Rental hot spots: The best destinations to invest in an Airbnb

Airbnb currently has an estimated 200 million users, and with recent company data revealing that the number of worldwide bookings increased by 31% in 2022, its popularity is only rising,. Landlords could stand to make significant profits by listing their rental properties on the platform, but are there some cities that are better than others for investing in an Airbnb?

To find out, the team here at CIA Landlords Insurance analysed the capital cities of 45 OECD countries, ranking them based on factors such as the quarterly growth of Airbnb in the area, the average daily rate, monthly revenue, and yearly occupancy of Airbnbs in the city, and the price to buy property in each location. We also took into account the number of one, two, and three-bedroom properties in each city to determine if there are any gaps in the market for landlords looking to buy-to-rent.

Reykjavik is the best destination to invest in an Airbnb

Topping the list as the best destination to invest in an Airbnb is Iceland’s capital Reykjavik. Airbnb has seen a 31% growth in the number of rentals in the city over the last quarter, which is the second highest of all cities analysed. Occupancy rates of Airbnbs are also relatively high in the city, at 77% across the whole year. Landlords may also be able to make significant profits in the popular tourist town, as average daily rates for Airbnbs are around £165, and monthly revenues average £2,404. 

Compared with other European cities, it’s also relatively affordable to buy in Reykjavik, with an apartment in the city centre averaging £4,832 per square metre. In terms of any gaps in the market, the city currently has a lot less three-bed properties (365) available to rent on Airbnb, compared with one-bed properties (995), so landlords may see more demand for a larger property.

In second place is Dublin. The Irish city sees even higher Airbnb occupancy rates than in Reykjavik, at 81% throughout the year. Daily rates are also higher on average, at £181 per day, and Airbnb owners tend to make more revenue on a monthly basis, with averages around £2,544. There’s even fewer three-bed properties currently available on Airbnb here than in Reykjavik, with just 284 to choose from, but it is more expensive to purchase property, with an apartment in the city centre averaging £5,985 per square metre.

Despite only seeing an 8% quarterly growth rate for Airbnbs, Amsterdam, The Netherlands claims third place. The dutch city boasts the highest average daily rate of all cities analysed, at £206, which means landlords could potentially make the highest amount of profit here, especially given that the city’s occupancy rates are at 90% throughout the year. However, Amsterdam is the most expensive place to buy property out of the whole of the top five, with an apartment in the city centre averaging around £6,322. 

With the highest average monthly Airbnb revenue of all cities analysed, at £2,727, in fourth place is Edinburgh. There is perhaps much less of a gap in the market for holiday rentals in the Scottish city, however. Edinburgh has over double the amount of three-beds available on Airbnb than Reykjavik, at 888, and the city also has a large number of two-beds, with 2,151 available. 

Belfast rounds off the top five best destinations for investing in an Airbnb.

Warsaw found to be the worst destination to invest in an Airbnb

On the other end of the spectrum, Warsaw, Poland has been revealed as the worst destination to invest in an Airbnb. Average daily Airbnb rates are the lowest here than in any other city analysed, at just £56, which is great for holidaymakers, but not so good for landlords. The average monthly Airbnb revenue is also very low in the city, at around £846, which is over two times less the amount that Airbnb owners tend to make in Reykjavik. 

While it is a little cheaper to buy property in Warsaw than in other European cities, at £3,951 per square metre for an apartment in the city centre, the market for Airbnb rentals is already very saturated. Warsaw currently has 12,384 two-beds, and 4,375 three-beds available, which is the most of any other city, meaning landlords may find less demand here for their rental property.  

In second place is San Jose, Costa Rica. The city has an even cheaper daily rate than Warsaw, at £47, so landlords only stand to make around £523 per month on average. Airbnbs in the city also tend to be full for only half of the year, with a 52% occupancy rate, which means owning an Airbnb in the city is perhaps not the best investment choice for year-round income. San Jose is also one of the most expensive places to buy property, with an apartment in the city centre averaging £11,245 per square metre. Landlords who do want to invest in the city might do well with a one-bed apartment though, as there are currently only 780 listed on Airbnb, which is one of the lowest amounts of all cities analysed. 

With the cheapest Airbnb daily rate of all cities analysed, at £28, Bogota is in third place. Bogota has seen one of the lowest growth rates for the number of Airbnbs in the city, with an increase of just 4% this quarter. Airbnb owners also tend to make an average of only £291 in revenue every month. There isn’t a large gap in the market for Airbnbs in the Colombian capital either, particularly for one-beds, as there is already a staggering 5,834 in the city. However, it is one of the cheapest locations to buy property, costing around £1,306 per square metre for an apartment in the city centre. 

Mexico City, Mexico and Ankara, Turkey round off the top five worst cities to invest in an Airbnb. Ankara has the lowest occupancy rates of all cities analysed at only 30% year-round, as well as the lowest average monthly Airbnb revenue of £195. There are however only 116 three-bed properties listed on Airbnb in Ankara, so there may well be a gap in the market here for landlords looking to buy in Turkey.

How to make your property stand out on Airbnb

Richard Wayman, Finance Director at CIA Landlord Insurance says, “Before investing in any property, it’s important to look for a gap in the market. You don’t want to spend significant funds on a buy-to-let, only to find that you aren’t able to rent it out because of limited demand, so doing your research ahead of time is incredibly important. 

“Once you have a property, making sure it attracts potential renters is key, especially on popular platforms like Airbnb. With this in mind, we’ve provided some top tips for how to make your property stand out, so it stays fully booked for years to come:

1. Choose, and take, good photos

Images are the first thing people look at when searching for a property, so make sure you use appealing, good quality images that give a good representation of your home. 

2. Be detailed with your description

A lacklustre property description is a sure-fire way to put people off wanting to book a listing. Include an accurate, easy-to-read description of your property, and highlight any particularly interesting amenities and features to really draw people in. 

3. Price your property correctly

While you don’t want to be short changed, overcharging for your property means renters will choose to book elsewhere if they can get a better deal. Do your research and check out similar listings in your area to see how they are priced. Airbnb also has a Smart Pricing tool which automatically changes your nightly prices based on demand. 

4. Work on getting good reviews 

You’ll want to ensure you have a good ranking on Airbnb, as people tend to check reviews before booking a property. Factors like being as responsive as possible to inquiries and keeping the property well-maintained are key for getting good reviews. Sometimes going that extra mile can really make the difference too, so think about potentially including a welcome pack, or providing things like fresh fruit, or samples of local delicacies, for their arrival. 

5. Sell an experience, not just a place to stay 

People love a personalised experience, so if you can, offering more than just a welcome note can go a long way. Let guests know exactly what they can do in the area with detailed guidebooks, or even go one step further and offer to take them on local tours or book them onto some fun activities. If guests feel like they’ve had an unforgettable experience, this can lead to some great reviews, and even more bookings in the long-term!

Sources & Methodology 

To determine where is best to invest in Airbnbs, and any potential gaps in the market, CIA Landlords Insurance created a seedlist of the capital cities of 45 OECD countries, ranking them based on the following metrics:

Quarterly growth of Airbnbs

Average daily rate of Airbnbs 

Occupancy rates of Airbnbs 

Monthly revenue of Airbnbs

Number of one, two, and three bed properties

Price per square metre for an apartment in the city centre