The best cities for Airbnb arbitrage are
- Nashville, TN
- Charleston, SC
- Boston, MA
- Savannah, GA
- San Diego, CA
Not every list of most profitable Airbnb cities in the US is supported by stats and numbers. However, these cities are backed by the formula for successful Airbnb arbitrage. Ultimately, must run your own expenses against the market in which you want to work.
What is Airbnb arbitrage? The Airbnb arbitrage method involves finding a property, renting it out yourself, listing it on Airbnb for a higher amount, and then renting it to short term rental vacationers or mid to long term renters. Successful Airbnb owners can make an average of $41,026/year in North America. So, while you can make 6 figures with Airbnb, it’s not guaranteed. Thus, Airbnb arbitrage is still profitable in 2023. But, Airbnb millionaires are rare.
With local lead generation, the profit margin is a lot higher than Airbnb rental arbitrage. Plus, you won’t have the hassle of managing a physical property or having to negotiate with a landlord to start your business. Instead, there’s far less overhead. You will own your own website, rank it organically, and rent it out to businesses, bringing in passive income.
15 Best Cities for Airbnb Arbitrage in 2023
You’ll know if your market is right for Airbnb arbitrage by running the numbers, using the averages of other Airbnbs around your property and the total monthly expenses. You’ll also have to ensure that Airbnb arbitrage is legal in your area and find landlords who want to work with you.
You’ll find many lists of the most profitable Airbnb cities online. However, these lists are not finite. Our numbers show that many of the locations on these lists are not that profitable. But, if you can adjust your expenses, you may increase your margins.
Note: The following numbers assume that your rental arbitrage property pulls $3000 in expenses per month, including the monthly rent.
1. Nashville, TN
Average Weekday Rental Rate = $173
Average Weekend Rental Rate = $253
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($173 x 5 weekdays) + ($253 x 2 weekend days) = $196
$196 / $100 = $96/day profit
The most profitable place to have an Airbnb is Nashville, TN. According to our numbers, you can make $96/day. Nashville is a good place for an Airbnb property because it’s a popular tourist destination, an international airport hub, and a collection of hospitals. It also has relatively low living costs.
2. Charleston, SC
Average Weekday Rental Rate = $188.50
Average Weekend Rental Rate = $149.50
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($188.5 x 5 weekdays) + ($149.50 x 2 weekend days) = $177
$177 / $100 = $77/day profit
According to AirDNA, Charleston, SC is where the highest demand for Airbnb is. Our numbers reflect that finding as well, with a profit of $77/day. Charleston is another popular tourist destination and has access to beautiful beaches along the Atlantic Ocean.
3. Boston, MA
Average Weekday Rental Rate = $171
Average Weekend Rental Rate = $151
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($171 x 5 weekdays) + ($151 x 2 weekend days) = $166
$166 / $100 = $66/day profit
4. Savannah, GA
Average Weekday Rental Rate = $158
Average Weekend Rental Rate = $181.50
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($158 x 5 weekdays) + ($181.50 x 2 weekend days) = $165
$165 / $100 = $65/day profit
5. San Diego, CA
Average Weekday Rental Rate = $167
Average Weekend Rental Rate = $160
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($167 x 5 weekdays) + ($160 x 2 weekend days) = $165
$165 / $100 = $65/day profit
6. Kissimmee, FL
Average Weekday Rental Rate = $162
Average Weekend Rental Rate = $133
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($162 x 5 weekdays) + ($133 x 2 weekend days) = $154
$154 / $100 = $54/day profit
7. New York City, NY
Average Weekday Rental Rate = $156
Average Weekend Rental Rate = $148
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($156 x 5 weekdays) + ($148 x 2 weekend days) = $153
$153 / $100 = $53/day profit
New York City has the highest Airbnb occupancy rates at 24.6%, according to Alltherooms. Airbnb arbitrage is the only way you can become an Airbnb host in NYC without owning property. Airbnb is legal in NYC, but it may be difficult finding an apartment that is cheap enough that you can make a profit.
8. Austin, TX
Average Weekday Rental Rate = $130
Average Weekend Rental Rate = $141
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($130 x 5 weekdays) + ($141 x 2 weekend days) = $133
$133 / $100 = $33/day profit
Austin is the best town for Airbnb, according to AreaVibes. This city is a travel destination and has beautiful weather year round. The average rent in Austin is around $1799, just around the nation’s average of $1794.
9. New Orleans, LA
Average Weekday Rental Rate = $100
Average Weekend Rental Rate = $199
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($100 x 5 weekdays) + ($199 x 2 weekend days) = $128
$128 / $100 = $28/day profit
10. Honolulu, HI
Average Weekday Rental Rate = $126
Average Weekend Rental Rate = $131
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($126 x 5 weekdays) + ($131 x 2 weekend days) = $127
$127 / $100 = $27/day profit
While Honolulu is lower on the list of most profitable cities for Airbnb arbitrage, Hawaii has the highest Airbnb earnings per year, according to Tipalti. Thus, Hawaii is the state that makes the most money on Airbnb, at an average income of $73,247.
