Airbnb continues to profit from the return of holidays, and homeowners utilising the service to house guests are expecting to see additional income as it increases in popularity. But just how much return on their investment can hosts expect?
Curious to find out, Uswitch.com/mortgages compared the average price of Airbnb properties in cities across Europe to average mortgage prices to discover the most profitable locations to own an Airbnb!
The cities where Airbnb could pay off a mortgage quickest
|
Rank |
City |
Average Airbnb rental price per night (£) |
Average monthly mortgage for a 3 bedroom property (£) |
Nights required to cover monthly mortgage payments |
Nights on Airbnb to repay entire mortgage |
| 1 | Dublin | £218.79 | £1,096 | 6 | 1,549 |
| 2 | Manchester | £173.44 | £1,124 | 7 | 2,004 |
| 3 | Riga | £141.34 | £967 | 7 | 2,117 |
| 4 | Milan | £183.60 | £1,381 | 8 | 2,327 |
| 5 | Rome | £141.34 | £1,165 | 9 | 2,549 |
| 6 | Porto | £91.74 | £814 | 9 | 2,744 |
| 7 | Brussels | £146.50 | £1,371 | 10 | 2,896 |
| 8 | Antwerp | £142.27 | £1,390 | 10 | 3,023 |
| 9 | Ghent | £139.00 | £1,419 | 11 | 3,156 |
| 10 | London | £277.27 | £2,937 | 11 | 3,277 |
You can find the full dataset of all 21 locations analysed here.
Dublin is the most profitable city to own an Airbnb
Homeowners in Dublin could use Airbnb to pay off their monthly mortgage faster than any other European city, Uswitch.com/mortgages can reveal. A three-bedroom home in the Irish capital requires average monthly mortgage repayments of £1,096. However, with Airbnb’s prices for similar homes costing an average of £218.79 per night, homeowners could fund their monthly mortgage repayments after renting their home for just six nights – with £216.74 leftover! This is almost half the time it takes homeowners in London and Ghent to make monthly repayments (11 nights a month).
Manchester is the second-best European city for Airbnb hosts to pay off their mortgages. With nightly rental prices averaging at £173.44, it takes only seven nights of renting for hosts to meet the average monthly expenses of £1,124. To pay off the entire mortgage, Manchester’s homeowners would have to rent approximately 2,004 nights (five years, five months and 27 nights) to meet the average loan of £307,696.
However, mortgages in London cost over 161% more (£803,868) than those in Manchester, and an average Airbnb in the English capital is £277.27 per night. This may be 60% more than the cost per night in Manchester (£173.44), but it is a considerably smaller contribution to a London homeowner’s mortgage payments. At this rate, it takes London’s hosts 11 nights of renting to meet their monthly mortgage costs: 4 more than in Manchester.
Riga is third in Europe
The Latvian capital of Riga is in third place, also requiring 7 nights of renting through Airbnb to meet monthly mortgage expenses, but taking 2,117 nights (five years, nine months and 17 nights) to match the entire loan. The average price of a three bedroom property in Riga is £185,196, the cheapest of all cities analysed! On the other hand, an Airbnb in Riga is £141.34 per night, 54% more than Porto (£91.74), the cheapest in the top 10. Despite a night in Riga costing no more than a night in Rome (£141.34) on average, hosts in the Italian capital will still have to rent their homes for an additional night (8 nights total) to meet their monthly mortgage costs.
Tips on getting a mortgage for a second home
Mortgages expert, Florence Codjoe, outlines some of the considerations to make before getting a second-home mortgage:
“Decide between a fixed or variable rate. As with all mortgages, you should decide whether you want a fixed or variable-rate deal. Variable rates might be lower initially, but if rates increase you could end up paying more overall than if you took out a fixed rate. Fixing your mortgage also means you’ll always know how much your ongoing mortgage repayments will cost.
“Wait to pay off your current mortgage. It could be worth waiting until you’ve repaid more (or even all) of your current mortgage. Waiting to pay off your current mortgage could help you get a better deal on a second home mortgage.
“Budget for stamp duty. Bear in mind that you’ll also have to pay an extra 3% in stamp duty on top of the normal rates when you buy a second home, so make sure you budget accordingly.”
Source: https://www.uswitch.com/mortgages/studies/best-european-cities-for-airbnb-mortgages/.
