The Top 10 Airbnb Rental Arbitrage Markets in the USA 2022

The Top 10 Airbnb Rental Arbitrage Markets in the USA 2022

As vacation rentals and home-sharing become more popular among tourists and business travelers, investors in real estate would want to take advantage of this opportunity. But what if you cannot afford to buy a house or apartment for the purpose of listing it on Airbnb?

Short-term rentals are typically used by property owners to generate passive income. Selecting the right market is the most challenging aspect of generating passive income in the short term rental industry. Rental arbitrage is a low-cost investment method that provides high returns, which could be used as a means of entering into the short-term rental industry with a minimum investment opportunity.

In this post, we’ll cover the U.S. markets with the biggest rental arbitrage potential so you can make a selective decision at your own discretion.

What is Rental Arbitrage?

‘Rental arbitrage’ is the act of renting a property long-term and then re-renting it short-term on sites like Airbnb or Vrbo. Rental arbitrage is a way to enter the short-term rental market without purchasing a property. Rental arbitrage can be incredibly lucrative and challenging at the same time.

How do you Calculate Rental Arbitrage?

If you are curious to understand how to calculate the rental arbitrage potential here is the formula for your working.

Monthly Rent – Average Monthly RevPAR (from the Last Twelve Months) = Monthly Arbitrage Potential

*RevPAR - Revenue per available room (RevPAR) is a metric used in the hospitality industry to measure hotel performance. The measurement is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.

Click here to learn more about Airbnb Short Term Rental Metrics.

The Top Ten Airbnb Rental Arbitrage Markets in the USA

The main focus is on understanding the current opportunity for renting out Short Term rentals and the potential revenue of renting it out nightly on a platform like Airbnb, Vrbo, or Booking.com and which markets present the most attractive opportunities today in the United States.

Based on an analysis conducted by AirDNA, the top ten cities have been ranked as follows, and we will discuss each city's revenue potential.

Savannah

1. Savannah, GA

Savannah is the 5th-largest city in Georgia and is located along the Savannah River, about 20 minutes from the Atlantic Ocean. The coastal town has a well-deserved reputation for gracious hospitality, being consistently voted one of the "world's friendliest cities" by Condé Nast Traveler readers. Under a veil of Spanish moss, Savannah is a charming Southern getaway full of art, period architecture, trendy boutiques, and ghost stories, all of which draw 14.8 million tourists to this city annually, generating $3.1 billion in sales.

This iconic city in America is ranked number #1 in the rental arbitrage market. Despite the challenges facing Savannah in terms of laws and regulations, the city is fast becoming a "Gold Mine" for investors who are searching for a steady, lucrative source of income.

Rental Arbitrage Market Potential in Savannah

Average Daily Rate: $245 Median Occupancy Rate: 63% Rental Size :2.2 Bedrooms / 5.7 Guests on average

Effective Rents: $1,177 Monthly STR Revenue: $3,891 STR Premium: 230.6% Nights to Cover: 5.2

The number of active rentals in the city exceeds 2300, with 51% invested in Airbnb and 10% in VRBO.

Savannah, GA Housing Market

In January 2022, the median listing home price in Savannah, GA was $274.5K, flat year-over-year. The median listing home price per square foot was $165. The median home sold price was $259K.

Savannah, GA is a seller's market in January 2022, which means that there are more people looking to buy than there are homes available.

Home values in Savannah, GA

Savannah is a city in Georgia and consists of 85 neighborhoods. There are 750 homes for sale, ranging from $15K to $5M. Savannah has affordable condo/townhomes.

What are the best neighborhoods in Savannah?

Some of the best neighborhoods in or around Savannah, Georgia are Windsor Forest, Live Oak, and Wilshire Estates - Savannah Mall.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information check out our blog, Rental Arbitrage in Savannah | What You Should Know!

Charleston

2. Charleston, SC

Charleston, South Carolina has been ranked the #1 best US city for ten years straight been by Conde Nast Traveler Readers' Choice Awards. The waterfront city offers beauty, history, fantastic food, arts, romance, culture, adventure, festivals, special events, and so much more. The number of tourists who visited Charleston in 2018 reached nearly 7.3 million, arriving by air, land, and sea. Over 15,000 travelers passed through Charleston International Airport each day in 2008, while approximately 225,000 entered the city through its cruise terminal that year.

Charleston, South Carolina has long been a popular vacation destination, with a history and a beautiful, compact city center that lends itself to easy sightseeing. Due to Charleston's status as a destination city for a multitude of reasons, there is a market for short-term rental venues that provide many experiences for travelers - from boutique hotels to beach houses, to in-town villas to entire residential homes. This holy city is ranked #2 in the potential rental arbitrage market.

