The Most Profitable Airbnb Cities In The U.S.

The massive expansion of short-term home rental sites like Airbnb have led to a proliferation of investors and homeowners alike getting in on the action. Developers are even starting to build homes with home sharing as part of the design.

The original model of Airbnb was that homeowners would rent out a room or two in their place as a way to make a nice side income, but in the intervening years since its inception, more and more single-family homes have become part of the model. These are some of the most profitable types of Airbnb listings out there, especially for people who already own the home outright such as retirees or investors. The data analytics site Mashvisor looked at which cities have the highest profit margins for these types of homes and provided the data exclusively here.

Note these numbers consist of only single-family homes, rather than all the Airbnb listings in a single county, and Mashvisor uses their own formula to calculate the percentage profit that includes a cash flow estimate (the rental income minus estimated expenses for things such as cleaning, repairs, HOA fees, etc.) divided by the median listing price for a home (in other words, their version of Cash-On-Cash return). They do make the assumption that the host doesn’t have a mortgage to allow for ease of comparison. However, even if you have a mortgage or your listing doesn’t meet each of the criteria used here, the general trends of the data still show which counties can expect to see larger profits.

Even though they analyzed the data at the county level, the major urban hub within each county is likely to make up the majority of listings in that county and will most likely have the most listings with the highest profit margins, so you can apply the trends for the counties to each city.

One thing is clear is how expensive it is to buy a home in Boston. Out of these ten cities it has the highest average rental income per month ($4,098) but the lowest profit margin (1.91%). According to data from Zillow, the median sales price for a single-family home in Boston is $665,000 as of April 2019, more than twice the national average of $226,800. If you’re looking to make a living from Airbnb in Boston, it helps if you already bought a home years—if not decades—ago.

The other big takeaway is how you can still take in a significant chunk of money each month, with a relatively low occupancy rate. For most of these cities you only need to rent out the unit about half of the time and still earn several thousand a month. It probably isn’t a coincidence that the places at the top of the list are holiday destinations rather than places where people will stay more than just a night or two for business.

The take home message? If you want to invest in a property for Airbnb, the best cities are ones with a strong vacation appeal, affordable housing market and major airport.

This post first appeared on Forbes.com. To see the original, click here.