Top Global Markets for Airbnb Investment (Ranked)

05/01/2025

International Outlook Deal Book

Below is a ranked analysis of the best markets worldwide for investing in Airbnb-style short-term rentals, considering both return on investment (ROI) potential and ease of operation. Each destination includes data on property prices, rental demand (occupancy rates and nightly revenue), operating costs, management, financing, taxes/regulation, and foreign ownership factors.

1. Dubai, United Arab Emirates

Dubai tops the list for its robust tourism demand, high rental yields, and investor-friendly environment. A global business hub and tourist destination, Dubai offers year-round occupancy and premium nightly rates, with no property taxes and straightforward regulations for short-term rentals.

Real Estate Costs: Property prices in Dubai average around AED 1,558 per sq. ft (≈$424/ft²) in prime areas. Apartments typically cost ~$300–$500 per ft² depending on location, reflecting a rapidly growing market (+9% YoY in 2024).
Airbnb Demand & Revenue: Dubai’s short-term rentals enjoy about 70% occupancy with an average daily rate around $169, translating to roughly $42,500 in annual rental revenue per property (https://airbtics.com/best-airbnb-markets). The city’s mix of business and leisure travelers drives strong year-round demand.
Operational Overheads: Cleaning and maintenance services are readily available and affordable. Many hosts hire cleaners for a modest fee (e.g. ~$30–$50 per turnover for a 1-2 BR unit). Utilities and HOA fees in upscale buildings are the main ongoing costs aside from cleaning.
Property Management: A mature vacation rental industry means plenty of property management companies in Dubai. Management fees average ~15–25% of rental revenue for full-service management. Professional managers (often multilingual) make it easy for remote owners to handle guest turnover and compliance.
Financing Availability: Local banks offer mortgages to foreign investors. Expats can typically borrow up to 50–75% LTV, with interest rates around ~4–5% for fixed-rate loans (https://www.kredium.ae/home-loans-for-expats). Mortgage terms up to 25 years are available, making leveraged investment feasible for non-residents with good credit.
Taxes & Regulations: Dubai has no annual property tax or capital gains tax, and rental income is generally untaxed at the federal level. Short-term rentals are legal and encouraged; hosts must register for a permit (through the Dubai Tourism department) and pay a small nightly “Tourism Dirham” fee for guests. Overall, the regulatory climate is very STR-friendly.
Foreign Ownership: Foreigners can own freehold property in designated areas of Dubai with full title rights. The purchase process is transparent (often in English) and governed by clear laws. There are minimal barriers to foreign ownership, and investors can repatriate rental income freely (the UAE dirham is pegged to USD, reducing currency risk).

2. Bali (Indonesia)

Bali is a hotspot for vacation rentals, known for its low acquisition costs and high rental yields. This Indonesian island offers a unique combination of affordable villas, year-round tourism, and inexpensive labor for operations – though foreign ownership rules and legal structures require careful navigation.

Real Estate Costs: Bali property is relatively affordable. Villas average about IDR 14 million per m² (≈$910/m², or ~$85/ft², while smaller inland homes can be as low as ~$130,000. Most foreign investors buy leasehold titles (typically 25–30 year leases (https://www.thebalihomes.com/invest-in-bali-properties) since Indonesian law restricts freehold ownership to citizens.
Airbnb Demand & Revenue: Bali’s vacation rentals see robust occupancy (~65% on average) and a healthy ADR (~$93 per night) (https://airbtics.com/best-airbnb-markets). This yields roughly $18–20K annual gross revenue per property. Certain areas (e.g. Canggu, Seminyak) can achieve even higher nightly rates for well-located villas, especially during peak seasons (dry season and holidays).
Operational Overheads: Cleaning and maintenance costs are low. Labor is inexpensive – many owners hire full-time housekeepers for only a few hundred dollars per month, or pay ~$15–$25 per cleaning session. Pool and garden maintenance services are likewise affordable. These low overheads significantly boost net ROI.
Property Management: Bali has an abundance of property management and villa rental agencies catering to foreign owners. Full-service management (marketing, guest check-in, cleaning coordination) typically costs ~20% of rental revenue. Given language barriers and local nuances, most investors use these services. Reputable management firms are readily available in all major tourist hubs.
Financing Availability: Local mortgages are generally **not** available to foreign buyers in Bali. Investment is mostly done in cash or via developer financing. Some foreign investors finance by refinancing homes in their country. Indonesian banks lend to locals at ~7–10% rates, but foreigners without Indonesian residency must rely on cash or private lending.
Taxes & Regulations: Short-term rentals in Bali fall into a grey area legally. Technically, renting a villa for under 30 days requires a tourism accommodation license and tax registration. In practice, many villas operate with a “pondok wisata” license obtained via a local nominee or business entity. The government imposes a 10% rental tax, though enforcement has been relatively lax in tourist areas. It’s important to use a local notary and perhaps form a PMA company for compliance if doing rentals at scale.
Foreign Ownership: Indonesia prohibits foreign individuals from owning land freehold in Bali. Foreign investors typically use leasehold contracts or set up an Indonesian limited company to hold property. Leaseholds of 25+ years with extension options are common and provide secure use rights. While the legal setup adds complexity, it is a well-trodden path – thousands of foreigners lease villas in Bali. Engaging a qualified local lawyer is essential to structure ownership and ensure your investment is protected under Indonesian law.

