February 16, 2024

Best Places To Buy AirBnB Properties

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Life can be quite good financially if you venture into the vacation rental industry by buying Airbnb properties and thus becoming an Airbnb host. So what are the best cities in the U.S. for Airbnb investing in 2023? That’s not an easy question to answer, especially since so many Airbnb markets are ideal for owning short-term vacation rental properties. Location is an important consideration in the real estate industry. It is even more crucial when it comes to owning an Airbnb property for vacation rental purposes and steady Airbnb income. Most existing Airbnb hosts would have since realized that a correlation exists between their choice of US cities and consistent profit from rental income.

From Airbnb occupancy rates to local ordinances and short-term rental regulations, various factors need to be considered before converting that your beach house, a one-bedroom condo, or a two-bedroom home into a vacation rental. Top analytics company AirDNA has used real estate data on Airbnb and Vrbo property-level performance to create an index of the best markets for investment in 2023. The ranking is based on what they call “investor score” which is derived from key variables such as rental demand, revenue growth, investability, and regulation.

Below are the most profitable cities to buy Airbnb investment property in 2023.

Fairbanks, Alaska

Rental demand and high investability are the major factors that propel the “land of the midnight sun” and  Alaska's second-largest city to the top position of the best cities for Airbnb investments in 2023 with an investor score of 93. Notable attractions for visitors include the aforementioned midnight sun, aurora borealis, and national parks. Fairbanks also offers outdoor activities such as hunting, fishing, and hiking. The average full-time vacation rental property in Fairbanks earns $49,000 per year and an average daily rate (ADR) of $198.

Evansville, Indiana

Indiana’s third largest city located along the  Ohio River gets an investor score of 90 to rank second on the list of most profitable cities for Airbnb investing. The city’s investability score and rental demand stand at 93.1 and 80.4 respectively, helping to make it one of the best Airbnb markets in the US.  Evansville is the county seat of Vanderburgh County as well as the social and economic hub of a region that includes Southwest Indiana, Southeast Illinois, and Northwest Kentucky. Seekers of affordable properties will find Evansville a great destination since it boasts a relatively low home value of $116,000, (the lowest on the list), and with an ADR of $129, full-time short-term rental property owners here can expect to earn a rental income of $27,000 per year, on average.

Rich in historic sites and cultural landmarks Evansville attracts visitors from miles away to destinations such as the Mesker Park Zoo and Botanical Gardens (Indiana’s first and largest zoo), African American Museum, Wartime Museum, Reitz Home Museum, USS LST Ship Memorial, the Angel Mounds State Historic Site, and the Evansville Museum of Arts, History and Science.

Rockford, Illinois

Rockford welcomes visitors with a mix of history, art, and natural beauty. Known as the Forest City, Rockford boasts its fair share of attractions. It is home to pleasant sightseeing locations such as The Anderson Japanese Gardens, Nicholas Conservatory and Gardens, the Rockford Art Museum, Midway Village & Museum Center, the Burpee Museum of Natural History, and more.

These diverse attractions help Rockford have an occupancy rate of 60.9%, a $175 ADR, and an average annual rental income of $39,000. It also enjoys the second-highest revenue growth score on this list (99), which adds to its investment potential. Together with a relatively low average home price of $117,000, Rockford has the potential for a low-cost Airbnb investment with plenty of cash flow.

Springfield, Illinois

An outstanding investability score of 95 and rental demand score of 92 contribute to Springfield's fourth place on this 2023 best Airbnb investment list. The U.S. Census Bureau estimates the population of Illinois's capital city and the county seat of Sangamon County. to be 113, 273 as of July 2022. If you are among real estate investors searching for a short-term rental property market where initial investment costs are low, then Springfield, the hometown and resting place of President Abraham Lincoln is highly recommended. The average home value here is $118,000, one of the lowest on the list. Even with an ADR of $133 which is relatively lower than those of some other locations on the list, Springfield’s average occupancy rate of 61.5% enables full-time homes to generate an average rental income of $29,000 annually.

Owners of short-term rental properties in Springfield welcome guests from far and near to behold timeless treasures of American history, such as the Lincoln Tomb and War Memorial, Abraham Lincoln Presidential Library and Museum, Lincoln Memorial Garden, Lincoln Home National Historic Site, and Illinois State Museum.