Rental Arbitrage Market Potential in Charleston

Average Daily Rate: $268 Median Occupancy Rate: 75% Rental Size: 2.4 Bedrooms / 5.9 Guests on average

Effective Rents: $1,326 Monthly STR Revenue: $4,291 STR Premium: 223.6% Nights to Cover: 5.5

The number of active rentals in the city exceeds 2161, with 48% invested in Airbnb and 17% in VRBO.

Charleston, SC Housing Market

The median listing home price in Charleston, SC was $445K in January 2022, trending up 15.6% year-over-year. The median listing home price per square foot was $265.

Home values in Charleston, SC

Charleston is a city in South Carolina and consists of 60 neighborhoods. There are 941 homes for sale, ranging from $15K to $7.5M. Charleston has affordable condos and affordable townhomes.

What are the best neighborhoods in Charleston?

Some of the best neighborhoods in or around Charleston, South Carolina are Downtown Charleston, South of Broad, and Harleston Village.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information check out our blog, Rental Arbitrage in Charleston | What You Should Know!

New Orleans

3. New Orleans, LA

As one of the top tourist destinations in the United States, New Orleans welcomed 18.51 million visitors in 2018. It has been world-renowned for its eclectic music, cuisines, dialects, and never forgetting its annual celebrations and festivals, such as Mardi Gras.

With its vibrant nightlife along Bourbon Street and its French and Spanish Creole architecture, the French Quarter, the City has been described as one of the most unique in the world. New Orleans welcomes short-term rentals (less than 30 consecutive nights at a time) as the tax revenues collected go towards improving the infrastructure and emergency medical services in the city.

According to the Airbnb report released in 2015, a host earns an average of $10,000 a year by renting out their space to tourists. A majority of tourists, both local and international, are likely to return to New Orleans. Data analytics shows that New Orleans is a city of renters. According to the US Census Bureau, 52.6% of housing units in the city are renter-occupied. The city has a strong job market, and rental demand is largely determined by job growth.

As a result, rental properties are in high demand and rental prices are rising. Rents in New Orleans are high, and property costs are low, thus making this market a highly lucrative investment for rental arbitrage and ranks at #3 on the top ten list.

Rental Arbitrage Market Potential in New Orleans

Average Daily Rate: $ 211 Median Occupancy Rate: 63% Rental Size: 2.3 Bedrooms / 5.6 Guests on average

Effective Rents: $1,056 Monthly STR Revenue: $3,295 STR Premium: 212% Nights to Cover: 4.8

The number of active rentals in the city exceeds 6,199, with 60% invested in Airbnb and 14% in VRBO.

New Orleans, LA Housing Market

The median listing home price in New Orleans, LA was $359.9K in January 2022, trending up 12.8% year-over-year. The median listing home price per square foot was $231.

Home values in New Orleans, LA

New Orleans is a city in Louisiana and consists of 71 neighborhoods. There are 2,196 homes for sale, ranging from $8.5K to $5.2M. New Orleans has affordable duplexes/triplexes, and affordable condo/townhomes.

What are the best neighborhoods in New Orleans?

Some of the best neighborhoods in or around New Orleans, Louisiana are French Quarter, Audubon, and Lakeview Park.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information check out our blog, Rental Arbitrage in New Orleans | What You Should Know!

Nashville

4. Nashville, TN

Nashville is more accommodating, authentic, and accessible than any other city in the U.S.A With plenty of rooms, a state-of-the-art convention center, a music scene that is second to none, rockstar chefs, and so much more to offer, this city is the perfect collaboration of business and pleasure.

In 2019, domestic and international travel spending in Tennessee was $23 billion, with Nashville accounting for a large share of this number. With an abundance of attractions from music and theatre to architecture, history, culture, food, wildlife, and parks, Nashville is poised to regain tourism dollars lost due to the pandemic. Nashville ranked among the top 30 most-desired domestic destinations and saw a 200% increase in travelers at the Nashville International Airport in April 2021. As one of the few US cities named a Safe Travels destination by the World Travel & Tourism Council, it has also had over 20 new restaurants open.

Moreover, these additional reasons make Nashville an attractive vacation rental option for digital nomads and business travellers looking for a new city to work remotely from and ranks at #4 in the top rental markets thriving in the rental arbitrage market.

