The Best Urban Airbnb Markets In The USA

Since the launch of Airbnb in 2008, vacation rentals have reached new heights and emerged as a more profitable business in the market. Though, keep in mind, running an Airbnb business requires a lot of paperwork and research for it to be successful. More so, multiple factors need consideration like location, occupancy rate, etc, and whether the business is considered profitable or not. It does not make sense to invest time and money in a location that may have a lesser chance of making a profit.

That being said, some cities in the U.S. are profitable while others may not. Therefore, the very first step to starting an Airbnb business is to research locations where the business will thrive. To help you out, we gathered a list of the Best Urban Airbnb Markets in the U.S.A that is mentioned below.

What Are The Factors To Consider When Looking For A Profitable Airbnb Location?

Occupancy Rate

Busy cities with a booming economy ideally attract business travelers and tourists where the demand for Airbnb homes will be constant and high regardless of the season. In most cases, the occupancy rate in these cities will result in higher profits, one of the most important factors for a high return on investment.

Return on Expense

An Airbnb business will succeed if the return on investment is high, cities that have occupancy rates above average and high nightly rates. With that said, one popular way of measuring the return on investment is the capitalization rate where you can compare rental properties in different markets and pick the best one.

Standard Daily Rate

The average daily rate differs from location to location of the vacation rental property. Take note, the better rental income will be if the average daily rate is high and with the combination of high occupancy rate, profitable business it will be.

Rules and Regulations in the City

Due to the overwhelming growth of the Airbnb business in various cities across the world, strict rules and regulations have been enforced on vacation rentals in order to protect residents and avoid disrupting the local housing market. Though, that said, it is important to research locations where Airbnb rules and regulations are more lenient or do not have any restrictions on the vacation rental business by non-owners or investors for Airbnb business to have a chance of succeeding and that will help increase the occupancy rates.

What Are The Best Urban Airbnb Markets in the US?

1. San Francisco, California

San Francisco is one of the most iconic and beautiful cities in the U.S. with its undeniable history, fascinating museums, ravishing beaches, entertainment hub, great neighborhoods, and most of all filled with fun and exciting activities to choose from.

Don't forget, San Francisco is home to its iconic Golden Gate Bridge, Alcatraz Island, and Fisherman's Wharf, and one of the largest and most noteworthy neighborhoods is San Francisco's Chinatown.

That being said, according to real estate analyst firm Redfin, the San Francisco housing market has recently dropped in comparison to last year. Though, predictions expect condo listing and prices could come down and possibly be an opportunity for investors who are keen on buying or investing in a condo.

Market Data:

Average Daily Rate: $ 224 Occupancy Rate: 75% Revenue: $2, 819 Home Value: $1M Median Listing Home Price

2. Denver, Colorado

Denver is an outdoor paradise, also known as the Mile High City situated in the South Platte River Valley. It is home to world-class cultural attractions, a hub for chef-owned restaurants, thriving craft breweries, fiery music scene that produced the biggest and most known music rock bands such as OneRepublic, Fray, etc. all within the reach of the spectacular Rocky Mountain views to the west.

That been said, there are enough reasons for potential real estate investors in considering investing in vacation rentals as it stands among the top ten in quality of life, low taxes, landlord-friendly laws. Moreover, the Colorado housing market has landed the 3rd best state for low property taxes, and the 8th best for high Airbnb rental income.

Market Data:

Average Daily Rate: $164 Occupancy Rate: 80% Revenue: $2, 669 Home Value: $525K Median Listing Home Price

3. Los Angeles, California

Los Angeles, California is the entertainment capital of the world and home to over 100 museums, a thriving culinary scene, a tempting shopping spree, fun-family attractions such as the Walk of Fame's collection of stars, Disneyland, Universal Studios, and so much more. California is culturally diverse and has drawn aspiring actors and actresses from all over the world.

Moreover, Los Angeles has hosted Summer Olympics twice. Apart from that, the city boasts idyllic weather where sunseekers enjoy the warm climate and beaches. That being said, there are plenty of reasons as to why real estate investors are keen on this city. Though, keep in mind, California's housing market is slowly rising hence high rents. According to C.A.R.'s December 2021 resale housing report shows Los Angeles saw moderate demand in December and the sales of existing single-family homes were up 9.2 percent in comparison to the previous month.