Burdett, New York

Burdett is a small picturesque New York town that ranks high on the 2023 best Airbnb markets list with a very impressive investability score of 99.6. Average annual rental income here stands at $77,000 for full-time listings while home values average $244,000. Apart from its pleasant small-town atmosphere, Burdett offers some charming attractions for visitors, including a host of wineries, the Hector Falls, and the Seneca Harbor.  With an ADR of $345, guests will easily pay premium prices to have a feel of the beauties offered by this quiet scenic paradise.

Williamstown, Kentucky

The county seat of Grant County, Kentucky, Williamstown is the home of the Ark Encounter, the one-of-a-kind life-size Noah's Ark-themed attraction. The town is also home to the Ararat Ridge Zoo and the 330-acre Williamstown Lake, the largest lake in Northern Kentucky where visitors enjoy various water sports.

Like Burdett, Williamstown also offers a small-town atmosphere as well as great bluegrass music, and good food. Brimming with Southern hospitality, Williamstown boasts an occupancy rate of 69.3%, as well as impressive investability, and rental demand scores of 100 apiece, which are crucial in its ranking as one of the best places to buy Airbnb properties. Its relatively low home values ($179,000) make it a budget-friendly destination.

New Haven, Connecticut

A high rental demand of 91.5 and revenue growth of 88.7 makes New Haven Connecticut a prime destination for prospective short-term rental owners. Despite a relatively higher home value of $261,000, full-time average short-term rental income in New Haven can reach $49,000 per year. The population estimate as of July 1, 2022, was 138,915.

Visitors will be thrilled with the rich historical and modern cultural attractions in New Haven, some of which include the New Haven Museum, Yale University, Yale Center for British Art, Yale University Art Gallery, Yale Peabody Museum of Natural History, Little Italy, and more. The city also boasts diverse food, including delicious pizza, and beautiful parks.

Ellsworth, Maine

The entrance of Acadia National Park is just 15 miles from Ellsworth, making the town a popular abode for guests wishing to visit the park and one of the best Airbnb locations in the U.S. If you are visiting the park, you can rely on Ellsworth for key vacation needs such as large grocery stores, and restaurants. The town even boasts an L.L. Bean outlet and other attractions such as the Telephone Museum, Stanwood Homestead Museum, and Bird’s Sanctuary. Ellsworth’s relatively lower home value of around $267,000 is a great opportunity for investors looking to acquire Airbnb properties in proximity to the popular park (the average home value in popular cities on nearby Mount Desert Island, where the park is located is over $500,000).

Moreover, the extension of the tourism season from May through to the end of October has become beneficial to Ellsworth. A 72.8% occupancy rate over the past year and an average annual rental income of $67,000 help give the town a high investor score of 84.7.

Cheboygan, Michigan

Cheboygan’s location on the shores of Lake Huron makes it a perfect place for short-term rental investors hoping to offer their guests an exemplary Northern Michigan experience. Visitors can engage in outdoor activities such as boat rides and fishing on Lake Huron and the nearby Straits State Park, as well as enjoy community and cultural attractions like the Cheboygan Opera House, Cheboygan State Park, Cheboygan County Historical Society, and Sea Shell City. Lovers of winter sports will cherish nearby ski resorts and snowmobiling trails.

Cheboygan also connects to other tourist destinations in Michigan, for instance, Petoskey and Mackinac Island. The town’s $304 ADR enables full-time homes here to generate an average rental income of $69,000 per year which is not bad considering that the average home value is just $205,000.

North Woodstock, New Hampshire

The village of North Woodstock is located in the heart of New Hampshire’s scenic White Mountains region. Its place on the 2023 Airbnb investment list is largely due to an impressive investability score of 91.2. The average home value here is $285,000 meaning that full-time listings are likely to earn an average of $63,000 per year on rental income, and an average daily rate of $293.

In addition to its natural beauty, a broad range of outdoor activities await visitors to North Woodstock. Among such activities include biking, fishing, skiing, and hiking. There are also the stunning views offered by the nearby White Mountains, Lost River Gorge and Boulder Caves, Kancamagus Highway, and Cascade Falls, all of which rank among must-sees for visitors looking to unwind in small-town charm while enjoying a taste of New England culture.

