The Best Big USA Cities for an Airbnb Investment
The USA is a country where Airbnbs truly prosper. It is a great choice for an investment in short-term vacation rentals, as it offers everything required for a successful business. The legislation regarding Airbnb is mild in most states, and the diversity of markets granted by the sheer size of the country allows the investor to find a perfect city for their business.
The Best Airbnb Investment Cities and their Metrics
Choosing a specific city, however, might be rather tricky. There are numerous cities suitable for a business across the US, but each of them has different market conditions. Some cities are popular among tourists, while others are mostly populated and visited by US citizens. The choice has to be informed and to make it easier, we have prepared this list of cities: there, hosts make from $1,734 all the way up to $4,388 worth of monthly Revenue.
| Cities | Revenue |
| Kissimmee | $4,388 |
| San Diego | $4,363 |
| Scottsdale | $4,056 |
| San Francisco | $3,536 |
| New York | $3,470 |
| Fort Lauderdale | $3,351 |
| Miami | $3,315 |
| Los Angeles | $3,229 |
| Las Vegas | $3,223 |
| Austin | $3,181 |
| Seattle | $2,958 |
| Denver | $2,982 |
| Chicago | $2,941 |
| Washington D.C. | $2,845 |
| Phoenix | $2,496 |
| San Antonio | $2,297 |
| Dallas | $2,262 |
| Tampa | $2,175 |
| Atlanta | $2,096 |
| Philadelphia | $2,062 |
| Houston | $1,734 |
New York
New York is one of the most popular destinations for internal and international tourists across the United States of America. Needless to say, such a demand creates perfect conditions for the short-term rental industry. The main benefit New York grants to its entrepreneurs is the stability of the market, whereas its key downside is the unprecedentedly high level of competition: right now, there are more than 27,800 properties actively operating there.
The Average Daily Rate is higher than in most other cities of the US, as it equals $238. Occupancy Rates average 76% throughout the year. There is some level of seasonality too, as the Occupancy Rates reach their lowest level of 45% in January and their highest level of 90% in September. The average monthly Revenue here is $3,470.
Miami
Miami is the next city on our list, and it is also a great choice for an investment. The seasonality’s effect on business here is sufficient, as most visitors come to Miami in spring and summer, leaving it in fall. Nevertheless, the seasons of high demand seem to cover the others for the entrepreneurs in Miami, as there are more than 13,000 active rentals there.
The rates here are almost the same as in NY, as the ADR of properties is $230 in Miami. The Occupancy Rates reached the lowest point of 53% in September, growing all the way up to 82% in February. The annual average Occupancy Rates in Miami are 67%, which allows local hosts to earn $3,315 worth of monthly Revenue.
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Las Vegas
Las Vegas is another extremely popular destination both among Americans and visitors from other countries. The main benefit it offers is the stability throughout the year, as there is almost no seasonal effect on the short-term rental business. The market is rather competitive, as there are around 12,500 active Airbnbs in Las Vegas.
The Average Daily Rate here is $245, while the Occupancy Rates average 60% throughout the year. Such a combination of parameters allows the properties in Las Vegas to generate $3,223 worth of monthly Revenue, which is more than in most other cities of the USA.
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Houston
Houston is a bit less popular among foreign tourists, which has a clear effect on the Revenues of hosts here. Nevertheless, it might be a decent choice for a low-risk investment, as the market here is also very stable. The competition is rather moderate in Houston, as the city is home to 11,800 active rentals.
The rates in Houston are expectedly lower than with the previous cities: the ADR here is $151. The Occupancy Rates average 50% throughout the year with almost no seasonal effect. The monthly Revenue of an average Airbnb is Houston $1,734.
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Atlanta
Atlanta offers investors a market with almost the same conditions as in the previous city. There are 10,200 listings in Atlanta, the vast majority of which are entire homes. The city might not be as attractive to investors, as the market is shrinking by 4% quarterly. Nevertheless, there are some districts of Atlanta that might become great places for a successful business that would outperform the average metrics.
Speaking of them, the ADR in Atlanta is $172. Combined with annual average Occupancy Rates of 53%, it results in local hosts earning $2,096 worth of monthly Revenue. The city is slightly more popular in summer, although the seasonal effect is not too significant.
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San Diego
In contrast to Atlanta, hosts in San Diego generate a lot more Revenue every month. The city is moderately competitive, as there are around 10,600 short-term rentals operating there. The main benefit of San Diego in terms of an Airbnb investment is its seasonal demand: the flow of tourists in summer brings in huge revenues.
The Average Daily Rates in San Diego grew from $237 in January all the way up to $321 in July, averaging $265 throughout the year. The annual average Occupancy Rates are 77% here, reaching 90% in July. The monthly Revenues reach their peak of $6,556 in July and their lowest point of $2,985 in January, averaging $4,363 throughout the year.
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Los Angeles
The next city in California is Los Angeles, and it might also become a perfect place to start a rental business. The competition here is almost the same as in most cities that were reviewed before: there are around 10,500 active Airbnbs in L.A.
The ADR here is $232, while the annual average Occupancy Rates are 73%. The seasonal effect is insignificant here, although the rentals reach their best performance in October. On average, hosts in Los Angeles earn $3,229 worth of Revenue per month.
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Austin
Moving to Texas, Austin is another peculiar place for Airbnb investors. It is a calm city with sufficient numbers of tourists visiting it in spring. Even though there are 10,200 active properties here, much like in the previous cities, some districts of Austin are almost competition-free. It is also one of the few markets of this scale that are still growing in the USA.
The ADR in Austin is $235, while the Occupancy Rates average 63% throughout the year. There is a spike of popularity in spring, where the listings are booked 72% percent of the time, although the effect is not dramatic. The properties in Austin generate $3,181 worth of monthly Revenue, but the performance will significantly depend on the chosen district.
