Searching for a house is difficult these days. Is it worth buying as a short-term rental? Yes, but not everywhere, suggests AirDNA's report.
Short-term rental revenues declined in 2023 after two years of rapid growth, but AirDNA researchers expect these revenues to increase again in 2024. To find the 25 best places in the country to buy a short-term rental, they updated their “Index'' of single-family home rental data from Airbnb and Vrbo (source of this week's chart).
You may be surprised, but vacation homes in profitable areas don't necessarily have to be expensive. We found that typical home prices (as calculated from the December 2023 Zillow Home Value Index) are around $160,000 or less in 2 of the 25 neighborhoods listed. 7 for less than $250,000. And in 2017, it was below the national median home price in December (approximately $418,000).
Jamie Lane, chief economist at AirDNA, said: “A big factor is the strong rise in home values in the more traditional vacation rental market, where living and working remotely during the pandemic has been very attractive to people. ” he said. In other words, increased demand in the most popular vacation areas has driven up house prices and reduced rental profits.
As a result, smaller cities that “haven't seen as much growth in home values” are reaping higher returns from short-term rentals, he said.
In fact, expensive areas that are popular for vacation homes and vacations are prominently featured on this year's list, Lane said, citing Joshua Tree, California, Breckenridge, Colorado, and Coachella Valley, California as examples. do not have.
This study only considered markets with 500 or more listings. Areas with laws prohibiting short-term rentals were also omitted. To rank each market, rental demand in 2023 and revenue growth from 2022 onward accounted for half of the score. The other half was primarily based on an “investment value” score, which was derived by comparing typical home prices against potential short-term rental returns.
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