3. Lisbon & Algarve, Portugal

Portugal has become a favorite for Airbnb investors thanks to its booming tourism (urban and coastal), relatively reasonable real estate prices, and welcoming stance toward foreign buyers. In particular, Lisbon’s year-round city tourism and the Algarve’s beach vacation market offer strong rental yields, though investors must navigate evolving local regulations.

Real Estate Costs: Property prices in Portugal have been rising. Nationally, the median home price is about €1,721/m² (≈$170/ft²) (https://www.globalpropertyguide.com/europe/portugal/price-history), with Lisbon city around €2,500+ per m² (>$230/ft²). In the Algarve coastal region, prices vary by town – popular towns (like Lagos or Albufeira) range roughly €2,000–€3,000 per m². Compared to many Western European markets, acquisition costs remain moderate for the rental income potential.
Airbnb Demand & Revenue: Lisbon’s short-term rentals enjoy high occupancy (~83%) and solid nightly rates (~€99, or $105) , yielding about €29K ($31K) in yearly revenue for a typical listing (https://airbtics.com/annual-airbnb-revenue-in-lisbon-portugal). Coastal vacation areas in southern Portugal also perform well, especially in summer – Algarve occupancies often exceed 70% with premium summer ADRs (>$200 in peak months for villas). Seasonality is a factor (slower winter), but overall demand is strong, and Portugal sees growing off-season tourism from digital nomads and retirees.
Operational Overheads: Cleaning services in Portugal cost more than in Asia or LATAM but are manageable. Expect to pay around €50–€80 ($55–$85) per turnover cleaning for a 2-bedroom apartment in Lisbon. In smaller Algarve towns, cleaners may charge ~€12–€15/hour. Maintenance and utilities are moderate; Portugal’s labor costs are lower than Northern Europe, though higher than developing countries. Many owners find it easy to contract reliable cleaning and handyman services, especially in areas with expat communities.
Property Management: There’s a well-developed ecosystem of property managers and Airbnb co-hosts. Full-service management fees range 15–25% of rental income. In Lisbon and the Algarve, numerous agencies cater to foreign owners (handling guest communication, check-ins, and cleaning). Given Portugal’s popularity with expats, it’s relatively easy to find English-speaking management, making remote ownership practical.
Financing Availability: Portuguese banks offer mortgages to both residents and non-residents. Foreign investors can typically borrow ~60–70% LTV. Interest rates are around 4–5% in 2024 (often variable, tied to Euribor). Mortgage approval requires documentation of income/assets, and the process can be bureaucratic but achievable. Many EU buyers take advantage of local financing, while some non-EU investors use cash or financing from their home country for speed.
Taxes & Regulations: Portugal imposes an annual property tax (IMI) of ~0.3–0.45% of value, and rental income is taxable (a flat 28% rate for non-residents, though deductions or NHR regime can reduce this). Importantly, short-term rental rules have tightened in Lisbon: new Airbnb registrations in certain historic central districts were suspended to curb housing shortages. Outside these “containment zones,” and in most Algarve municipalities, obtaining an Alojamento Local (AL) license for short-term renting is still feasible – it requires safety inspections and registration. Compliance (displaying an AL license number) is enforced in cities. Despite stricter rules in some areas, Portugal remains generally supportive of vacation rentals, especially in tourist-designated zones.
Foreign Ownership: Portugal places no restrictions on foreign property ownership – foreigners can buy real estate outright with the same rights as locals. The buying process is straightforward; non-EU investors formerly flocked to Portugal’s “Golden Visa” program (now winding down), but even without it, buying and holding property is easy. All transactions are in Euros, so investors bear some currency risk if their home currency isn’t EUR. Overall, Portugal offers a stable legal environment and clear title registry, giving foreign investors confidence in their property rights.

4. United States (Top Vacation Markets)

The United States offers a wide range of high-performing Airbnb markets, particularly in vacation destinations and mid-sized cities. While real estate is higher-cost, the U.S. has reliable legal systems, easy financing for locals, and well-established short-term rental infrastructure. Certain regional markets stand out for strong ROI, balancing solid rental income with relatively affordable prices.