Chicago
The only city from Illinois on our list is Chicago. It has one of the fastest-growing rental markets on the list, as the quarterly growth here is 6%. Even though the Revenues here are lower than in some other cities, the competition is milder, which might be an important factor for many investors.
The ADR in Chicago is $198, while the Occupancy Rates are 67%. The seasonal effect here is rather significant: the properties reach their peak performance in July, whereas the least successful season is winter. The average Revenue generated by Airbnbs in Chicago is $2,941 per month.
Philadelphia
Philadelphia offers even better conditions in terms of the competition in the city: there are only 5,909 active properties here. Moreover, some of the districts have almost no active rentals at all. The city’s market is stagnating, but there is surely more room for rentals in some parts of Philadelphia.
The ADR in this city is $159. Combined with the Occupancy Rates of 57%, they allow the hosts in Phili to earn $2,062 worth of monthly Revenue. The city is slightly more popular in summer than it is in winter, but the seasonality is moderate.
Phoenix
Moving to Arizona, Phoenix is another city with an extremely rapidly growing rental market: the quarterly growth here is 8%. In total, there are 6,300 active Airbnbs here, and there is surely room for more, as some parts of the city are not as densely populated with properties.
The ADR in Phoenix averages $186 with slight deviations throughout the year. The annual average Occupancy Rates are 67% in this city, which results in local hosts receiving Revenues of $2,496 per month.
San Antonio
San Antonio is another city in Texas that might interest some investors. The main benefit it might offer to entrepreneurs is the stability of the market and relatively low levels of competition. There is almost no seasonal effect on business in San Antonio, and the city is home to only 5,600 vacation rentals.
The ADR here is $172, and the Occupancy Rates are 61%. The Revenue, averagely generated by a property in San Antonio is $2,297 per month. It is lower than the Revenues in some other cities, but it is an investment with a much lower risk.
Scottsdale
Scottsdale is located right next to Phoenix that was reviewed before. Their markets have both similarities and differences. The former includes an extreme level of growth: the market increases by 11% every quarter. The latter includes the financial metrics, which are significantly better in Scottsdale. In total, there are around 6,800 rentals here.
The ADR in Scottsdale is $317, which is almost twice as high as the same metric in Phoenix. Surprisingly, this does not have a significant effect on the Occupancy Rates, as they average 63% throughout the year. Such a dramatic difference in rates results in a similar difference in Revenues. The properties in Scottsdale generate $4,056 worth of Revenues every month.
Fort Lauderdale
Fort Lauderdale is a city near Miami that has a similar market but with a milder level of competition. It is home to around 7,000 Airbnbs that are currently in operation. Most of them are located on the shore, so in some districts, there are almost no competitors.
The ADR in Fort Lauderdale is $237, and the Occupancy Rates average 68%. This allows the properties to generate $3,351 worth of Revenue per month, which is a lot higher than in most cities of the US.
Kissimmee
This city is located right next to Orlando and becomes a great alternative for many visitors. In terms of starting an Airbnb business, this is an extremely attractive place, as the Revenues here are outstanding. The competition, however, corresponds to it, as there are almost 27,000 listings associated with the city. The ADR here is $275, and the Occupancy Rates are 73% despite all the competition. The Revenues average $4,388 per month in Kissimmee.
Tampa
This is another city in Florida located on the shores of Tampa Bay. It is home to 5,200 rentals, making it a relatively small market. The performance of these properties is still decent. The ADR of $160 and Occupancy Rates of 60% allow local hosts to earn $2,175 worth of monthly Revenue. The business in Tampa is seasonal, reaching its peak in spring and its lowest point in fall.
Seattle
Taking into account the popularity of Seattle, the number of Airbnbs here is surprisingly low, as there are only 6,200 properties operating in the city. The market faces a quarterly growth of 6%, which clearly signifies that there is room for more enterprises. The Occupancy Rates of 77% confirm it, while the Average Daily Rates of $185 allow local Airbnbs to generate $2,958 worth of Revenue every month.
Denver
Denver has a similar market, although it is not growing as rapidly. There are 5,200 rentals in operation in Denver, which is still rather low, considering the large area of the city. There is a seasonal effect for short-term rental enterprises, as the demand reaches its peak in June. The ADR in Denver is $178, and the Occupancy Rates average 77% throughout the year. The estimated Revenue of a rental property in Denver is $2,982 per month.
Dallas
Dallas also has a mildly-competitive market that is growing slowly. There are 5,600 properties actively operating here, the vast majority of which are concentrated around the city center. The hosts charge $165 for a day here, which results in a decent Occupancy Rate of 60%. Dallas is not as popular as some other cities, so the average Revenues here are $2,262 per month.
Washington D.C.
The capital of the United States of America might also become a great place to start an Airbnb enterprise. The main benefit it offers to investors is the relatively mild competition. There are only around 4,700 short-term rentals in Washington D.C. The market is currently stagnating, but some districts of the city still have enough room for new players.
The business in Washington D.C. is rather stable throughout the year. The ADR is $180 here, while the Occupancy Rates average 75%. This enables the local Airbnbs to generate $2,845 worth of monthly Revenue.
San Francisco
San Francisco is the last city on our list, but it is surely not the least. It is a universally decent place for investment. The seasonality here is moderate and so is the competition. There are currently around 5,100 listings published in the city, 65% of which are entire homes and the remaining 35% are private rooms.
The Average Daily Rate in San Francisco is $249. Even with such a high rate, the Occupancy Rates average 79% here, granting the hosts in the city $3,536 worth of monthly Revenue. The market faces a 2% quarterly growth, meaning there is still more room for new entrants here.
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