London, Edinburgh, Manchester…. The most visited cities in the UK must be the best place to buy an Airbnb right? The places where the tourists flock to at peak times and corporate employees network throughout the week. Occupancy rates will be higher and your dynamic pricing tool will keep the dial well up to 11.
Not so.
The world of Airbnb and short term rental (STR) serviced accommodation is an industry where lots of parameters come into play to impact on your success. And success ultimately comes down to yield - your net annual income after factoring in the cost of investment.
Top cities to buy an Airbnb based on yield
As a property marketplace for short term rentals and holiday lets, we looked into the performance data from the analytics tool of AirDNA to find out what’s actually going on. Here were the 3 top UK cities with the best yielding Airbnbs based on properties currently on the market:
1. Hull Airbnbs
2. Liverpool Airbnb
3. Swansea Airbnbs
While they don't look to have too much in common except their prominence to the sea (although more on this below), these cities exhibit key traits which hold great value to investors and makes them one of the top UK cities to buy an Airbnb. Here's what they have in common:
Average property price
The top places to run short term rentals for your investor yield are those that pack the most punch when it comes to the income you can get relative to the price you paid. These 3 post-industrial cities have some of the best bargains when it comes to what you can get with your money. For example, a quick search shows an average 3 bed Airbnb in Liverpool will cost the same as the average 1 bed Airbnb in Brighton. That’s a huge difference when it comes to optimising for the number of guests and of course the revenue you can earn per property.
Culture
Liverpool is a known leader on this front in the UK - it boasts world leading music, arts and museums all along one of the most famous seafronts in the world. It will always attract tourists - and key in 2023 is going to be the Eurovision finals when tens of thousands of Europeans descend upon the city.
And though a little off the trodden tourist path of the British Isles, both Hull and Swansea have plenty going on that attracts weekend and holiday tourists too. Hull was UK City of Culture in 2017 with popular sites such as the Hull Maritime museum, Ferens Art gallery and Hull Truck theatre. Swansea too is full of arts and industrial history, as well as acting as a natural gateway to some of the best nature the UK has to offer including the Gower Peninsula - one of the most popular Areas of Natural Beauty in Wales.
The Sea (and nature)
Speaking of, it's interesting that a large proportion of the top 10 have close access to the coast and more generally beautiful rural areas to escape the UK's cities. Liverpool’s famous River Mersey may not just be a swansong to the Beatles in this instance but today helping to pull in visitors to explore its riverfront and further up its coastline along the Wirral. Swansea is a natural launchpad for visitors not just to its beautiful beaches but to the Brecon Beacoun mountains and further afield into Pembrokeshire. Nature remains a great pull for tourists and having easy access to the best bits of nature the British Isles has to offer can mean consistent footfall of guests for your properties throughout the seasons.
Sport
Roughly a million people on average go to watch live football at one of the main english leagues. It’s no surprise that the top 3 on this list boast top football clubs as they can support local and away fans for the weekend (despite both Hull and Swansea now back in the Championship after several years in the top flight).
Further, Hull is one of the heartlands of rugby league with 2 top league sides and rugby union dominates in Swansea. All this means more reasons for visitors to the town and more people to want a home away from home.
Universities
The top cities here are home each to 3 large universities and the student bodies that come with it. This is no coincidence. While students may not be taking up your serviced accommodation for a whole year, their friends and family that visit will. Further, the cities will need to facilitate the huge ecosystem of universities’ visiting teaching staff and general events calendar, so it’s no surprise that demand for AirBnbs and short term rentals remains high throughout the year.
Business
From networking conferences to some of the UK’s largest employers (e.g. Tata Steel in Swansea), this remains a surefire way to keep your properties occupied and at good premiums throughout the week. Good transport links to these cities helps to ferry people into town at ease. Both Hull and Liverpool even have their own airports for international workers which definitely enhances their claim to being one of the top uk cities to buy an Airbnb. Making sure your Airbnbs are in places where industry and networking is rife will help to ensure you keep your rooms full.
There you have it. What the best performing areas for Airbnbs and serviced accommodation have in common in 2023. It’s not enough to just have the sights from the top of the double decker bus like in London - catering to a diverse audience helps to keep demand high and constant throughout the year, and as ever it’s finding the bargains to maintain that good investor yield and profit.
If you are looking to buy an Airbnb, head to the Airbuy and Sell marketplace to find the best deals in your chosen areas.
And here are some more articles that you may enjoy from the world of Airbnb and serviced accommodation investing:
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