Rental Arbitrage Market Potential in Nashville

Average Daily Rate: $274 Median Occupancy Rate: 61% Rental Size: 2.4 Bedrooms / 7.4 Guests on average

Effective Rents: $1,318 Monthly STR Revenue: $2,412 STR Premium: 158.9% Nights to Cover: 6.1

The number of active rentals in the city exceeds 6,287, with 56% invested in Airbnb and 13% in VRBO.

Nashville, TN Housing Market

The median listing home price in Nashville, TN was $414.9K in January 2022, trending up 16.9% year-over-year. The median listing home price per square foot was $250.

Home values in Nashville, TN

Nashville is a city in Tennessee and consists of 124 neighborhoods. There are 1,528 homes for sale, ranging from $40K to $15.8M.

What are the best neighborhoods in Nashville?

Some of the best neighborhoods in or around Nashville, Tennessee are Green Hills, Inglewood and Urbandale Nations.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes and added information,check out our blog, Rental Arbitrage in Nashville | What You Should Know!

Jacksonville

5. Jacksonville, FL

Jacksonville, also called Jax by locals, is one of the fastest growing tourism destinations in the Southeast of the U.S.A.

As a more relaxed alternative to a bustling city like Miami, it is the ideal Florida destination for exploring nature's best in the state. The city offers eco-adventures, world-class fishing, and a wide range of parks. Heritage neighborhoods, eclectic museums, lively street art, delicious cuisine, and craft breweries are located in the city. In addition to 22 miles of beaches, this waterfront destination offers visitors an abundance of fun and entertainment.

According to AirDNA, Jacksonville continues to rank among the top five markets for the highest rental arbitrage premiums. Listings in Jacksonville grew by over 40% in the second quarter of 2021 compared to the same period in 2019. Jacksonville is also the only market (of 34 analyzed) where multifamily listings have increased since 2018. The market is ranked as #5 on the top ten cities for rental arbitrage.

Rental Arbitrage Market Potential in Jacksonville

Average Daily Rate: $147 Median Occupancy Rate: 68% Rental Size: 2 Bedrooms / 5.2 Guests on average

Effective Rents: $1,231 Monthly STR Revenue: $3,164 STR Premium: 157% Nights to Cover: 7.0

The number of active rentals in the city exceeds 1,985, with 67% invested in Airbnb and 14% in VRBO.

Jacksonville, FL Housing Market

In January 2022, the median listing home price in Jacksonville, FL was $275K, trending up 18.5% year-over-year. The median listing home price per square foot was $173. The median home sold price was $274.7K.

Home values in Jacksonville, FL

Jacksonville is a city in Florida and consists of 196 neighborhoods. There are 4,847 homes for sale, ranging from $2.5K to $9M.

What are the best neighborhoods in Jacksonville?

Some of the best neighborhoods in or around Jacksonville, Florida are Chimney Lakes, Oceanway, and East Arlington.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information, check out our blog, Rental Arbitrage in Jacksonville | What You Should Know!

San Diego

6. San Diego, CA

San Diego, California's second-largest city and the eighth biggest city in the United States, has nearly 1.3 million city residents and more than 3 million county residents. Within its borders, San Diego County comprises 18 incorporated cities as well as numerous charming subdivisions and communities.

In San Diego, both arts and culture, as well as the culinary arts, are flourishing. In the 6,400 restaurants that make up the region's dining landscape, award-winning cuisine is prepared by the newest culinary talents. It is home to the largest urban cultural park in the U.S., 15 museums, numerous art galleries, and gardens, as well as the Tony Award-winning “The Globe Theatres” and the world-renowned San Diego Zoo.

According to The San Diego Union Tribune, San Diego was the second most popular California destination for Airbnb users in 2018, bringing hosts $213 million in income. In the same year, some 1 million guests stayed in Airbnb rentals throughout San Diego County, which translated into the more than $200 million that hosts received for rented rooms and whole homes. Fast forward to 2022, and the San Diego housing market is booming. There has been a massive shift in bookings from weekend vacationers to monthly work from home (WFH) bookings. Since these non-vacationers are taking up more bookings, hosts are able to accommodate longer stays. Month-long stays are always an added bonus, resulting in more revenue, thus making it an ideal market to embark on Rental Arbitrage.

Rental Arbitrage Market Potential in San Diego

Average Daily Rate: $238 Median Occupancy Rate: 78% Rental Size: 1.9 Bedrooms / 5.6 Guests on average

Effective Rents: $2,164 Monthly STR Revenue: $4,739 STR Premium: 119% Nights to Cover: 9.1

The number of active rentals in the city exceeds 8822, with 61% invested in Airbnb and 13% in VRBO.

