With the rise of short-term rentals like Airbnb, real estate investment into properties for this purpose has become increasingly lucrative. However, not all locations provide the same return on investment. When looking for the best airbnb investment locations in 2023, key factors like tourism growth, local regulations, and real estate prices need careful analysis. By examining the data and trends around these metrics, investors can identify markets poised for strong Airbnb performance. Nationwide, popular destinations like Florida and Hawaii remain safe bets, while up-and-coming areas to watch include Texas and Tennessee. Overall, the most profitable airbnb investment locations will balance high tourism/traveler demand with ownership costs and local rules that still enable ample hosting income.
Coastal Florida and Hawaii Remain Strong Markets for Airbnb Investment Locations
Traditional vacation hot spots like Miami, Key West, Honolulu, and Maui have long been top urban and resort destinations that attract millions of leisure travelers each year. In terms of airbnb investment locations, these areas offer built-in demand and high occupancy rates for local short-term rental properties, according to data from AirDNA. For instance, Miami Beach had a 73.2% occupancy rate with $283 average daily rates for Airbnbs in 2022. While real estate and regulatory costs can be a factor, for investors focused on maximizing occupancy, popular coastal markets in Florida and Hawaii remain reliable airbnb investment locations.
Major Texas Cities Promise Growing Airbnb Investment Location Potential
Texas markets like Austin, Dallas, and Houston have emerged as strong potential airbnb investment locations, bringing a blend of business and leisure travel, reasonable real estate costs, and fewer regulations. Data shows double-digit growth in occupancy rates in 2022 for Houston and Austin, at around 70%. This aligns with Texas’ rapid economic and population expansion, and its lack of state income tax appeals to real estate investors. As tourism rebounds post-COVID, Texas’ major urban centers offer promising upside as airbnb investment locations in 2023.
Smaller Markets Like Tennessee Are Attractive Airbnb Investment Locations
In addition to big cities, data indicates that certain smaller, secondary housing markets can also be smart airbnb investment locations. Places like Tennessee’s Smoky Mountain region, Gatlinburg, and Pigeon Forge boast scenic nature appeal and central U.S. locations that fuel tourism. Per AirDNA, average daily rates for Airbnbs in Gatlinburg reached $175, with 65% occupancy. While not as high-profile as big coastal markets, areas like this can balance solid vacation rental demand with cheaper buy-in costs. Niche tourist destinations and economically vibrant small cities represent under-the-radar airbnb investment locations to explore.
Based on tourism growth trends and real estate data, Florida, Hawaii, Texas, and niche markets like Tennessee represent attractive airbnb investment locations for 2023. Investors should analyze key metrics like occupancy rates, real estate costs, and local regulations when identifying optimal markets.