Market Data:

Average Daily Rate: $197 Occupancy Rate: 67% Revenue: $2, 371 Home Value: $949K Median Listing Home Price

4. New York, New York

New York is where dreams are made of. It is home to numerous famous sites such as the Statue of Liberty, Times Square, Tall Skyscrapers, Central Park, Broadway Shows, historic neighborhoods, shop and dine, and world-famous museums. Exploring New York is delightful especially when the best places are just within walking distance of each other or a short ride away.

Investing in New York is mostly out of reach for many New Yorkers though, if you play your cards right, the benefits are long-term such as passive income and equity growth that might sustain for years.

Market Data:

Average Daily Rate: $194 Occupancy Rate: 68% Revenue: $2, 282 Home Value: $859K Median Listing Home Price

5. Portland, Oregon

Portland is the largest city in the U.S state of Oregon and one of the few cities that are committed to going green. It is known for its scenic landmarks, thriving art spots, great coffee, food paradise, famous Saturday Markets in Portland's Chinatown, cycling, and European-style public transport.

Portland's housing market remains competitive though take comfort that a few investors are competing and finding a property based on your criteria could take time. Needless to say, investing in Portland is profitable depending on the neighborhood location which is the key to your success.

Market Data:

Average Daily Rate: $133 Occupancy Rate: 82% Revenue: $2,123 Home Value: $500K Median Listing Home Price

6. Boston, Massachusetts

Boston is one of the popular cities in the U.S and is known for its cultural attractions, the famous Fenway Park, The Boston Marathon, quality of life, parks, and museums. That being said, Boston's real estate market has skyrocketed and the demand for rental properties is increasing.

Moreover, Boston's real estate market is so diverse that is always in demand and is landlord-friendly in comparison to other markets.

Market Data:

Average Daily Rate: $210 Occupancy Rate: 67% Revenue: $2,737 Home Value: $799K Median Listing Home Price

7. Dallas, Texas

Dallas is the largest, modern, and most populous city in the state of Texas that is situated in North Texas. Dallas is the perfect blend of the contemporary and the culture that has brought a huge significance to the city. If you remember the assassination of John F. Kennedy's visit in 1963 putting Dallas in the spotlight. But apart from that, the city offers a huge art and music scene, AT&T stadiums, Stone Street Gardens, Six Flags over Texas, and so much more.

Investing in Dallas is considered a great opportunity as it has the lowest homeownership rate in the U.S. and there is a high demand for rental accommodations. According to Jeff Rhode, Dallas is one of the most recognizable and buzzworthy metropolitan areas in the U.S.- if not the world- and is considered a quasi-getaway city for investors looking for dependable, liquid real estate environments.

Market Data:

Average Daily Rate: $147 Occupancy Rate: 64% Revenue: $2, 015 Home Value: $398K Median Listing Home Price

8. Honolulu, Hawaii

Do you remember the movie 'Pearl Habor'? If so, that scene was taken in Hawaii known for its romance, volcanoes, surfing, and tropical climate. Honolulu is the perfect getaway and has welcomed 190, 491 tourists on any given day in May 2021.

That being said, the Hawaii housing market is relatively expensive in comparison to other markets in the U.S. Though, with high demands in housing, the rental is increasing which makes a good opportunity for investors to think about. According to Cord Collins, with such a low supply of units, and prices likely to stay high, the environment for investment in rental properties looks good.

Market Data:

Average Daily Rate: $193 Occupancy Rate: 80% Revenue: $3, 236 Home Value: $650K Median Listing Home Price

9. Phoenix, Arizona

Phoenix, Arizona is the fifth most populous city in the nation and earned its nickname- the Valley of the Sun. The city boasts year-round warmth and sunshine, historical sights, and modern architecture. Phoenix is also home to a variety of attractions such as Hot Air Balloon Rides, Heard Museums, Desert Botanical Garden, Tempe, and so much more.

That being said, Phoenix is one of the best cities for investors to consider. Not only it is an affordable housing market in comparison to other major housing markets in the U.S., but it is also a great opportunity for new Airbnb hosts. According to the spokesperson for Airbnb, Sam Randall, 'New hosts in Phoenix have earned $6.3 million in the first six months of the year'.

Market Data:

Average Daily Rate: $164 Occupancy Rate: 71% Revenue: $2, 303 Home Value: $442.9K Median Listing Home Price