Real Estate Costs: Home prices in the U.S. vary dramatically by location. As of 2024, the national median home price is around $420,000 (roughly $200–$220 per ft² for a typical 2,000 ft² home). The best ROI markets tend to be in smaller cities or vacation areas with lower entry costs. For example, in **Columbus, GA** (AirDNA’s top 2024 market), median home prices are in the low $200,000s (https://www.lodgify.com/blog/invest-vacation-rental-us/). Even in popular vacation spots like parts of Florida or the Smoky Mountains (Tennessee), you can find condos or cabins in the $300K range, far cheaper than big coastal cities.
Airbnb Demand & Revenue: U.S. vacation rentals see healthy demand. In markets like **Orlando, Florida** (Disney area), occupancy averages ~68% with ADR around $180/night, which yields about $45,000 in annual revenue per property. Likewise, destinations such as the Smoky Mountains, coastal Carolinas, or ski towns in Colorado often post occupancies in the 50–70% range and nightly rates from $150 up to $300 (seasonally). Urban STR markets have seen more saturation lately, but unique drive-to vacation spots continue to perform well.
Operational Overheads: Cleaning costs in the U.S. are higher than elsewhere – typically $100+ per turnover for a 2-3 bedroom house (as cleaners often charge $25–$40 per hour). Linens and amenities also add to expenses. However, because many U.S. guests pay a separate cleaning fee, hosts often pass through this cost. Maintenance services are widely available even in small towns (though labor can be pricey). Overall, operating expenses (cleaning, utilities, repairs) are often estimated at ~30–50% of rental income in U.S. markets, which is factored into ROI calculations.
Property Management: The U.S. has a very developed vacation rental management industry. Owners can choose from local mom-and-pop property managers or national platforms. Full-service management fees are about 20–30% of gross rents (for marketing, guest management, and cleaning coordination). In high-tourism regions like Florida or Hawaii, competition among property managers is high, which keeps service quality up. Self-management is also feasible thanks to platforms like Airbnb and automation tools, though hands-on effort or a local co-host is needed for tasks like cleaning and maintenance.
Financing Availability: U.S. investors benefit from accessible financing – local buyers can obtain 30-year fixed mortgages for second homes or investment properties. As of early 2025, 30-year mortgage rates are around 6.5–7% (https://tradingeconomics.com/united-states/30-year-mortgage-rate). Lenders typically require 20–25% down for an investment property. Foreign investors can also finance U.S. properties, though options are more limited (some banks offer loans to non-residents with larger down payments, or foreigners pay cash). The deep U.S. lending market and low fixed-rate loans greatly enhance ROI for local investors using leverage.
Taxes & Regulations: The U.S. has no federal restrictions on short-term rentals – rules are local. Many top Airbnb markets are in STR-friendly jurisdictions (e.g. vacation towns or certain counties). However, some cities (NYC, Los Angeles, etc.) have strict regulations or bans on short rentals (https://nomadcapitalist.com/finance/investing-in-airbnb-best-and-worst-markets-for-airbnb-investment/), so investors focus on markets with lenient rules. Owners typically pay property tax (~1% of value annually, varies by state) and must collect lodging taxes from guests (usually 5–15% depending on city/county). Rental income is subject to income tax, but expenses and depreciation can be deducted. Overall, while tax obligations in the U.S. are significant, they are predictable and factored into pricing (guests often cover occupancy taxes as extra fees).
Foreign Ownership: The U.S. imposes no blanket prohibitions on foreign real estate ownership. Foreign individuals can buy and own property with full title rights. The main considerations are tax withholding on rental income (Foreign owners file IRS returns and may face a 30% withholding if not set up properly) and estate tax planning if holding U.S. assets. Practically, many foreign investors form an LLC or corporation to hold U.S. rentals. From an operational standpoint, foreign owners will need a local team or manager, but the mature market makes this straightforward. The combination of strong legal protection and lack of ownership barriers makes the U.S. an attractive, if somewhat lower-yield, safe haven for property investment.

5. Croatia (Dalmatian Coast)

Croatia has emerged as an Airbnb gem in Europe, especially along the Dalmatian Coast (Dubrovnik, Split, etc.). With its stunning Adriatic seaside, Croatia attracts high-paying summer tourists. Property prices are lower than Western Europe, and short-term rental yields are excellent, though the market is highly seasonal and foreign buyers must adapt to local processes.

Real Estate Costs: Croatia’s real estate is mid-priced and climbing fast. As of late 2024, average apartment prices nationwide are around €2,400–€2,800 per m² (~$230–$260/ft²) . In Zagreb, the capital, new apartments average about €2,830/m² (https://www.globalpropertyguide.com/europe/croatia/price-history). Coastal Dalmatia is pricier: in Split or Dubrovnik, expect ~€3,000/m² and up for prime locations. Even so, a nice seaside condo might be €200k–€300k, which is attractive compared to Italy or France.
Airbnb Demand & Revenue: Coastal Croatia sees very high occupancy in summer and decent bookings in shoulder seasons. In Dubrovnik, for instance, short-term rentals boast around an 81% occupancy rate and an ADR of roughly €136 (≈$145). Many hosts can gross on the order of $30–50K per year in rental revenue, given the strong summer rates. The caveat is seasonality: the vast majority of bookings occur between May and September, so the annualized occupancy (if open year-round) might average ~50–60%. Still, peak-season cash flow is among the best in Europe.
Operational Overheads: Cleaning and maintenance services are available in tourist centers but at a cost closer to Western standards. A turnover cleaning for a two-bedroom apartment runs around kn250–350 (~$40–$55). Given the seasonal peak, many owners hire temporary staff or cleaning agencies during summer. Maintenance issues (plumbing, A/C) can be handled by local tradesmen; costs are moderate (lower than Western Europe, but higher than Asia). Overall, operational overhead is reasonable, and many costs are only incurred in the active season.
Property Management: Many Croatian coastal hosts self-manage or have a local family member manage, but there are also professional agencies in Dubrovnik, Split, and other tourist areas. Management fees are about 20% of revenue. The challenge can be finding an English-proficient manager in smaller towns, but in major destinations there are companies geared to servicing foreign-owned rentals. Additionally, some developers of new condo-hotel projects offer on-site rental management for owners.
Financing Availability: Local mortgages in Croatia are available but not commonly used by foreign buyers. Banks do lend to non-residents from certain countries (especially EU citizens) with around 30–40% down, but interest rates are relatively high (~5%+ and often variable). Many foreign investors purchase with cash or finance through home-country loans. As an EU member state, Croatia’s financial system is stable, but non-EU investors might face more paperwork to secure a loan.
Taxes & Regulations: Croatia requires hosts to register their properties and pay a annual flat tourist tax per bed (and income tax on rental earnings, typically around 10% after deductions or via a simplified lump-sum regime). The regulatory environment for short-term rentals is generally lenient (https://investropa.com/blogs/news/croatia-real-estate-market) – vacation rentals are commonplace and encouraged as tourism infrastructure. There is no yearly property tax on second homes in Croatia (as of 2025), which is a big advantage. However, Croatia is considering implementing a property tax in the future. It’s important to obtain a rental license (a straightforward process) and report guest stays to the local authorities (usually done online) to stay compliant.
Foreign Ownership: Foreigners can own Croatian property, with some restrictions mainly lifted since EU accession. EU citizens can buy real estate freely; non-EU citizens may need to obtain permission based on reciprocity treaties (e.g., Americans and Canadians can buy residential property in Croatia due to reciprocal agreements). In practice, foreign buyers hire a local attorney to navigate the purchase – the process involves a title check and notarization, similar to elsewhere in Europe. Once purchased, the property deed is in the owner’s name; there is no forced local partnership or lease-only limitation. The biggest hurdle might simply be the bureaucratic process (which can be slow). Overall, foreign investors are actively purchasing in Croatia’s coast, drawn by the high yields and now-secure ownership rights in this EU country.