San Diego, CA Housing Market

In January 2022, the median listing home price in San Diego, CA was $849K, trending up 19.7% year-over-year. The median listing home price per square foot was $625. The median home sold price was $803.5K.

Home values in San Diego, CA

San Diego is a city in California and consists of 100 neighborhoods. There are 2,077 homes for sale, ranging from $3.5K to $49M.

What are the best neighborhoods in San Diego?

Some of the best neighborhoods in or around San Diego, California are Rancho Bernardo, Carmel Valley, and City Heights.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information, check out our blog, Rental Arbitrage in San Diego | What You Should Know!

Tampa

7. Tampa, FL

Tampa, Florida is more than just a city in the second most “fun state” in the United States with theme parks and water parks. The city offers a great mix of historic architecture, museums, modern landmarks, fantastic Cuban food, and thrilling nightlife. In fact, Hillsborough County businesses generated $4million in tourism-related spending in April 2021 despite the post-pandemic context.

Located near the beaches, the city attracts travelers from diverse demographics. Tampa offers a wide variety of options for visitors, including live music and dancing late into the night, hiking, biking, or observing impressive art at the Tampa Museum of Art, attending a concert, riding a thrill-coaster, or just watching a pro football game.

Furthermore, not only is Tampa a major business center but a top startup location in the world, attracting business travelers and digital nomads. All this makes Tampa a great location for a short term vacation rental with significant potential for growing revenue.

Tampa is one of the best cities for rental arbitrage in the United States and ranks at #7 on the top ten list.

Rental Arbitrage Market Potential in Tampa

Average Daily Rate: $155 Median Occupancy Rate: 73% Rental Size : 2 Bedrooms / 5.4 Guests on average

Effective Rents: $1,410 Monthly STR Revenue: $2,968 STR Premium: 110.5% Nights to Cover: 8.2

The number of active rentals in the city exceeds 4,266, with 69% invested in Airbnb and 11% in VRBO.

Tampa, FL Housing Market

In January 2022, the median listing home price in Tampa, FL was $360K, trending up 14.3% year-over-year. The median listing home price per square foot was $233. The median home sold price was $350K.

Home values in Tampa, FL

Tampa is a city in Florida and consists of 94 neighborhoods. There are 2,453 homes for sale, ranging from $22.5K to $13M.

What are the best neighborhoods in Tampa?

Some of the best neighborhoods in or around Tampa, Florida are Old Seminole Heights, West Meadows, and Sun Bay South.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information, check out our blog, Rental Arbitrage in Tampa | What You Should Know!

Miami

8. Miami, FL

Located on the east coast of Florida, Miami is a popular holiday destination for tourists from all over the world. In 2019, Greater Miami received 24 million tourists, 67% of whom stayed overnight. Its world-famous cruise port and international airport make Miami a coveted destination.

Thanks to its year-round sunny climate, Miami is visited throughout the year by a diverse group of people, including celebrities, art connoisseurs, and college students. Aside from luxurious hotels, Art Deco buildings, endless shopping, art festivals, and wine tasting events, Miami also offers a variety of sports tourism options, ranging from deep-sea fishing and sailing to major league games, auto racing, golf, and tennis. Known for its exciting nightlife and delicious Cuban coffee, it is known as a city that never sleeps.

It has a ranking of #8 in the rental arbitrage market, and is a city worth investing in not only as a holiday destination, but also as an investment location.

Rental Arbitrage Market Potential in Miami

Average Daily Rate: $215 Median Occupancy Rate: 72% Rental Size: Bedrooms / Guests on average

Effective Rents: $1,796 Monthly STR Revenue: $3,708 STR Premium: 106.5% Nights to Cover: 8.5

The number of active rentals in the city exceeds 11,183, with 67% invested in Airbnb and 14% in VRBO.

Miami, FL Housing Market

In January 2022, the median listing home price in Miami, FL was $485K, trending up 16.9% year-over-year. The median listing home price per square foot was $353. The median home sold price was $450K.

Home values in Miami, FL

Miami is a city in Florida and consists of 46 neighborhoods. There are 6,597 homes for sale, ranging from $1K to $150M.

What are the best neighborhoods in Miami?

Some of the best neighborhoods in or around Miami, Florida are Brickell, Edgewater and Flagami.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes and added information,check out our blog, Rental Arbitrage in Miami | What You Should Know!

Las vegas

9. Las Vegas, NV

Las Vegas is referred to as the entertainment capital of the world. Vegas is the largest city in Nevada and the Mojave Desert, and the 28th most populous city in the U.S., with over 648 thousand residents. A resort city, Las Vegas offers an endless variety of entertainment options, including gambling, nightlife, shopping, and dining. It is well known that Vegas is a popular tourist destination. In 2019, the famous city attracted over 42 million tourists and in 2020, at the height of the pandemic, Las Vegas recorded 19 million visitors.

