andrew henderson menu

Andrew Henderson

Founder of Nomad Capitalist and the world’s most sought-after expert on global citizenship.

ABOUT THE COMPANY

What we’re all about

MEET OUR TEAM

Meet our 95+ global team

CONTACT US

We’re here to serve you

FAQS

Your questions answered

TESTIMONIALS

Read our testimonials

NEWSLETTER

Get free email updates

NC-image-menu

ACTION PLAN

Our flagship service for entrepreneurs and investors

ACTION PLAN ELITE

Create your Action Plan directly with the Mr. Henderson himself

CITIZENSHIP BY DESCENT

Claim a second passport based on familial connections

ALL SERVICES

Click here to see all our products and services

PASSPORT INDEX

Discover the world’s best passports to have in an ever-changing world

CITIZENSHIP MAP

Explore the citizenship options using our interactive citizenship map

TAX MAP

Explore the tax details for countries using our interactive tax map

ALL RESEARCH

Click here to see all of our research and interactive tools

THE WORLD’S #1 OFFSHORE EVENT

Learn from a curated “Who’s Who” of business speakers from around the world, get our latest R&D updates, and rub shoulders with successful people from all corners of the world.

NOMAD CAPITALIST THE BOOK

Andrew Henderson wrote the #1 best-selling book that redefines life as a diversified,
global citizen in the 21st century… and how you can join the movement.

Airbnb Investment: Choosing the Best Rental Markets

Finance

February 12, 2025

What comes to mind when you think about Airbnb? 

Images of happy vacations, beautiful condos, life on the road or maybe even your very own Airbnb experience?

For those keen to protect and grow their wealth, investing in an Airbnb property might not spring to mind. 

It could, however, be time for a rethink because it’s big business.

Airbnb revenue for Q3 2024 was US$3.7 billion, up 10% year-on-year, while nights and experiences grew 8% compared to the previous year. 

While that alone doesn’t mean investing in Airbnb is the right or best option for everybody, it’s worth looking at options to dip your toes into the vacation rental market. 

Whether you want to rent out an existing property for some passive income or you plan to explore diverse real estate opportunities, Airbnb can bring great returns. 

Airbnb investment or not, if you are already interested in becoming a global citizen, we create holistic strategies to legally reduce your taxes, protect your assets and maximise your freedom. Find out more here

The Airbnb Effect

Airbnb's Effect on The Local Hospitality and Housing Market

Since its launch in 2008, Airbnb has enjoyed huge success, with listings in over 220 countries and regions. With such a vast presence, Airbnb can be at odds with the markets it enters.

Local housing markets and hospitality industries have always felt threatened by Airbnb, and rightfully so. Due to Airbnb, the hotel industry loses approximately US$450 million worth of direct revenues annually.

Not only that – what is termed the ‘Airbnb Effect’ can drive up real estate prices and compel owners of traditional rental properties to switch to short-term vacation rentals.

But is Airbnb really to blame for the impact it has on a certain market? We don’t think so.

Like any innovative entrepreneurial idea, Airbnb started small. It saw a gap in the short-term rental industry, and it aimed to fill that gap with its affordable services – and people loved it.

Times change, technology improves and people naturally side with whoever puts the effort into providing the best experience.

Is an Airbnb Investment a Good Idea in 2025?

Renting an Airbnb may be a piece of cake, but can the same be said about investing in Airbnb?

Is Airbnb investment really a good idea? And if it is, which one is better, renting out a property you already own or buying popular real estate to get the best yield on your Airbnb listing?

And what about offshore real estate opportunities? Is that even worth the effort?

Here at Nomad Capitalist, we looked into all these questions, so you don’t have to. First, let’s answer some of the most common questions a potential Airbnb host usually has and explore how both homeowners and travellers feel about Airbnb right now.

Homeowners’ Sentiment

If you think the possibility of renting out your home on Airbnb sounds profitable, you’re not alone – 82% of homeowners think the same.

54% of homeowners have even shown interest in renting out their homes with a vacation rental app like Airbnb.

With stats like these, the number of Airbnb hosts will only increase. In fact, the number of Airbnb listings increased by 15% across the world in 2024. So, if you are really serious about investing in Airbnb, now would be a great time.

Travellers’ Sentiment

Airbnb is popular – far more popular than any other vacation rental app. This is all thanks to its completely online interface, review/rating system and gorgeous listings.

In fact, 60% of travellers who have stayed in both Airbnb and traditional hotels prefer Airbnb rentals. That alone says a lot about consumer interest in Airbnb.

Renting Out Versus Buying New Airbnb Property

Both have pros and cons, especially when we add the option of purchasing foreign real estate.

An existing rental property will require spending far less money. It will also save the time and legwork involved in finding a property that works for you.

On the other hand, your existing property might need a lot of work to compete with nearby Airbnb rentals, driving up your costs.

But this doesn’t matter as much as you might think. The primary factor that makes an Airbnb property attractive isn’t necessarily related to its ‘old or new’ status.