6. Mexico (Beach Destinations)

Mexico offers some of the best yields in the Americas, especially in its popular beach destinations (Cancún, Tulum, Playa del Carmen, Puerto Vallarta, etc.). Property prices are lower than in the U.S. or Europe, while tourist demand from North America remains strong. Investors do need to consider local ownership structures for coastal land and fairly hands-on management in certain areas.

Real Estate Costs: Mexican resort real estate is a mix of affordable and upscale. In Tulum (a trendy hotspot), condos sold in 2023 averaged around $166,000 for ~48 m² units (https://www.rivieramayablue.com/2025/02/10/tulum-real-estate-market-report-year-over-year-change-2023-2024/) – that’s roughly $3,470/m² (≈$320/ft²). Generally, one can find modern condos in Cancún or Playa del Carmen for $2,500–$3,000 per m². Prices in Los Cabos or Puerto Vallarta are a bit higher for oceanfront. Foreigners buying near the coasts must use a bank trust (fideicomiso) or Mexican corporation to hold the title (due to constitutional restrictions in the “restricted zone” within 50 km of the shoreline). This adds a small setup cost (~$1,500–$2,000) and annual trustee fees, but is a standard practice and grants full control to the buyer via the trust.
Airbnb Demand & Revenue: Tourist occupancy rates in Mexico’s vacation areas typically range from 50% to 70% on average. For example, Cancún sees roughly 59% occupancy at an ADR of about $61 , whereas Puerto Vallarta averages ~59% occupancy but with a higher ADR (~$107) (https://airbtics.com/best-airbnb-markets). These metrics equate to annual revenues on the order of $12K in Cancún and $22K in Puerto Vallarta for an average listing (https://airbtics.com/best-airbnb-markets). The Riviera Maya (Cancún–Tulum corridor) remains one of the most visited regions in the world, but also has a large supply of rentals, which keeps occupancies moderate. Seasonality is significant, with winter and spring yielding peak rates (many U.S./Canada travelers), and a slower hurricane season in the fall.
Operational Overheads: Cleaning and maintenance are relatively low-cost in Mexico. Housekeeping services might cost around MXN $500–$800 per cleaning (≈$25–$40 USD) for a small apartment. Many owners also pay a local “property caretaker” a modest monthly stipend to watch over the unit, handle minor repairs or guest needs. Supplies and utilities are inexpensive (electricity can spike with A/C use, but many hosts add an extra fee for excessive electricity to encourage conservation). Overall, day-to-day operating costs are quite low, boosting net margins for Mexican STRs.
Property Management: In major tourist markets, there’s a robust selection of property managers and Airbnb co-hosts. Typical full-service fees are 20–25% of rent. It’s common for developers in areas like Tulum to partner with management companies, so investors can plug into a rental program. English-speaking management is easy to find in touristy regions, as many Americans and Canadians run local agencies. Owners should vet managers for reliability – occasional reports of mismanagement make due diligence important. With the right manager, remote ownership of a Mexican rental can be quite hands-off.
Financing Availability: Mexico’s mortgage market for foreigners is limited. A few Mexican banks and international lenders offer financing to non-residents, but typical terms are 50% LTV and ~8-12% interest, making it unattractive. Most foreign buyers purchase with cash or use financing from their home country (such as a home equity loan in the U.S.). Developer financing is sometimes available for pre-construction deals (e.g. 50% down and the rest over a year or two). In short, leverage is harder to obtain, so many investors focus on markets like Mexico where cash deals still yield high returns.
Taxes & Regulations: Mexico has mild taxes on property and rental income. Annual property taxes (predial) are very low – often only 0.1% of the property value or a few hundred dollars per year. Rental income earned in Mexico by foreigners is subject to Mexican income tax, but many owners operate informally for short-term stays. Formally, one can register with SAT (tax authority) and either pay ~25% withholding on gross rental income or ~30% on net income if electing to deduct expenses (a tax advisor can help pick the optimal method). Some tourist cities/states (e.g. Quintana Roo, which includes Cancún/Tulum) charge a small lodging tax (~3% of gross receipts) and require hosts to register. Enforcement of these rules has been increasing via Airbnb’s agreements to collect taxes on behalf of hosts. Regulations on short-term rentals are generally lax – Airbnb is legal throughout Mexico, with only light local licensing in a few cities. As always, it’s wise to consult a local accountant to stay on the right side of tax laws.
Foreign Ownership: Outside of the coastal/border restricted zones, foreign individuals can hold title directly in their name. Within the restricted zone (which includes most desirable beach areas), the bank trust (fideicomiso) mechanism is the norm – it grants the foreign buyer all rights to use, rent, or sell the property, with a Mexican bank technically holding title for their benefit. This system has been in place for decades and is very secure, though it adds an extra party (the bank) to the mix. Practically, foreign investors buy and resell coastal properties routinely. Additionally, foreigners can form a Mexican corporation to buy property (sometimes used if doing multiple investments or commercial ventures). Overall, legal barriers are low: closing a transaction as a foreigner in Mexico is straightforward with a notario handling the paperwork. Many areas have significant American/Canadian expat ownership, reflecting the accessibility of Mexican real estate investment.

