Renting out living space on a short-term basis sounds like an appealing way to earn some extra cash. But as with most things related to real estate, location affects your chances of success.
Where are short-term rentals likely to do the best? AirDNA, a company that specializes in crunching data on short-term rentals, recently published a list of the 100 hottest ZIP codes in which to operate one. The findings were based on 12 months of information, ending in December 2018, for more than 1 million Airbnb and HomeAway properties.
Each ZIP code was given a “market grade” of 1 to 100 based on the performance of short-term rentals in five categories: rental demand, or how often properties were booked; revenue growth from year to year; seasonality, or how much the number of bookings varied over the course of a year; the ratio of local home prices to the amount of income they have the potential to produce; and any potential legal issues. (The last category is especially important, given the differing laws regulating short-term rentals around the country.)
The following 10 ZIP codes ranked at the top of the lists for highest demand and biggest revenue growth (shown with their overall scores).