The make-or-break factor for Airbnb rental property is its location. If you nail that, your investment will be consistently booked and you’ll make good money.

But how do you select the best location?

The Best Places for an Airbnb Investment

All the hottest Airbnb markets have a few similarities. Keeping those in mind, here are the most important factors you should consider.

Focus on the City, Not the Country

It’s best to look at cities and the specific housing market trends rather than countries.

Why? Because a country’s pace of economic growth, or lack thereof, isn’t a clear indicator of the real estate situation in its cities.

Real estate trends depend upon a city’s housing supply, employment rates, and standard of living rather than the country’s economic data, such as GDP. Simply put, property returns and rental yields are location-specific. 

Two cities in the same country can, and usually do, have completely different property markets. Does it mean that selecting a good country isn’t important at all? No. It’s still important.

Why? Because housing regulations and property laws are still set by the government of a country.

So, for your Airbnb investment, choose the best cities, and then make sure that those cities are part of an Airbnb-friendly country.

Rental History or Demand

Don’t just select a city because you think it’s beautiful or you think it has potential. Make data-driven decisions. That way, you will ensure a greater chance of profitability.

Check the history of vacation rental properties in the area. Assess the demand – is it high, bare minimum or non-existent?

If you can, meet with the real estate investors on the ground. They’ll be able to give you a far more practical assessment of the market trends.

Rental Yield

This metric is important. Very important.

You get your rental yield if you divide the annual rental income generated from your investment property by the total amount you have invested in it. The higher the percentage, the more successful your investment property is. 

Top Airbnb Markets for Investment

Now that you know how to choose the best Airbnb investment property, let’s look at some of the best and worst markets for Airbnb investment.

Maui, Hawaii

Maui, Hawaii- Best Markets for Airbnb Investment

Even without looking at the data, Maui, the second-largest Hawaiian island, seems like the perfect vacation destination for any traveller looking to escape. Also known as ‘The Valley Isle’, it’s famous for its beautiful beaches and breathtaking sunsets.

If you’re an Airbnb investor looking to buy foreign real estate, Maui does not disappoint.

Hawaii has the lowest property tax rates among the US states at only 0.27% (average), although Hawaii’s median home value is almost US$772,500.

How is that possible? Because the state of Hawaii offers generous exemptions to homeowners. 

But what about Maui? If Hawaii has the lowest tax rate in the US, Maui has the lowest rate in Hawaii – only 0.21%.

That, along with the fact that an average rental property in Maui earns US$85K per year at an average daily rate of $306, makes the beautiful island a must in the books of any Airbnb investor looking to buy a foreign investment property.

San Cristobal, Mexico

San Cristobal, Mexico - Best Markets for Airbnb Investment

Although the US has the highest number of Airbnb listings, Latin America has become one of the fastest-growing markets for Airbnb, with over 250,000 listings and growing.

Airbnb or not, Latin America has always been a popular destination for American retirees, expats and tourists.

In fact, Mexico has the highest number of US expats in the world, making it one of the easiest countries to move to from the US. That, along with its vibrant culture, exotic beaches and delicious food, makes it one of the best markets for short-term rentals.

It’s no surprise that Airbnb has had a hard time in many regions due to the property regulations there, but it is not letting that get in its way. 

In Mexico City, Airbnb has adopted a friendly approach with the local administration, agreeing to provide 3% of its total revenue from the hosts’ booking to the city government. The hotels in the area provide the same lodging tax to the government.

Now that you know the dynamics of real estate in Mexico in terms of Airbnb, let’s talk about San Cristobal.

Never heard of it? This might also be a plus point – since the pandemic, Airbnb has seen a spike in bookings in areas that are generally deemed less popular or less touristy.

But when we look at the data, San Cristobal, a beautiful high-altitude lush green city, tops many other popular Mexican states. With an average daily rate of US$35, San Cristobal has over 95% channel presence on Airbnb, making it one of the best Mexican cities for your Airbnb business.

Mexico also has a wonderful residence-by-real-estate program that should be checked by Airbnb investors looking to buy Mexican land, either for a primary residence or Airbnb investments. 

Singapore

Singapore, Singapore - Best Markets for Airbnb Investment

A robust economy, personal safety, and low crime rates make Singapore one of the best and safest countries in the world in which to live and invest.

Singaporeans love Airbnb. In fact, they love it so much that they have booked more Airbnb stays than the rest of Southeast Asia combined.

Singapore is one of the few Asian countries where foreigners can buy land. Although it’s far from tax-free or cheap, the returns are promising, making it a lucrative hub for investors.

With a low unemployment rate and high purchasing power, Singaporeans are always on the lookout for a weekend getaway in a luxurious rental.

Airbnb rentals are especially popular among Singaporean millennials who prefer to spend some time away from their family homes at a vacation rental nearby.

Vantaa, Finland

Vantaa, Finland - Best Markets for Airbnb Investment

When it comes to Europe, you will find a thriving Airbnb rental business in several regions. Countries like Italy, Spain and France may seem like the obvious investment options, considering their hyper-tourism.