7. Costa Rica (Guanacaste & Central Pacific)

Costa Rica has long been a favorite for North American investors and retirees. Its stable democracy, use of the US dollar in many transactions, and heavy tourism flow make it an attractive short-term rental market. Beach towns in Guanacaste (Tamarindo, Flamingo, etc.) and the Central Pacific (Jaco, Manuel Antonio) are particularly lucrative for vacation rentals, albeit with pronounced high and low seasons.

Real Estate Costs: Costa Rican property prices are moderate. In the popular Guanacaste province, apartments average about $2,896/m² (≈$270/ft²) and houses about $2,221/m² (https://www.globalpropertyguide.com/latin-america/costa-rica/price-history) in mid-2024 – reflecting significant annual growth. For example, a 3-bedroom ocean-view home might be listed around $300K–$500K depending on proximity to the beach. Prices in the capital, San José, are lower (apartments ~$2,300/m²). Overall, you get more for your money in Costa Rica than in the U.S. or Europe, though construction to North American standards in prime areas keeps values relatively high.
Airbnb Demand & Revenue: Short-term rentals in Costa Rica’s tourist hubs experience moderate occupancy but high nightly rates. A beach condo in Tamarindo may only be occupied ~45–50% of nights annually, but commands an average nightly rate around $300–$350 (https://www.airdna.co/vacation-rental-data/). This can translate to $30K+ USD in yearly revenue. Manuel Antonio and other prime destinations similarly achieve premium ADRs (luxury villas often $500+ per night in peak season). The high season (Dec-April) coincides with dry weather and an influx of foreign tourists, during which occupancy is near 100% for many listings, whereas the rainy season sees a significant drop-off in bookings.
Operational Overheads: The cost of services in Costa Rica is moderate. Cleaning a rental might cost around c.10,000–15,000 CRC (~$15–$25) per hour – so roughly $50 for a full clean of a house. Many owners hire a local property manager or caretaker who, for a few hundred dollars a month, oversees cleanings, pool service, and landscaping. Given the climate, outdoor maintenance (gardens, pools) is an important expense to account for. Utilities are reasonable except electricity, which is costly – running air conditioning heavily will increase costs, so some owners pass on part of this cost to guests or install solar. All told, operational costs run lower than in the U.S. but higher than in, say, Southeast Asia.
Property Management: In tourist areas, it’s common to find bilingual (Spanish/English) property management firms. They typically charge ~20% of rental income for full management. These managers handle guest check-ins, cleanings, and maintenance, which is crucial if you’re not living in Costa Rica full-time. The pool of professional managers is smaller than in the U.S., but many expats have started services catering to vacation homes, so quality is improving. Owners should ensure their manager is officially registered if they will be handling money, as there have been occasional issues with informal arrangements – but in general, many investors successfully manage remotely with local help.
Financing Availability: Local banks do lend to foreigners in Costa Rica, but terms aren’t very attractive. Loans to non-residents may require 50% down or collateral, with interest rates often in the 7–10% range. The mortgage process is slow and documentation-heavy. Therefore, a large portion of foreign buyers pay cash or use financing from outside (for example, pulling equity from a home in the U.S.). Owner financing from a seller is sometimes available as well. The upside is that property taxes are very low (only 0.25% annually), so carrying costs on an owned property are minimal if you buy with cash.
Taxes & Regulations: Costa Rica treats rental income as business income – foreign owners renting to tourists are supposed to register and pay income tax (progressive, roughly 10–15% effective after deductions). The government has also implemented a 13% VAT on short-term rentals, which platforms like Airbnb are now collecting from guests and remitting. It’s important to comply with these taxes, although historically enforcement was hit-or-miss, it’s tightening via Airbnb’s cooperation. Short-term rentals are legal throughout the country; there’s currently no national license required beyond standard business registration, and STRs haven’t faced the kind of local restrictions seen elsewhere. In fact, the tourism board ICT often partners with vacation rentals. As for an exit strategy, note that Costa Rica has no capital gains tax for personal property sales – a perk for investors.
Foreign Ownership: Costa Rica is very welcoming to foreign property owners – **no restrictions** on foreigners owning land or homes (except some regulated maritime zone properties). A foreigner has the same ownership rights as a citizen. Many investors purchase via a Costa Rican corporation (SRL) for liability and estate planning, but it’s not mandatory. The purchase process uses a notary public (who is also an attorney) to transfer title, and title insurance is available though not commonly used. Because of the significant expat communities, many real estate agencies and legal offices specialize in servicing foreign buyers. All this makes purchasing and holding real estate in Costa Rica relatively secure and straightforward, contributing to its popularity as an investment locale.

