7 years ago AirBnB was still offering only airbeds and shared spaces to its users and was competing with couchsurfer.com. Since then the company, lately valued at $30B,  has expanded to a variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties, and it’s currently offering 2.3M listings on the platform. As a result Airbnb became a prominent channel for many real estate investors, most of them renting and subleasing millions of properties.

As regulation tightens in NY and other cities around the US, we wanted to check what are the best cities to operate as an investor around the world.

The research was made using the data on Airdna, a data company that tracks the performance of Airbnb rental properties around the world.  By analyzing the occupancy, nightly rate, and revenue produced by over four million short-term rentals, Airdna is able to identify high yielding real estate investment opportunities.

City Average 1-bed monthly rent Average Revenue Highest 10% yearly revenue Average daily fee Average Occupancy Highest 10% ROI
1 Barcelona $787 $24,602 $35,732 $112 71% 278%
2 Prague $592 $14,562 $23,772 $67 68% 235%
3 Montreal $719 $16,905 $26,429 $86 66% 206%
4 Osaka $732 $16,651 $26,764 $73 70% 205%
5 Los Angeles $1,482 $34,861 $53,826 $144 76% 203%
6 Berlin $762 $17,864 $27,231 $84 70% 198%
7 Cape Town $637 $12,885 $22,087 $72 64% 189%
8 Lisbon $645 $15,286 $21,863 $69 70% 182%
9 Paris $1,185 $23,570 $38,716 $117 66% 172%
10 Rio de Janeiro $673 $13,904 $21,708 $83 58% 169%
11 Madrid $831 $18,017 $26,720 $81 71% 168%
12 Rome $1,055 $20,976 $33,006 $101 67% 161%
13 Toronto $1,164 $23,341 $35,115 $104 74% 151%
14 Melbourne $1,240 $25,273 $36,093 $109 75% 143%
15 São Paulo $601 $11,046 $16,901 $55 67% 134%
16 Milan $1,021 $17,954 $28,153 $94 65% 130%
17 Istanbul $513 $8,218 $14,139 $49 55% 130%
18 London $2,083 $36,115 $56,381 $163 71% 126%
19 Copenhagen $1,322 $21,615 $34,923 $123 62% 120%
20 Seoul $969 $16,164 $24,657 $67 74% 112%
21 Tokyo $1,243 $20,705 $31,535 $87 73% 111%
22 Tel Aviv $1,129 $19,127 $28,314 $97 65% 109%
23 New York $2,915 $39,434 $62,381 $176 72% 78%
24 Sydney $1,940 $27,375 $41,183 $124 73% 77%
25 Shanghai $1,483 $14,690 $23,107 $72 68% 30%

Airbnb has created an ecosystem of startups, like Airdna, Guesty and BeyondPricing , looking to cash in on the company’s success by offering services to hosts and guests, both of whom are becoming more sophisticated in how they operate their rentals and what they expect out of a stay.

Barcelona is currently leading the list with a 278% ROI, however, regulation may be the reason behind these great returns. According to Scott Shatford, CEO of Airdna “ There is a direct correlation between the number of Airbnb rentals in a city and the profitability of the average rental.   Airbnb hosts quickly expand to managing multiple units after the seeing early success with a single unit. Airbnb rentals are most profitable in highly regulated cities.  The lack of lodging supply allows Airbnb host to charge rates equal to or even above hotels.”