However, a huge number of tourists flowing to a certain region does not guarantee short-term rental business. In Europe, it may be wise to go off the beaten path and provide a quality vacation rental in an underrated place.

That brings us to Vantaa, the 4th biggest city in Finland. Although not the ultimate tourist destination, Finland is the happiest country in the world. 

Finland is also one of the most peaceful countries in the world, making it a haven for remote workers looking to escape their stressful office routine.

Worst Markets for Airbnb Investments

Now that you’ve got a good idea of the best kinds of places to invest in an Airbnb, here are some places to avoid.

New York

The Big Apple is not a fan of Airbnb. 

Finding a house or apartment in New York City is getting harder and costlier by the minute. 

With more and more property investors buying properties to rent them out on Airbnb, the housing market has become impossible to navigate for an individual or potential homeowner.

All of this resulted in the state of New York passing a law in 2017 that prohibits listing an entire unoccupied property for less than 30 days, as well as new regulations as part of Local Law 18 in 2023.

Moreover, hosts with short-term rental properties in New York City are required to register with the city and obtain a short-term rental registration number.

Thailand

You may be surprised to see Thailand on this list since it’s brimming with tourists. However, Airbnb is complicated in Thailand, to say the least. 

While Airbnb operates in Thailand, hosts can be prosecuted if they rent their properties on a nightly or weekly basis. 

Some hosts in places such as Bangkok, Pattaya and Phuket, however, remain undeterred and still advertise properties on the short-let platform. Technically, this is illegal, and hosts run the risk of imprisonment, fines and potential criminal records.   

Airbnb Investment Opportunities: FAQs

How to invest in Airbnb?

You can invest in Airbnb by purchasing a property in a high-demand area and listing it as a short-term rental. Alternatively, you can invest in Airbnb stock (ABNB) or participate in rental arbitrage by leasing a property and subletting it on Airbnb. Another option is to invest in real estate funds or companies that specialise in short-term rental properties.

Is Airbnb a good investment?

Airbnb can be a good investment if you choose the right location and manage the property effectively. High rental yields, increasing demand for short-term stays and flexible pricing can lead to strong returns. However, legal restrictions, property maintenance, competition and always-changing occupancy rates can pose challenges.

Is Airbnb currently profitable?

Yes, Airbnb is currently profitable. Many people are making fantastic profits on the properties. However, the profitability depends entirely on the individual property and how it’s managed. 

Can you make money investing in Airbnb?

Yes, you can make good money renting out a property on Airbnb. Airbnb’s stock price was also up by 4% year-on-year at the time of writing.

What is a good ROI for Airbnb investing?

Opinions vary, but an ROI of 10% on Airbnb properties seems to be widely regarded as impressive. 

Is Airbnb a good stock to own?

The stock price of Airbnb was up 4% year-on-year at the time of writing. 

What is the 90-day rule on Airbnb?

In many jurisdictions, you can’t rent out your home for short-term lets more than 90 days per year without being granted planning permission. 

Can I invest in overseas real estate?

There are plenty of countries that allow foreigners to invest in real estate, although the rules differ by country. Our guide on overseas real estate investing will help you learn the fundamentals. 

How do you invest in Airbnb without owning property?

You can invest in Airbnb without owning property through rental arbitrage, where you lease a property and sublet it on Airbnb with the landlord’s permission. Another option is co-hosting, where you manage Airbnb listings for property owners in exchange for a percentage of the revenue. You could also invest in Airbnb-related REITs (Real Estate Investment Trusts) or Airbnb stock.

Ready to Become an Airbnb Investor?

Whether you run a property management business or are just starting out in the short-term rental market, Airbnb has the potential to be a lucrative choice. 

There can be some work involved, and you’ll need to stay in contact with guests and service providers as your empire grows. That said, Airbnb could offer an excellent income stream if you want to diversify your revenue sources.

The platform has over 200 million users and continues to shape how the world explores and shares spaces.

However, investing in an Airbnb property isn’t the only way to diversify your portfolio or build wealth abroad.

If you’re looking to grow your wealth offshore, we create holistic strategies for successful investors and entrepreneurs to diversify and protect their assets, become global citizens and maximise their freedom. Reach out to us here.

Joe Elvin
Written by Joe Elvin
Fact-checked by:
Esme Anderson
Reviewed by:
Kevin MacDermot

Get Tips to Reduce Taxes and Build Freedom Overseas

Sign up for our Weekly Rundown packed with hand-picked insights on global citizenship, offshore tax planning, and new places to diversify.

No spam, unsubscribe at any time.

Nomad Capitalist Background
Nomad Capitalist Action Plan
Legally Reduce Your Taxes and Diversify Your Wealth
Nomad Capitalist has helped 1,500+ high-net-worth clients grow and protect their wealth safe from high taxes and greedy governments. Learn how our legal, holistic approach can help you.