The growth of Los Angeles Airbnb rentals has occurred at an unprecedented pace over the past couple years. More people than ever are using platforms like Airbnb, Expedia, HomeAway, VRBO, and Booking.com to stay at homestyle accommodations. With the sprawling nature of the city and a hotel shortage in many neighborhoods, many vacation rental providers have set themselves up to benefit from the industry’s uprising.
In every Los Angeles neighborhood, there is a select group of hosts who have been able to stand above the rest in terms of performance. These hosts offer beautiful properties, provide top notch service, and are able to effectively optimize pricing to maximize income. While each neighborhood offers the chance to be successful for those who position themselves right, certain areas have proven to have exceptionally high potential.
The Hollywood region attracts a great mix of business travelers in the film industry and tourists looking to explore the famous sites. Many guests that come through Hollywood and its nearby surroundings are what we refer to as “price insensitive” guests. This means they are willing to spend quite a bit of money for the right place. So perhaps it comes as no surprise that some of the highest grossing properties in Los Angeles are located around Hollywood. For hosts in Hollywood, we recommend not having too tight of a budget for the initial furniture and design investment as the ROI on well put together places here is very strong. It’s also important to note there is a massive shortage of places three bedrooms and bigger, so homes of that size are highly sought after.
Downtown Los Angeles
The supply of short term rentals in downtown Los Angeles has grown rapidly in the past two years, meaning the competition is there and won’t be going away anytime soon. But like any other market, there is a reason people are trying to get in. The demand on Airbnb has grown at an even faster pace than supply as more companies see the platform as a feasible business travel alternative to hotels. The city has also made significant investments in the downtown core, making it a more desirable place to stay for leisure travelers. With high demand and expensive hotel daily rates, the opportunity for hosts to provide a more desirable alternative is more present than ever.
Marina Del Ray / Venice Beach
Unlike the previously mentioned areas, Marina Del Ray and Venice Beach are much more appealing to tourists than business travelers. They are also more established vacation rental hubs as many hosts have been renting short term well before Airbnb emerged into the mainstream. While the market is more mature than Downtown and Hollywood, much of the competition is taking a more outdated approach to their offering meaning a host up to date with the current short term rental trends can do quite well.
Westlake / Koreatown
Two or three years ago, the Westlake and Koreatown neighborhoods were among the least established short term rental hubs in the Los Angeles region. Today, they are quickly growing areas on the supply side from a year over year percentage perspective yet the total volume of units available has not kept up with demand. Many hosts also tend to go after a budget consumer despite the large number of price insensitive travellers willing to pay more for a good experience. There is lots of opportunity for professional hosts who know how to set a place up and operate at a high level to earn good income in these areas, especially until their competition catches up to what the market is demanding!
Silver Lake / Echo Park
The Silver Lake / Echo Park neighborhoods are perhaps the most surprising on this list, yet quite a few hosts have done extremely well in these areas. The average nightly rates for homes are quite high in the peak season and the market is much less seasonal than a beach area like Venice / Marina Del Ray. There is also not a significant amount of competition relative to demand, especially on platforms like Booking.com and Expedia. The region is very attractive to family travelers and an overall great place for hosts to run a profitable Los Angeles Airbnb.
Like in many industries, Los Angeles is a place with so much opportunity and wherever you are its about making the most of it. Many of the highest earning properties are in neighborhoods outside of this list, so definitely don’t get discouraged if your area wasn’t mentioned. The key is to offer a great product (i.e. well put together property) and service your guests at hotel levels. Once the reviews pick up, you’ll quickly establish yourself as a leading host in your neighborhood and stand out from your competition.