8. Spain (Andalucía & Canary Islands)

Spain boasts several high-performing Airbnb markets, from sunny coastal regions like Andalucía (Costa del Sol) to the year-round vacation hubs in the Canary Islands, and cultural city destinations. Spain’s tourism numbers are among the highest in the world, supporting strong rental demand. While property prices and regulations vary by region, the right locations can offer excellent returns and a mostly business-friendly environment for short-term rentals.

Real Estate Costs: Spain’s housing prices are moderate by Western Europe standards. The national average is about €2,049/m² as of early 2025 (https://wtgspain.com/blog/) (~$190 per ft²). Coastal and island hotspots run higher: for instance, Málaga province averages ~€2,760/m² (https://wtgspain.com/blog/spanish-houses-prices-in-2024). In practical terms, a beachfront apartment on the Costa del Sol might cost €250,000–€400,000 depending on size and luxury, whereas a similar property in a less touristy inland town would be far cheaper. Foreign investors have a wide range of options from budget condos in Alicante to luxury villas in Marbella. Overall, the cost of acquisition relative to potential rental income is attractive, especially in southern Spain.
Airbnb Demand & Revenue: Spain sees very high occupancy in popular tourist areas. For example, Málaga (a gateway to Costa del Sol) reports ~83% occupancy and around $104 ADR, or roughly $30K annual revenue per listing. Similarly, in Sevilla (Seville), occupancy can top 75–80% with ADRs over $125. The Canary Islands (Tenerife, Gran Canaria, etc.) benefit from year-round tourism – winter sunseekers keep occupancy rates around 70% even in off-season, with strong European demand. Barcelona and Madrid have very high tourism demand as well, but local regulations significantly cap the ability to do short-term rentals (in Barcelona it’s nearly impossible to get a new license). Thus, investors target areas with a combination of strong tourist flow and manageable regulations, such as Andalucía, the Valencian Coast, and the islands.
Operational Overheads: Operating costs in Spain are comparable to Portugal’s. Cleaning a small apartment might cost ~€50. Many hosts charge a separate cleaning fee to guests to cover this. Linens and turnover supplies are readily outsourced if needed. Because many Spanish rentals are apartments, HOAs (community fees) are an expense – these can range from €50 to €150+ per month depending on amenities (pools, etc.). Utilities are moderate; internet is inexpensive and high-quality. Spain’s labor costs are mid-range in the EU, so hiring help isn’t prohibitive. In tourist areas, you’ll also find many services (maintenance, cleaning) offered by other expats or locals used to short-term rental needs.
Property Management: Spain has a large professional rental management sector, especially in coastal regions that have catered to British and German vacation-home owners for decades. You can find agencies in every resort town that will fully manage your Airbnb. Fees typically 20–25%. They handle guest meet-and-greets (sometimes required in person for handing keys or IDs, per local law), as well as cleaning coordination. Given language barriers and regulatory compliance (registering guest IDs with police, etc.), having a local manager is very helpful for foreign owners. The good news is that these services are plentiful and often bilingual.
Financing Availability: Spanish banks lend to non-residents, usually up to 60–70% LTV. Interest rates are ~4%+ (variable rates are common, tied to Euribor). Non-EU investors might face slightly stricter terms or need to open a Spanish bank account. Spain also allows interest-only mortgages for an initial period in some cases, which can improve cash flow. Overall, financing is accessible, though some buyers choose to pay cash to avoid the sometimes lengthy approval process.
Taxes & Regulations: Regulation is the biggest variable in Spain. Each region and city can set its own STR rules. Some areas are very permissive (e.g., many towns in Costa del Sol simply require a registration of your tourist apartment with the regional government, with no caps on numbers). Other areas are strict: Barcelona prohibits short-term rentals in most apartments unless it’s a licensed tourist apartment (license scarcity has driven them to cost hundreds of thousands of euros to acquire). Madrid has zones where short-term rentals are restricted to ground-floor or first-floor units. The Canary and Balearic Islands have their own licensing regimes (Mallorca, for instance, requires a costly license and limits rentals to detached homes in certain zones). Despite these patchwork rules, plenty of locations remain essentially “open for business” – especially in traditional holiday coasts. From a tax perspective, property owners pay annual IBI (property tax) roughly 0.4–1.1% of cadastral value, plus rental income tax. Non-EU foreigners face a 24% tax on gross rental income (since they cannot deduct expenses under the non-resident tax scheme), whereas EU residents can pay 19% on net income after expenses. Many owners mitigate this by renting mid-term (≥1 month) part of the year, or by structuring ownership through an EU entity if possible. Additionally, Spain has a VAT-like tax (IGIC) in the Canary Islands for rentals, and some regions have tourism taxes per guest. In summary: lucrative market, but investors must ensure the specific locale permits short-term rentals and plan for the taxes.
Foreign Ownership: Spain places no restrictions on foreign buyers. International investors (from Europe, Americas, Asia, etc.) regularly purchase property – in fact, foreign buyers make up a significant percentage of sales in coastal Spain. The legal system is stable and property rights are well-protected (Spain has a proper land registry and uses notaries for transfers). One consideration: if a non-EU investor spends more than €500,000 on property, they become eligible for Spain’s “Golden Visa” residency – a potential perk beyond the scope of rental ROI. Even below that, buyers can obtain short-term visas to visit their property as needed. Spain’s ease of purchase and high transparency (with lawyers and notaries ensuring clear title) gives confidence to foreign investors entering the market.