11. Chicago, IL
Average Weekday Rental Rate = $121
Average Weekend Rental Rate = $135
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($121 x 5 weekdays) + ($135 x 2 weekend days) = $125
$125 / $100 = $25/day profit
12. Detroit, MI
Average Weekday Rental Rate = $119
Average Weekend Rental Rate = $126
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($119 x 5 weekdays) + ($126 x 2 weekend days) = $121
$121 / $100 = $21/day profit
13. Tampa, FL
Average Weekday Rental Rate = $121.50
Average Weekend Rental Rate = $111
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($121.50 x 5 weekdays) + ($111 x 2 weekend days) = $117
$117 / $100 = $17/day profit
14. Indianapolis, IN
Average Weekday Rental Rate = $107
Average Weekend Rental Rate = $133
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($107 x 5 weekdays) + ($133 x 2 weekend days) = $114
$114 / $100 = $14/day profit
15. Las Vegas, NV
Average Weekday Rental Rate = $114
Average Weekend Rental Rate = $111
Total Expenses = $3000/month
Daily Expenses = $3000 / 30 days = $100
Weighted Average Rate =
($114 x 5 weekdays) + ($111 x 2 weekend days) = $113
$113 / $100 = $13/day profit
SUMMARY
The most profitable airbnb locations in the United States are Nashville, Charleston, Boston, Savannah, San Diego, Kissimmee, New York City, Austin, New Orleans, Honolulu, Chicago, Detroit, Tampa, Indianapolis, and Las Vegas.
But, Airbnb is a worldwide vacation rental platform. The best cities for Airbnb arbitrage Europe are Ballstad, Norway, Zermatt, Switzerland, and Paris, France. The best cities for Airbnb arbitrage Canada are Victoria, British Columbia, Canmore, Alberta, and Tofino, British Columbia.
10 Potentially Profitable Locations Debunked
These Airbnb locations are often listed as some of the best places to invest. However, when you run the numbers, the profits are quite low.
Best Cities for Airbnb Arbitrage Reddit
SUMMARY
The Airbnb business is always changing., local laws and markets can shift, just like they did in Toronto. So, the best cities for Airbnb arbitrage 2022 were different from the best cities for Airbnb arbitrage 2021.
It also depends on the deal you can make with the landlord, and other tactics to be successful at Airbnb arbitrage. For instance, as a potential property owner, choose rentals that are in your own local area, near hospitals, and has proximity to public transportation. Proximity to local festivals is another creative way to boost potential earnings. Of course, you'll have to learn about Airbnb arbitrage pros and cons to increase your chances of succeeding in the industry.
How to be Successful at Airbnb Arbitrage?
Even if you follow all of the steps of how to start Airbnb arbitrage, you may not be successful. While the overall success rate of Airbnb arbitrage is unknown, you will need to hold a 70%-90% occupancy rate to truly be successful. This is important, especially if you're aiming to have your own Airbnb empire in the long run.
How Do I Start Airbnb with No Money?
To start Airbnb with no money, essentially you will have to own the investment property already. You will also need to use the furnishings that already exist within the home. But, you should spend money on an LLC and insurance to save yourself from legal troubles down the road.
What is the Downside of Airbnb Arbitrage?
- Fewer tax benefits
- Risk to your reputation and Airbnb rental metrics
- Huge profit loss if you cannot find renters and can’t cover the monthly rental cost
- Risk of being sued or getting stuck in a legal battle a tricky Airbnb guest
- Trouble finding landlords and locations where there are no short term rental regulations.
- Jumping into property management can be too difficult for many investors
- Heightened responsibility for damages
The biggest problem with Airbnb arbitrage is that your profit margins will be low. You can’t inflate rent too much or no one will sign up to stay. With rent already high, making up the difference will be difficult.
Related Articles on Airbnb Arbitrage
There are many Airbnb courses out there, but these teach the arbitrage strategy exclusively:
Is Rental Arbitrage Worth It?
Rental arbitrage is worth it if only to avoid the high initial expense of traditional real estate investing. This way, you may just need to put down a security deposit, which is a few thousand dollars at most. Still, there are many risks to rental arbitrage and being a property manager.
With the local lead generation business model, there is little upfront cost, and no large monthly rent amount you need to make in order to turn a profit. Plus, its much simpler to start this digital real estate business. Invest a small amount and rank the website using organic means. Then, you’ll collect money from small businesses for your leads, and only have to complete maintenance every once in a while.
