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Short Term Rental vs Long Term Rental in Chicago

short term rental vs long term rental in chicago

Key Takeaways:
  • For traditional landlords in Chicago who want to up their rental collection, short-term rentals are a way to go. But for it to work, Airbnb hosts also need to do their part. If you’re already a short-term rental operator, incorporating data analytics into your strategy will give you a ton of insights when it comes to charging a nightly rate.

Introduction

Pundits have declared that the 2023 recession is inevitable. As someone who owns one or several rental properties in Chicago, you are surely restrategizing to make the most out of your real estate investments. So, we’re here to guide you through. 

Whether you own a short-term or long-term rental property in Chicago, this article is for you!  We believe that economic analysts should not be the only people who have access to numbers. You too can make sound investment decisions in the upcoming downturn by relying on easy-to-use data analytics.

Differences between Short Term Rental Vs Long Term Rental

Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.  

On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals. 

Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend.  It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own. 

If you’re interested in having more streams of income via real estate, here’s everything you need to know about rental arbitrage in Chicago.

Rental Regulations in Chicago

Chicago Long-Term Rentals 

Traditional forms of rentals in Chicago are regulated by the Residential Landlord and Tenant Ordinance. As a nudge to improve the quality of housing conditions in the city. it highlights the rights and responsibilities of both the property owners and tenants. The ordinance is a comprehensive guide that covers rental agreements, security of deposits, foreclosure, and habitability of the rental property. 

Chicago Short-Term Rentals

The Chicago rental market trends have influenced the local government to oversee the industry in the city. Short-term rentals are regulated by Chicago’s Shared Housing Ordinance. This compels property owners to obtain necessary licenses from Business Affairs and Consumer Protection.  Licenses are valid for 1 year, and hosts have to pay $125 annually for every registered unit. Only then that they can list and advertise their Chicago rental properties on Airbnb, VRBO, HomeAway, and similar websites. 

Advantages of Long-Term Rentals in Chicago:

Below are the advantages of operating a long-term or traditional rental property in Chicago:

  • Strong population – With over 2.5 million residents, Chicago is the largest city by population in Illinois and third in the United States. This fact alone can guarantee landlords a strong market demand for long-term rental properties.
  • A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average monthly rent in Chicago is $1,950.
  • Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.
  • Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended. 

Advantages of Short-Term Rentals in Chicago:

On the other hand, here are perks that short-term rentals can offer to Airbnb hosts in Chicago:

  • Moderate seasonality – While the seasonality is 69%, your unit will still get booked in most parts of the year.
  • Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand
  • Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.
  • Feel more control over the property –  Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance. 

Do you make more money on Airbnb or long-term rentals in Chicago?

According to Airbtics’ Data, you can earn more from an Airbnb in Chicago. For example, a 2-bedroom property can earn $1,850 / month or $22,200 annually. But an Airbnb with the same property size close to the area can earn $67,431 per year. The earning can come from the average nightly rate of $335 with a 52% occupancy rate.

Short-Term Rental Markets in Chicago

We already have an idea of short-term vs long-term rental income in Chicago. Airbnb is the way to go. Chicago is already a rental market – and a very huge one at that. Not for nothing this city’s market is regarded as one of the short-term rental trends in the US 2023. But what landlords do not know is Chicago can be broken down into smaller markets where you can monitor your closest competitors. 

It just so happens that Airbtics has this innovation that allows users to create a Custom Market. Let us now dive deep into the top rental markets in Chicago and learn the best property features with the highest occupancy rate and corresponding annual revenue:

1. Lincoln Park
  • Existing Airbnb listings: 233
  • Average daily rate: $206
  • Airbnb occupancy rate: 71%
  • Airbnb annual revenue: $57,441
  • Best property size: 2 bedrooms
    • Occupancy rate: 75%
    • Annual revenue: $69,908
2. Wicker Park
  • Existing Airbnb listings: 153
  • Average daily rate: $195
  • Airbnb occupancy rate: 69%
  • Airbnb annual revenue: $52,310
  • Best property size: 2 bedrooms
    • Occupancy rate: 79%
    • Annual revenue: $54,007

3. Logan Square

  • Existing Airbnb listings: 289
  • Average daily rate: $135
  • Airbnb occupancy rate: 74%
  • Airbnb annual revenue: $40,940
  • Best property size: 2 bedrooms
    • Occupancy rate: 77%
    • Annual revenue: $44,879

Maximize Your Rental Income

Every investor wants to get the most out of their investment This is understandable because their capital can be a few hundred thousand to even a million dollars. Real estate investments can be a bit tricky since there’s really nothing much that you can do with the property. Instead, homeowners can strategize their rental business for their financial freedom to be unscathed in the upcoming economic recession. This can allow homeowners not only to keep but also increase their market rent in Chicago.