9. Italy (Cities & Countryside)

Italy combines global tourist appeal with the allure of authentic experiences, making its cities and countryside attractive for Airbnb stays. While Italian real estate has appreciated, it remains more affordable than say France or the UK, and foreigners can buy freely. The ROI in Italy can be solid in the right locales – such as Florence, Rome, or popular countryside spots – though high operating costs and bureaucracy can moderate returns.

Real Estate Costs: Italian property prices vary by region. Nationally, as of late 2024, the average asking price is around €2,250/m² (about $210/ft²) (https://dolce-living.com/post/cost-to-buy-italian-property-2024/). Major cities command more: e.g., Milan ~€5,400/m² (~$500/ft²) and Rome’s center ~€4,000/m². In contrast, smaller towns or southern regions can be <€1,500/m². For Airbnb investments, many look at cities like **Florence** (~€4,300/m²) or **Rome**, where tourist demand is year-round. A decent two-bedroom in a historic center might be €350k–€500k. Alternatively, countryside villas in Tuscany or Puglia can range widely but often price in the €200k–€400k range for something that could be a desirable vacation rental. Overall, Italy presents opportunities across price points, from rustic village homes to luxury city apartments.
Airbnb Demand & Revenue: Italy’s tourist draws are strong. In Venice, for example, Airbtics data shows about 75% occupancy and an ADR of ~$164, yielding roughly $44,000 annually per listing . Rome and Florence rentals also see high occupancy (70%+), though Rome has introduced limits on new STR licenses. The summer months and holiday periods are peak everywhere. The Italian lakes (Como, Garda) and coastal Liguria/Amalfi see extremely high summer demand but quieter off-seasons. The key in Italy is location: a well-located property in a tourist center can expect very consistent bookings and premium rates (e.g. a Florence centro storico apartment can fetch €150-€200/night). Thus, ROI for prime locations remains attractive even as regulations tighten in some cities.
Operational Overheads: Operating in Italy can be a bit costly. Cleaning fees in cities might be €60–€100 per turnover for a multi-bedroom unit (Italian cleaners command ~€15–€20/hour in urban areas). Many Italian rentals also provide breakfast or restock kitchen basics as a nice touch, adding minor cost. Maintenance and repairs can be sluggish – getting something fixed might take longer due to the notorious Italian bureaucracy and trades scheduling. Also, utilities like electricity and gas are on the higher side in Europe. It’s common to see higher monthly condo fees (especially for older buildings with elevators, central heat, etc.). All told, running an Airbnb in Italy requires a higher expense budget (some owners estimate 40–50% of gross income going to expenses including management). However, the high nightly rates in top locations help offset this.
Property Management: In major tourist cities, professional management companies exist and often offer multilingual services. Expect fees ~20–30%. In smaller towns or rural areas, it might be harder to find specialized STR managers; often one hires a local friend or caretaker to greet guests and clean. Some international companies (like Sonder, etc.) operate in big cities, but many Italian hosts still manage semi-privately. Regulation in some cities requires hosts to be on-site or have a designated representative for check-ins, so having a local co-host is important if you’re remote. Overall, the availability of management is decent where tourism is strong, but investors should plan for a bit more hands-on coordination in Italy than in countries like Spain or the U.S.
Financing Availability: Italian banks do lend to foreigners, especially EU citizens. Typical LTV is 50–60% for non-residents. Rates are about 3–4% (Italy’s mortgage rates have been relatively low, though rising somewhat). The process can be quite bureaucratic and slow. Some buyers forego financing due to the red tape. If you do finance, note that Italian loans often have shorter terms (15-20 years) unless you’re a resident. Many foreign investors pay cash given moderate prices. One advantage in Italy: if you become a tax resident, the mortgage interest on one property can be deductible against rental income.
Taxes & Regulations: Italy has begun clamping down on uncontrolled Airbnb growth in historic cities. For example, Florence and Venice have discussed limitations on new short-term rental permits in their old towns. Rome bans short-term rentals in rented apartments (to protect long-term tenant supply) but allows it in owner-occupied or non-apartment properties. Enforcement is still evolving. Nationally, Italy has a registration system – hosts must register guests with local authorities and, if not using an agent, might need a VAT number for multiple properties. On taxes: rental income by non-residents is taxed at 30% on net income (or a favorable 21% flat rate if you opt for the cedolare secca scheme on long-term rentals, which doesn’t directly apply to STR, though some hosts list 30+ day stays to use it). There’s also a local tax (~€1–€5 per guest per night, varying by city) that hosts collect (the famous “tourist tax” in cities like Rome). Property taxes (IMU) apply to second homes (about 0.4–0.76% of value annually, depending on municipality). Overall, compliance in Italy is getting stricter: expect to register your rental and pay the required taxes, as the government is actively integrating Airbnb data to ensure taxes are paid. Still, plenty of people successfully operate Airbnbs, especially in touristy areas that encourage tourism.
Foreign Ownership: Italy does not restrict foreign ownership. Anyone, regardless of nationality, can purchase property (some minor restrictions exist for properties of historical significance or agricultural land, but these rarely affect typical investors). Transactions are handled by notaries and are quite secure. Many foreigners own second homes in Tuscany, Rome, etc., so infrastructure (English-speaking realtors, lawyers) is in place. A unique aspect: Italy occasionally offers enticing programs like the “€1 homes” in depopulating villages – while not directly an Airbnb play for most, it indicates how open Italy is to foreign investment in real estate. Importantly, if you spend significant time in Italy, plan for the visa/residency aspect – owning property doesn’t automatically grant residency (unless you invest €250k+ in certain regions under investor visa programs). But purely from an ownership perspective, Italy is welcoming, and owning property is straightforward with the right local assistance.

