The best countries for investment property returns

With the rise of staycations and the ability to work remotely from anywhere with an internet connection, more and more people are turning to Airbnb for a little extra cash to pay off their home loans while they’re away.

As experts in home loans, we have analysed more than 90 of the world’s most popular tourist hotspots to find out which destinations are the most profitable for prospective Airbnb hosts. We also looked at which cities are best for conventional landlords and which cities have the largest and smallest gaps between Airbnb and rent prices.

The 5 best cities to earn as a private landlord

1.  San Francisco, United States

Average monthly rent: US$5,035
The city where locals can make the most by renting out their properties privately is San Francisco, where the average rent is more than $5,000 a month. San Francisco is a very densely populated city and an important cultural, commercial and financial hub, with high levels of income and cost of living.

2.  New York City, United States

Average monthly rent: US$4,708
Another major US city had the second-highest average rent, this time on the West Coast. New York’s average rent comes in at $4,708 and, like San Francisco, the Big Apple is a hugely important city and has even been referred to as the capital of the world.

3.  Hong Kong, Hong Kong

Average monthly rent: US$3,436
Hong Kong is one of the most densely populated cities in the world, which leads to high demand for rental properties and a high average cost of $3,436 per month. Hong Kong is also one of the most developed cities in the world and is home to the most ultra-high net worth individuals and skyscrapers per capita.

4.  London, United Kingdom

Average monthly rent: US$3,352
The most expensive European city for private rental prices is London, with an average of $3,352. The UK’s capital is a huge city that draws millions of people with its strong presence in many fields such as the arts, commerce, entertainment, fashion, finance and more.

5.  Los Angeles, United States

Average monthly rent: US$3,323
Completing the top five most expensive cities for rent is Los Angeles, with an average monthly price of $3,323. LA attracts many people looking to catch a break in the Hollywood film industry, as well as those just looking to enjoy the Californian sun, and has grown to be a huge and diverse city.

Top 5 cities with the biggest gap between rent and Airbnb prices

1.  Mugla, Turkey: 1,027%

This Turkish city 30 kilometres from the Aegean coast is a popular tourist destination, due to its rich history, sunny weather and temperatures that can reach up to 35ºC (95ºF) in summer. Locals have taken full advantage of this, charging an average of more than $2,000 per month on Airbnb compared to the average local rent of $186.

2.  Mecca, Saudi Arabia: 940%

One of the holiest sites in Islam, Mecca comes second on our list. It’s the destination for Hajj, the annual pilgrimage undertaken by most Muslims at least once in their lifetime. The average rent per month is $457 in Mecca, compared to average Airbnb prices of $4,751.

3.  Denpasar, Indonesia: 838%

The capital city of the Bali province has experienced a boom in tourism in recent years with travellers flocking to the island city to enjoy its white sandy beaches, perfect for surfing or sunbathing. Airbnbs in this region are in high demand as it’s one of the most visited places in Asia, with an average monthly price of $3,479 compared to the average rent of $371.

4.  Chiba, Japan: 746%

As well as being one of the best cities to earn with Airbnb, Chiba is also high on the list of the biggest differences between rent and Airbnb earnings, charging an average of $6,434 on Airbnb compared to $576 in rent. Chiba is popular with tourists for its proximity to natural beauty spots such as Kujukuri Beach and Mount Nokogiri, and savvy homeowners have recognised the demand for this location.

5.  Dammam, Saudi Arabia: 687%

Dammam is an important centre for the Saudi oil industry and so attracts many business travellers. However, those who visit the city should maybe consider renting accommodation privately, as Airbnbs in the city are subject to a markup of 687%.

Top cities with the smallest gap between rent and Airbnb prices

1.  Hong Kong, Hong Kong: -48%

One of the few cities where the average Airbnb is cheaper than local rent prices is Hong Kong, which is known for its very high rent prices (averaging at just under $3,500). This high demand on rentals isn’t surprising, given that Hong Kong is one of the most densely populated places in the world. The difference between the average Airbnb price and private rent costs is 48%.

2.  Singapore, Singapore: -17%

The island city-state of Singapore takes third place in our ranking, with a difference of $521 between average Airbnb prices and monthly rent. This city is popular with tourists for its eclectic mix of cultures, high level of public safety and culinary delights.

3.  Bangkok, Thailand: -10%

Thailand’s capital is another city where Airbnb prices are cheaper than renting privately, with a difference of 10%. Bangkok is a vast and vibrant city known for its contrasting nightlife scene and cultural landmarks, such as Buddhist temples like Wat Arun and Wat Pho.

4.  New York City, United States: -9%

This city attracts tourists from all over the world and is jam-packed full of cultural and culinary attractions, as well as parks and museums. Despite the opportunity to earn more than a little extra cash due to the high demand from tourists, locals actually charge 9% less on Airbnb per month than rent prices.