For traditional landlords who want to up their rental collection, short-term rentals are a way to go. But for it to work, Airbnb hosts also need to do their part. If you’re already a short-term rental operator, incorporating data analytics into your strategy will give you a ton of insights when it comes to charging a nightly rate. As we have seen, Airbtics can provide us with macro and micro views of rental markets for you to arrive at a data-driven decision!

Take your Airbnb to the next level, try this powerful Short-Term Rental Profit Calculator

Make your Airbnb in Chicago Recession Ready

short term rental vs long term rental in chicago
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Best Areas to Invest in Airbnb in Queensland: Top locations for rental properties around Brisbane

Start your Airbnb journey learning the best areas to invest in real estate in Brisbane, Queensland and secure your cash-on-cash return!

Start your Airbnb journey learning the best areas to invest in real estate in Brisbane, Queensland and secure your cash-on-cash return!

Key Takeaways

  • Queensland’s overall financial stability, population growth, low crime rates and reasonable living cost has helped various hosts to earn a nice income stream.
  • Discover what real estate investors can expect when investing in Airbnb properties in Brisbane and nearby areas.
  • Find out the top 10 profitable areas for real estate investments nearby Brisbane along with their respective Airbnb data. 

Introduction

In the northeastern region of Australia lies one of its largest states, Queensland, which is bordered majestically by the Coral Sea and the Pacific Ocean. Considered the “origin of the planet Earth”, Queensland is a slice of paradise where people can find unique experiences while they get in touch with mother nature.

The capital of Queensland, Brisbane stands out for its cosmopolitan yet laid-back environment. The city is a top international tourist destination, which serves as the gateway to the Gold Coast. Moreover, it’s one of the favorite cities to live in Australia since it offers a high quality of life, good weather conditions, and great location.

According to our previous blog where we talk about the most profitable Airbnb cities in Australia, Brisbane stood out ranking high in the list. Furthermore, Airbnb mentioned Brisbane, QLD as one of the top trending global destinations of 2022!

Wondering which areas in Brisbane offer the best property investment opportunities? We got you!

In this article, we talk about the best areas to invest in rental properties in Brisbane, Queensland and what expectations to have for real estate investments here. Continue reading to learn more.

Why invest in Rental Properties around Brisbane?

Brisbane is an interesting market to invest in from the perspective of property investors if we consider the many advantages it offers. Check out some of the major reasons why investment properties in Brisbane are an excellent idea: 

  • Stable financial situation

Overall, Queensland’s economy is the top-performing in Australia, thanks to the steady population growth, solid job market, and good housing finances as confirmed by CommSec State of the States. Hence, Brisbane also enjoys a healthy and booming economy as the major business hub in the region.

  • Reasonable cost of living 

One of the main reasons for the population growth in Brisbane is the reasonable living cost since other cities like Sydney and Melbourne have increased a lot over the past years. Consequently, investors can see Brisbane’s housing and rent market in a positive light since its demand is strong with reasonable property prices and higher rental returns.

The average cost of living is lower than other major metropolitan areas in the country and the median property price in Brisbane is currently at A$772K

  • Plethora of leisure activities

Brisbane is one of the top tourist destinations in Queensland. The city has a great cultural, musical, and art scene with fantastic art galleries, museums, live theatre performances, and top-tier restaurants. Brisbane is home to many landmarks and places of great interest like the City Botanic Gardens, King George Square and City Hall, and Lone Pine Koala Sanctuary among others.

If you love the beach, then you will like the fact that Brisbane is close to the best beaches in the country like Noosa, Gold Coast, and Sunshine Coast, which are amazing options for a day trip or weekend getaway! 

  • Top market for Airbnb investment properties in Australia

Brisbane not only has one of the hottest rental markets in the country, but it’s also one of the best places for Airbnb investment properties in Australia since it offers promising revenue for hosts. Thus, if you’re looking for a great passive income stream, then you should consider Airbnb because it can help you earn more money than traditional renting.

Is Airbnb Profitable in Brisbane?

Airbtics confirms that Airbnb Investment Properties in Brisbane are lucrative. Still, it’s good to have in mind that the level of profitability depends on your location and property type.

However, if you’re still having doubts about purchasing an investment property, you can always start doing rental arbitrage in Brisbane, which is a legal way of earning passive income with a minimal budget! Either way, it’s best to be prepared beforehand and learn about the existing Airbnb regulations to avoid breaking the rules.