Montgomery, Alabama

Montgomery is the capital city of the U.S. state of Alabama, the county seat of Montgomery County, and an epitome of Southern hospitality. From a telegram that began the Civil War to a city bus seat that birthed the Civil Rights Movement, Montgomery has a notable place in America’s culture and history.

The city earned its position as one of the hottest Airbnb markets in 2023 with an investability score of 95.2. Montgomery's relatively low home value of $123,000 means that it's a budget-friendly option. Full-time vacation rental properties can earn an average annual rental income of $30,000 per year here. If you’re looking for history, then find your way to Montgomery to explore sites such as the Rosa Parks Museum and Children’s Wing, Hank Williams Museum, Old Alabama Town, Civil Rights Memorial and Center, the First White House of the Confederacy, Alabama State Capitol, Dexter Parsonage Museum and the Dexter Avenue King Memorial Baptist Church where Dr. Martin Luther King Jr., commenced his preaching career.

Two Harbors, Minnesota

Two Harbors Minnesota is located around two bays on the North Shore of Lake Superior – Agate Bay, and Burlington Bay. The picturesque city enjoys steady rental demand (92.9 on the ranking) from guests looking to be part of the great Northwoods of Minnesota. Homes in Two Harbors have an average value of $245,000, and full-time properties earn $72,000 per year, on average, allowing the city to boast a strong investability score of 98.9 to rank among the most popular Airbnb locations.

The natural beauty of the Lake Superior shoreline, the Superior Hiking Trail, the Superior National Forest Split Rock Lighthouse State Park, and Gooseberry Falls State Park all provide a pleasant experience for visitors. There are also various outdoor activities such as boating, fishing, rock climbing, and golfing.

Gainesville, Florida

Gainesville is one of the best places to buy vacation rental property in Florida. 2023 marks its second consecutive year on the AirDNA list. Located in Northern Florida, Gainesville has been described as a place “where nature and culture meet.” Attractions to behold in the university town include the butterfly rainforest, the Florida Museum of Natural History, and Kanapaha Botanical Gardens, among others.

Typical home value here is $234,000 while annual average rental income is $46,000. Gainseville the city earns a modest investability score of 77.8, 69.6 in revenue growth, 56% occupancy rate, and an ADR of $218. The population estimate as of July 1, 2022, was 145,214.

Saint Ignace, Michigan

Nestled between two Great Lakes ( Lake Michigan and Lake Huron), and just 20 minutes north of Cheboygan, Saint Ignace is an ideal location for short-term rental investment in the Upper Peninsula. Guests can enjoy plenty of outdoor activities like hunting, fishing, hiking, and kayaking. There are also local shops, parks, and restaurants for those wishing to explore the city. The area is known for its rich cultural life with a variety of festivals and events all year round, for example, the Mackinac Bridge Walk and the Annual Native American Festival.

With an average home value of $166,000 and an average annual rental income of $50,000, Saint Ignace earns a remarkable investability score of 99.2. Trailing twelve months occupancy level stands at 62.1%, on average, albeit the town records a steady stream of visitors all through the year. Also, the demand for rental properties in Saint Ignace is high, hence a respectable 83.7 rental demand score.

Bardstown, Kentucky

Kentucky is renowned for its bourbon, and probably nowhere in the state is there more bourbon than in Bardstown, the self-acclaimed Bourbon Capital of the World where nearly 3 million barrels of bourbon are aging. 11 bourbon distilleries are located within 16 miles of downtown Bardstown, about 55 miles southwest of Frankfort, the capital of Kentucky. Bardstown is Kentucky’s second oldest city and the seat of Nelson County.

The town is a good location for short-term rental investors seeking to host guests in a location that boasts an eclectic blend of Kentucky history, culture, and nature. Visitors love to experience Bardstown’s bourbon heritage and distilleries along the Kentucky Bourbon Trail in addition to exploring historical sites and other landmarks as well as having fun with outdoor activities in the beautiful countryside.

With a high investability score of 96.7 and revenue growth of 93.1, Bardstown is a profitable real estate investment destination. Moreover, its relatively low average home value of $182K makes it a more affordable option. An ADR of $206.05 means that real estate investors can expect an average of $42,296 per year as rental income when listing full-time.