The advantages of Airbnb in Las Vegas include people staying in quieter neighborhoods and the amenities are perfect for families or groups traveling together. The fact that there are so few properties in Las Vegas compared to demand is one of the key components of why Airbnb is so successful in this market. Those who own Las Vegas Airbnbs are seeing high success rates. Real estate costs are low as compared to other tourist destinations in the U.S.

Airbnb hosts in Las Vegas have reported that they raised their rental rates 200% and were booked solid without any interruptions. Historically, statistics indicate that every new Airbnb listing is quickly rented in Las Vegas, which makes it one of the most potential markets for rental arbitrage and is ranked at #9 on the top ten list.

Rental Arbitrage Market Potential in Las Vegas

Average Daily Rate: $257 Median Occupancy Rate: 78% Median Monthly Revenue: $3,900 Rental Size: 2.2 Bedrooms / 6.5 Guests on average

Effective Rents: $1,243 Monthly STR Revenue: $2,389 STR Premium: 92.2% Nights to Cover: 8.3

The number of active rentals in the city exceeds, with 74% invested in Airbnb and 13% in VRBO.

Las Vegas, NV Housing Market

The median listing home price in Las Vegas, NV was $399.9K in January 2022, trending up 23% year-over-year. The median listing home price per square foot was $232.

Home values in Las Vegas, NV

Las Vegas is a city in Nevada and consists of 51 neighborhoods. There are 3,202 homes for sale. Las Vegas has affordable apartments.

What are the best neighborhoods in Las Vegas?

Some of the best neighborhoods in or around Las Vegas, Nevada are Sun City Summerlin, Lone Mountain and North Cheyenne.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes and added information, check out our blog, Airbnb Rental Arbitrage in Las Vegas | What You Should Know!

Austin

10. Austin, TX

Austin is the 11th largest city in the United States, with a population of over three million residents. According to Forbes, Austin was voted the No. 1 place to live in America based on affordability, job prospects, and quality of life. It was also named the fastest-growing large city in the U.S. It ranked No. 4 of the best large cities to start a business. It was chosen among the top 15 cities in the United States to visit.

It is no wonder it is now a hotbed for the real estate market. Over the past decade, real estate appreciation in the city has averaged 5.13%. Increasingly, companies and investors are buying up private spaces in Austin. This looks promising to drive the Austin housing market to grow even more in 2022. This will result in an even more attractive investment proposition for Austin real estate investors.

A visit to Austin may include the South by Southwest music, media, and film festival, a Texas Longhorns football game, or paddle boarding down the Colorado River. Tourists are always in search of places to stay in Austin. There are events every weekend - which generates a constant flow of people. As a result, hosts are mostly booked throughout the year, which in turn creates a demand for vacation rentals, which makes Austin another potentially lucrative market for rental arbitrage ranking at #10 on the top ten list.

Rental Arbitrage Market Potential in Austin

Average Daily Rate: $218 Median Occupancy Rate: 67% Rental Size: 2.1 Bedrooms / 5.7 Guests on average

Effective Rents: $1,376 Monthly STR Revenue: $2,641 STR Premium: 91.9% Nights to Cover: 8.5

The number of active rentals in the city exceeds 7,921, with 65% invested in Airbnb and 13% in VRBO.

Austin, TX Housing Market

The median listing home price in Austin, TX was $580K in January 2022, trending up 22.1% year-over-year. The median listing home price per square foot was $326.

Home values in Austin, TX

Austin is a city in Texas and consists of 83 neighborhoods. There are 1,727 homes for sale, ranging from $57K to $18M. Austin has affordable duplex/triplexes, and affordable apartments.

What are the best neighborhoods in Austin?

Some of the best neighborhoods in or around Austin, Texas are Downtown Austin, West Oak Hill and North Austin.

For information on everything you need to know about rental arbitrage laws, short-term rental rules and regulations, taxes, and added information check out our blog, Rental Arbitrage in Austin | What You Should Know!

Hostaway

How can Hostaway Help?

There are a wide array of services that Hostaway provides through its Property management system (PMS) which also serves as a channel manager. It is one of the most sophisticated state-of-the-art systems that supports, Managing inquiries, recurring guests, distribution channels, owners, and staff all in one place.

Contact our sales team or request a free demo if you need help setting up your Airbnb listing.

Ready to find out how Hostaway can transform your business?