The 10 Best (and Worst) Cities to Invest in Short-Term Rentals

The 10 Best (and Worst) Cities to Invest in Short-Term Rentals

About 17 years ago, two friends started Airbnb to give travelers more options for safe and affordable accommodations—and to give property owners a way to make some extra cash with available space in their homes. 

Turns out, the market was more than ready for it, and the enterprise grew from a humble air mattress on the floor of a San Francisco apartment to a network of over 8 million properties across the globe. 

More than 5 million Airbnb hosts have since made over $250 billion from 1.5 billion stays.

Truth be told, that growth hasn’t been without some backlash, thanks to some unsociable or downright shady behavior on both sides: 

  • Unreasonable demands and/or exorbitant fees from property owners
  • Renters trashing the property and/or traumatizing the neighborhood

That second issue has led to a flurry of new city laws that impose restrictions on short-term rentals. 

That said, short-term rentals are still a great way for property owners across the country to make their monthly mortgage payments more affordable. The trick is identifying the best markets for it. 

Clever Real Estate teamed up with Rabbu.com (a Charlotte-based short-term rental investment platform) to rank the 50 largest U.S. metros on how friendly they are to short-term rentals. 

Read on to learn the 10 best—and worst—short-term rental markets of 2024.

IDENTIFYING THE BEST & WORST SHORT-TERM RENTAL MARKETS

To identify the best short-term rental markets of 2024, Clever Real Estate, in collaboration with Rabbu.com, analyzed the 50 biggest metro areas, ranking them according to the following parameters: 
  • 4x: Median home sale price 
  • 4x: Rabbu return-on-investment (ROI) score
  • 3x: Occupancy rate
  • 3x: Average annual revenue for property owners
  • 3x: Property value change in the last five years
  • 2x: Google search volume for terms related to short-term rentals
  • 1x: Rabbu’s percentage of listings suitable for Airbnb
  • 1x: Zillow current property values
  • 1x: Number of total listings 

THE TOP 10 SHORT-TERM RENTAL MARKETS IN 2024

Based on their results, Tampa, FL, emerged as the number one short-term rental market in the U.S. for 2024, based on the following: 
  • Number of property listings: 16,020 (triple the median)
  • Airbnb occupancy rate: 44.8%
  • Average annual Airbnb revenue: $52,705
Over the past five years, property values in Tampa increased by 71.6%—55% higher than the median city in the study. Top 10 short-term rental markets for 2024:
  1. Tampa, FL
  2. Orlando, FL
  3. Jacksonville, FL
  4. Boston, MA
  5. Miami, FL
  6. Buffalo, NY
  7. Columbus, OH
  8. Chicago, IL
  9. Providence, RI
  10. Kansas City, MO

THE 10 WORST CITIES FOR INVESTING IN SHORT-TERM RENTALS

San Jose, CA, sits at the bottom of the list of cities with favorable conditions for short-term rental investors, largely due to its median home sale price of $1,447,955, which is more than five times the national average. Another issue is inventory; San Jose has only 1,296 active listings—76% less than the median—giving it the lowest Rabbu ROI of all 50 U.S. metros. The 10 worst short-term rental markets:
  1. San Jose, CA
  2. Birmingham, AL
  3. San Antonio, TX
  4. Houston, TX
  5. Sacramento, CA
  6. Raleigh, NC
  7. Riverside, CA
  8. San Francisco, CA
  9. Oklahoma City, OK
  10. Pittsburgh, PA

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