Introduce
With a population of approximately 200,000, Tempe is a bustling city located in Maricopa County, Arizona. Known for its vibrant nightlife, exciting outdoor activities, and top-tier educational institutions, Tempe is a popular destination for travelers seeking adventure, culture, and education.
Over the past few years, the city has seen a significant increase in the number of Airbnb rentals as investors seek to capitalize on the growing demand for short-term accommodation.
In this guide, we’ll take a closer look at the short-term (Airbnb) rental market in Tempe, AZ, exploring key data points and trends shaping the industry.
Supply
The most popular homes are 4-bedroom homes, comprising 26.07% of inventory. This is followed by 3 and 2-bedroom homes at 25.89% and 13.72% of the total inventory, respectively.
Investment Opportunities
One of the key factors driving the growth of the short-term rental market in Tempe is the relatively high gross yield. According to Chalet, the average gross yield in Tempe is 7.04%. This means that investors can expect to earn a significant return on their investment, making short-term (Airbnb) rentals an attractive option for those looking to generate income from real estate.
Another factor that makes Tempe an attractive market for short-term rental investors is the relatively low property tax rate. According to SmartAsset, the average property tax rate in Maricopa County is 0.64%, making it one of the lowest in the state of Arizona. This means that investors can keep more of their rental income, further increasing the profitability of their short-term rental properties.
Average Daily Rate
The median ADR for the market is $194.40. The Average Daily Rate is the highest for 7 bedroom homes ($643) followed by 6-bedrooms and 5 bedrooms at $535 and $444 respectively.
Real Estate Market Trends
It’s worth noting that the Airbnb rental market in Tempe is not isolated from the broader real estate market in the area. According to Zillow, the median home value in Tempe is $477,005, which represents a 4.00% appreciation in home values over the past year. This indicates that the local real estate market is healthy and growing, which bodes well for short-term rental investors who may also be looking to purchase properties in the area.
