Homeowners who are interested in generating some extra income have been turning to Airbnb for several years. With the service, it is possible for homeowners to rent rooms or even their entire homes to vacationers, tourists, and people in the midst of a relocation. While Airbnb has transformed lives in many places across the country, homeowners in other locations are struggling. Here’s what you need to know.
How People are Using Airbnb to Generate Income
In places where Airbnb is popular, homeowners are able to generate enough income to cover their mortgage payments and still have some left over each month. In fact, in some of these locales, people have invested in second (and even third) homes specifically to rent out through Airbnb to generate even more income. This has worked well for people in many cities across the country, but for others, the profit is hardly worth the effort or the risk.
The Top 10 Most Profitable Cities for Airbnb
Homes.com put together information collected from average daily Airbnb rates and daily mortgage costs in cities across the country. By comparing how much homeowners were able to earn each day through Airbnb rentals to the amount these homeowners paid each day for their mortgages, they were able to discern the 10 most profitable cities for Airbnb. They are:
- Virginia Beach, VA
- Bridgeport, CT
- Charleston, SC
- Albany, NY
- Cape Coral, FL
- Akron, OH
- Jacksonville, FL
- Philadelphia, PA
- Indianapolis, IN
- Cleveland, OH
Virginia Beach leads the country in terms of Airbnb profitability with homeowners here earning $183.33 each day.
The Top 10 Least Profitable Cities for Airbnb
Using the same information and comparing Airbnb daily rental rates to homeowner’s average daily mortgage payments, Homes.com was also able to determine the 10 least profitable cities for Airbnb. These are:
- Sacramento, CA
- Boston, MA
- Denver, CO
- San Diego, CA
- Portland, OR
- Los Angeles, CA
- Seattle, WA
- Honolulu, HI
- San Francisco, CA
- San Jose, CA
San Jose is the least profitable city in the country for Airbnb ventures. Here, homeowners only earn $19.53 each day in profit – not enough to cover cleanup or risk.
Factors that Influence Profitability
Why is it so lucrative to utilize Airbnb in Virginia Beach, but not in San Jose? There are many factors that go into determining profitability, but for the most part, it’s all about mortgage payments and Airbnb rates. In areas where home values and prices are higher, this drives up the cost of monthly mortgage payments – even for homes that are relatively the same in every other way. Another important factor is the location itself and the number of people traveling there. Virginia Beach is one of the country’s prime tourist destinations, but the same cannot be said for San Jose.
If you are interested in utilizing Airbnb to generate some extra income in the DC area, it could be a lucrative undertaking. Airbnb rates are above average, so if you are locked into a low mortgage payment, it is very possible to generate a significant amount of revenue by renting an unused room.