South Bend, Indiana

South Bend, is a city beside the St. Joseph River in Indiana. It is popular for being the location of the University of Notre Dame. Adventure seekers here can whitewater raft through downtown while food lovers can savor international cuisine with fresh ingredients and wet their whistles with a local brew. Sports fanatics can catch a game in a ballpark. Attractions popular with guests include the above-mentioned University of Notre Dame, Studebaker National Museum, Notre Dame Stadium, Basilica of the Sacred Heart, and Grotto of Our Lady Lourdes.

South Bend is a growing short-term rental market that has a high revenue growth score of 91.8 and an average daily rate of $414.78. The average home value in the city is $235,000 while properties earn an average rental income of $59,000 per year, the reason why the city earns a high investability score of 95.3.

Kalamazoo, Michigan

A high rental demand score of 90.2 and an investability score of 96.7 position Kalamazoo as a prime destination for short-term rental properties in southern Michigan. The main draw for the city’s tourists are its charming downtown area, a diverse food and drinks industry, and proximity to popular locations like Lake Michigan. The Kalamazoo Nature Center is a great destination for outdoor recreation while lovers of arts and culture will enjoy visiting the Kalamazoo Institute of Arts to learn more about the city. With an average home value of just $157, 000 on average, Kalamazoo is yet another of the more affordable options. An ADR of $181 means that short-term rental hosts can generate an average of $40,000 per year as full-time property rental income.

North Charleston, South Carolina

North Charleston’s role in the Civil War and American Revolution makes it a vital component of U.S. history. The presence of the Charleston International Airport ensures a convenient travel destination for all visitors. The town boasts a high rental demand score of 93.2, an ADR of $229, an average home value of $252,000, and an average full-time property rental income of $53,000 per year.

Top attractions here include the North Charleston Coliseum, Performing Arts Center, Golf Club at Wescott Plantation, City Art Gallery, National Outdoor Sculpture Competition & Exhibition, Riverfront Park, Wescott Park, and the North Charleston Fire Museum.

Logan, Ohio

The county seat of Hocking County, Ohio, Logan is located deep in the picturesque woods of the Hocking Hills region. Known for its friendly locals, breathtaking natural beauty, and charming atmosphere, Logan is a destination that must be on every traveler’s bucket list. The town offers a variety of outdoor activities such as fishing in Lake Logan, camping, hiking, and rock climbing. There are also state parks and other attractions such as the Rock House, Old Man's Cave, Cedar Falls Hiking Trail, and Ash Cave. The city holds annual events and festivals like the Logan Washboard Arts & Music Festival and the Hocking Hills Indian Festival.

For short-term rental investors, Logan has a high investability score of 99.8, and homes have an average value of $208,000 while rental income for full-time properties is $74,000 per year, on average. The town’s 58.7% occupancy rate and average daily rate of $322 means that short-term rentals here provide an enticing bang-for-buck return.

Augusta, Georgia

Augusta is an eclectic city that is both historic and modern. The Augusta National Golf Club hosts an annual Masters Golf Tournament that attracts top golfers and other enthusiasts from all over the world. Golf aside, Augusta has so many other features that will thrill any visitor. These include historical sites and monuments such as the Augusta Museum of History, and Augusta Canal National Heritage Area. The Augusta Heritage Festival is one event most visitors will love. You can also indulge in outdoor recreational opportunities like the Phinizy Swamp Nature Park, and visit the Augusta University.

Short-term rental investors will be happy that the Augusta market offers a high revenue growth score of 99.3 and an investability score of 86.7. Considering that home values average $191,000, full-time property hosts can earn $40,000 annually, on average, and an ADR of $313.

Akron, Ohio

Akron is the fifth-largest city in Ohio and the county seat of Summit County. It is located on the western edge of the Glaciated Allegheny Plateau, around 40 miles south of downtown Cleveland. With a decent revenue growth score of 88.5 and a relatively low average home value of $141,000 Akron is an attractive investment market where properties can generate an average of $33,000 per year in rental income.