According to Airbtics’ data, an Airbnb host can expect annual revenue of A$70,444 with a steady occupancy rate of 95% for operating a 2-bedroom property in Brisbane.

best areas to invest in queensland

Source: Airbtics Dashboard

Best Areas to Buy an Investment Property near Brisbane, QLD

Queensland is the second largest state in Australia with over 1,000 cities, towns, and villages. If we explore further, we can find that Brisbane has around 190 established suburbs. Consequently, you can expect that the profitability of each area is different. 

So you may wonder “where should I buy an investment property in Brisbane?” Don’t worry, we got you! So, check out the best neighborhoods and nearby cities in Brisbane, QLD that are highly recommended for starting an Airbnb business:

airbtics-logo-300x87
Location Number of Airbnb Listings Best Number of Bedrooms Median Property Price Airbnb Annual Revenue GRY
Fortitude Valley, Brisbane 124 2 Bedrooms A$459,000 (2 BD) A$82,610 18%
Spring Hill, Brisbane 42 2 Bedrooms A$450,000 (2 BD) A$78,059 17.35%
South Brisbane 263 1 Bedroom A$380,000 (1 BD) A$64,904 17.08%
Redcliffe, Brisbane 44 2 Bedrooms A$450,000 (2 BD) A$76,030 16.90%
Hamilton, Brisbane 42 2 Bedrooms A$599,000 (2 BD) A$75,648 12.63%
Gold Coast, QLD (79km away) 3,305 2 Bedrooms A$499,000 (2 BD) A$100,819 20.20%
Bribie Island, QLD (90km away) 251 3 Bedrooms A$530,000 (3 BD) A$70,602 13.32%
Sunshine Coast, QLD (108km away) 1,839 2 Bedrooms A$500,000 (2 BD) A$71,314 14.26%
Toowoomba, QLD (127km away) 237 3 Bedrooms A$380,000 (3 BD) A$66,603 17.53%
Hervey Bay, QLD (290km away) 558 2 Bedrooms A$395,000 (2 BD) A$51,949 13.15%

Airbnb Location

Airbnb Dataset

  • Total Number of Airbnb Listings: 124
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$459,000
  • Airbnb Annual revenue: A$82,610
  • Gross rental yield: 18%
  • Total Number of Airbnb Listings: 42
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$450,000
  • Airbnb Annual revenue: A$78,059
  • Gross rental yield: 17.35%
  • Total Number of Airbnb Listings: 263
  • Best bedroom size: 1 bedroom
  • Median property price (1 bedroom): A$380,000
  • Airbnb Annual revenue: A$64,904
  • Gross rental yield: 17.08%
  • Total Number of Airbnb Listings: 44
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$450,000
  • Airbnb Annual revenue: A$76,030
  • Gross rental yield: 16.90%
  • Total Number of Airbnb Listings: 42
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$599,000
  • Airbnb Annual revenue: A$75,648
  • Gross rental yield: 12.63%
  • Distance from Brisbane: 79 kilometers
  • Total Number of Airbnb Listings: 3,305
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$499,000
  • Airbnb Annual revenue: A$100,819
  • Gross rental yield: 20.20%
  • Distance from Brisbane: 90 kilometers
  • Total Number of Airbnb Listings: 251
  • Best bedroom size: 3 bedrooms
  • Median property price (3 bedrooms): A$530,000
  • Airbnb Annual revenue: A$70,602
  • Gross rental yield: 13.32%
  • Distance from Brisbane: 108 kilometers
  • Total Number of Airbnb Listings: 1,839
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$500,000
  • Airbnb Annual revenue: A$71,314
  • Gross rental yield: 14.26%
  • Distance from Brisbane: 127 kilometers
  • Total Number of Airbnb Listings: 237
  • Best bedroom size: 3 bedrooms
  • Median property price (3 bedrooms): A$380,000
  • Airbnb Annual revenue: A$66,603
  • Gross rental yield: 17.53%
  • Distance from Brisbane: 290 kilometers
  • Total Number of Airbnb Listings: 558
  • Best bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): A$395,000
  • Airbnb Annual revenue: A$51,949
  • Gross rental yield: 13.15%

Source: Airbtics Dashboard

Summary

Nearby cities and neighborhoods in Brisbane offer a variety of great investment opportunities to property investors. There are many profitable locations that can bring attractive rental yields and annual revenue. However, it’s always recommended to analyze them carefully!

After getting an overview of the best areas to invest in Queensland, go further and take a look at Airbtics’ free Airbnb calculator, so that you can maximize profitability and stand out among your competitors.

Unlock Worldwide
Short-Term Rental Data
Find unsaturated neighborhoods with the highest occupancy history.

Unlock Worldwide
Short-Term Rental Data
Find unsaturated neighborhoods with the highest occupancy history.

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