisor, one of the top Airbnb host calculators, Nashville in Indiana is one of the US cities that offer the highest short-term rental cash on cash returns. Hosts can expect a monthly short-term rental income of about $5,000, with daily rates averaging $260.
If you prefer a quaint town over the hustle and bustle, this can be a great area to consider. In addition to offering specialty and antique shops, there are also a number of music venues, making it a good location if you mainly want to target romantic couples.
Key West, Florida
If you’re set on buying an investment property in Florida, but not keen on Crystal River, you can check out Key West. It offers promising revenue growth and loads of popular attractions – exactly what aspiring Airbnb investors want to hear.
Travelers have the option of enjoying a wide range of water and land activities. From wreck diving to saltwater fishing to enjoying fresh seafood at one of the hundreds of eating and drinking establishments, this tropical island destination will delight all types of travelers.
Reading, Ohio
While Reading’s average short-term daily rate and monthly income are lower compared to Nashville, according to Mashvisor’s data, its occupancy rate is higher. Plus, the median property price is much lower, making it an attractive option for country investors with smaller budgets.
Just a short 15-minute drive from Cincinnati, hosts can also appeal to travelers looking to visit the city where they can explore one of the country’s older zoos or catch a live music performance or baseball match.
Wisconsin Dells, Wisconsin
For hosts looking to cater to families and large groups, Wisconsin Dells can be an attractive option for an Airbnb listing. During the winter, adventure awaits on the ski hill, while the summer months are perfect for cooling off at one of the many indoor or outdoor waterparks. In fact, it boasts the title of “The Waterpark Capital of the World”.
What makes this market such an attractive option to hosts is that it’s generally affordable. According to online data shared by Evolve, median home prices are estimated at about $230,000, making it easier for first-time buyers to get a foothold in the market.
What Special Features Should I Look For?
Once the location of the property has been settled, Airbnb hosts should then look at what sorts of features the available properties offer. Different guests are looking for different property features. Some want a space to relax with a charming dining area.
Some want a tiki bar and a fully-stocked kitchen. While Wi-Fi does not necessarily count as a ‘feature’, it is a very in-demand thing to have in your listing, no matter your target audience. Make sure your guests have easy access to your WiFi
Wrapping Things Up
Spanning nearly 4 million square miles, the United States offers a wealth of opportunities for aspiring Airbnb investors. From mountain retreats to tropical coastal towns to quaint villages, each type of traveler will find a vacation rental that will appeal to their wanderlust.
Not only are travelers spoiled with choice, but also investors looking to buy a property with the goal of turning it into a short-term rental. That being said, aspiring hosts will have to do their due diligence when creating a shortlist of potential real estate markets.
Just because a city offers several in-demand tourist attractions doesn’t mean that it will be profitable for hosts. There are several factors that vacation rental hosts need to keep in mind such as occupancy rate, average daily rate, and local rules and regulations before they choose which cities in which country to explore for Airbnb investment.
Always start by reading up on the current short-term rental regulations. The last thing you want is to crunch all the numbers only to find out that a particular city severely limits the number of nights that a property may be rented out or bans it altogether.
Once you’ve got it all set up, check out iGMS to help you run the business. iGMS can help:
- Access and managing multiple accounts and listings on the top OTAs from a single interface
- Improving communication with automated templates and triggered messaging
- Creating your own direct booking website
- Adjusting your pricing in a smart way through integrations with PriceLabs, DPGO, and Wheelhouse
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