The city draws in visitors with diverse attractions such as the historic Stan Hywet Hall & Gardens, Akron Zoo, the Contemporary Akron Art Museum, Akron Civic Theater, and the scenic Cuyahoga Valley National Park. It also boasts several outdoor activities such as biking, hiking, golfing, and fishing. Festivals and other tourist-friendly events are also held here throughout the year.

Harrisburg, Pennsylvania

Located along the Susquehanna River, Harrisburg is the capital of the Commonwealth of Pennsylvania and the county seat of Dauphin County. Its population as of July 1 2022 was 50, 183. The city has a high rental demand score of 94.4 and a modest average home value of $187,000. It is a place where visitors come to see historical landmarks such as the National Civil War Museum, State Museum of Pennsylvania, and State Capitol Building. Tourists also love the city's proximity to other popular tourist destinations such Gettysburg and as Hershey. Like other U.S. towns, there are a variety of outdoor activities to enjoy here. How about hiking in Wildwood Park, watching a baseball game at FNB Field, or attending events like the Harrisburg Symphony Orchestra or the annual Kipona Festival?

Cleveland, Ohio

Cleveland is located in Northeast Ohio along the southern shore of Lake Erie and across the U.S. maritime border with Canada. It is the county seat of Cuyahoga County. The city’s famous cultural institutions make it an attractive destination for short-term rental investors and tourists. Some of these attractions include the Rock and Roll Hall of Fame, Cleveland Museum of Natural History, Cleveland Museum of Art, Cleveland Orchestra, Cleveland Guardians (formerly the Cleveland Indians), and Cleveland Browns.

Cleveland offers a high investability score of 89.2 and a relatively low home value of $167,000. Average full-time vacation rental properties generate $35,000 per year and an ADR of $181, contributing to a strong revenue growth score of 79.7.

Waco, Texas

An investability score of 97.7 ranks Waco among the best Airbnb markets in the U.S.  Known as the heart of Texas, full-time short-term rentals in the county seat of McLennan County can earn an average of $52,000 per year. Waco also has a solid occupancy rate of 58.1% and an ADR of $243. The average home value here is $190,000.

The Magnolia Market at the Silos is the main attraction that lures visitors to Waco. Visitors can also explore the Waco Suspension Bridge, a historic bridge offering stunning views of the Brazos River as well as the Dr Pepper Museum which was invented in Waco. Other popular attractions include the Waco Mammoth National Monument, the Cameron Park and Zoo, the Texas Ranger Hall of Fame and Museum, the Mayborn Museum Complex, and the Waco Downtown Farmers Market. The presence of Baylor University makes the city popular with fans of collegiate football.

Indialantic, Florida

Indialantic is a small coastal town in Brevard County, Florida that comes in as one of the most popular Airbnb destinations for investors in 2023. The town's name is a portmanteau derived from its location between the Indian River Lagoon and the Atlantic Ocean. Visitors come here to experience its beautiful beaches, including the Indialantic Beach and Nance Park. Water activity lovers can take part in boating, swimming, fishing, and surfing. The nearby Sebastian Inlet State Park is ideal for hiking and bird-watching. There are also events and festivals such as the Indialantic Art & Seafood Festival, as well as major nearby attractions like the Kennedy Space Center, the famous Cocoa Beach, and the Melbourne Beach.

The high occupancy rate of 70.2%, high rental demand score of 87.6, and high revenue growth score of 93.8 will be of benefit to short-term rental investors. Even with a relatively high home value of $479,000 (the highest on the list), full-time short-term vacation rental properties can earn a remarkable average rental income of $84,000 per year.

Let Steadily Insure Your Airbnb Investment Property

As an Airbnb host, there are several things you can benefit by taking up rental or landlord insurance coverage. For instance, rental insurance protects you from legal liabilities, natural disasters, and even damage to your furnishings. As the top-rated landlord insurance firm in the U.S., Steadily provides clients with fast, affordable Airbnb insuranceservices. From Fairbanks, Alaska to Indialantic, Florida, you can always trust Steadily for the best possible coverage for your Airbnb rental property.

This post is for informational purposes only and does not serve as legal, financial, or tax advice. Consult your own legal, financial, or tax advisor for matters mentioned here. Steadily is not liable for any actions taken based on this information. If you believe any of this information may be inaccurate please contact us.

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