Written by: Ashley Durmo
The short-term rental market has grown significantly over the past decade, with Airbnb leading the charge. Investors looking to enter the space often ask a fundamental question: Are Airbnbs profitable? The answer depends on various factors, including location, revenue potential, and market conditions. Based on our latest market overview data, we break down key profitability indicators to help investors make informed decisions.
Key Metrics That Determine Airbnb Profitability
To evaluate the profitability of Airbnbs, we analyzed critical factors such as:
- Median Annual Revenue – How much an Airbnb listing typically earns in a given market.
- Gross Yield Score – A measure of return on investment based on rental income relative to property prices.
- Home Appreciation Score – The expected increase in property value over time.
- Rental Regulation Score – The impact of local laws on Airbnb operations.
- Demand & Supply Strength – The balance between guest demand and available listings.
Best-Performing Markets for Airbnb Profitability
1. Yucca Valley, CA
- Median Annual Revenue: $62,092
- Market Score: 61.66
- Home Appreciation Score: 75.0
- Gross Yield Score: 67.6
- Regulation Score: 75.0
- Supply Strength: Very Strong
Yucca Valley stands out as a strong performer for short-term rental investors. With a high appreciation score and strong supply, investors can expect solid returns both from rental income and property value growth.
2. Vail, CO
- Median Annual Revenue: $92,646
- Market Score: 69.18
- Home Appreciation Score: 75.0
- Gross Yield Score: 52.0
- Regulation Score: 75.0
- Supply Strength: Strong
Vail, CO is a high-revenue market but comes with a lower gross yield score. Investors looking for strong revenue potential in a ski destination should weigh these factors before investing.
3. Virginia Beach, VA
- Median Annual Revenue: $41,160
- Market Score: 69.13
- Home Appreciation Score: 81.5
- Gross Yield Score: 58.6
- Regulation Score: 71.0
- Supply Strength: Strong
Virginia Beach presents a balance of appreciation potential and revenue generation, making it a moderate-risk investment market.