10. Thailand (Phuket & Bangkok)

Thailand is a popular tourist paradise that, on paper, offers high rental yields – low property prices and millions of visitors. Cities like Bangkok and resort areas like Phuket, Pattaya, and Chiang Mai have huge Airbnb demand. However, Thailand is ranked lower due to significant legal hurdles for short-term rentals and foreign ownership limitations that complicate operations, despite the attractive ROI metrics.

Real Estate Costs: Thai properties are relatively inexpensive. Across Thailand, the average house price is about ฿145,000/m² (≈$4,000/m², or $370/ft²) (https://www.investasian.com/property-investment/thailand-house-prices/), but condos in many areas are far cheaper. In Bangkok, a small condo averages around ฿135,000/m² (~$3,700/m²). That means you can buy a new 30 m² city condo for ~$110,000. In Phuket or Chiang Mai, $2,000–$3,000 per m² is common for condos, so a nice resort condo might be $80k–$150k. Foreigners are limited to owning condominiums (up to 49% of a building) or leasing land, so most invest in condos in their own name, which keeps entry prices relatively low.
Airbnb Demand & Revenue: Tourist demand in Thailand is very high. In Bangkok, prior to enforcement crackdowns, hosts saw ~68% occupancy with ADR around $45 for typical listings – reflective of the lower cost accommodations in the city. Resort areas can achieve higher nightly rates: a well-located Phuket villa might rent for $200/night with 50+% occupancy. Annual revenues for a 2-bedroom in a prime tourist area can reach $20K–$30K in a good year. **However**, short stays (<30 days) in Thailand are technically illegal in most cases (see below), which means much of this rental activity operates under the radar or via loopholes.
Operational Overheads: Operating costs in Thailand are low. Cleaning services are inexpensive – one can have a condo cleaned for $15 or a larger villa for $25–$30. Many properties come with on-site management or maintenance for a modest fee (especially in condos or villa estates). Utilities are relatively cheap, except sometimes higher tariffs for foreigner-owned condos. If one were to run a rental legally, you’d factor in the cost of staff for a hotel license, but in practice most individual hosts just pay normal cleaning and upkeep. Because labor and supplies cost less (Thailand’s cost of living is a fraction of Western countries), profit margins can be very high *if* the property is consistently rented.
Property Management: There are plenty of property managers in Thai tourist destinations – many catering to expat owners. Typical fees ~20% of revenue. In condo buildings, sometimes the building management will offer rental management services. Language is generally not a barrier in major tourist areas (lots of Thai management staff speak English, and many foreign-run agencies exist too). The real management challenge is ensuring legal compliance: since nightly rentals can violate law, some managers will only facilitate 30-day+ rentals or will ask owners to assume the risk. Nonetheless, the practical availability of cleaners, guest check-in services, etc., is good in places like Phuket, Pattaya, and Chiang Mai.
Financing Availability: Foreigners have limited access to Thai bank loans. A few banks offer mortgages to non-residents, but typically with low LTV (50% or less) and higher rates (~8%+). Most foreign buyers in Thailand pay cash or find alternative financing (some Singapore or Hong Kong banks lend on Thai condos to their nationals). Developer financing for off-plan purchases is sometimes an option (e.g., pay 50% over construction period and 50% on completion). Local mortgage rates for Thais are ~6–7%, but foreigners seldom qualify. As such, Thailand is often a cash-buyers market for international investors.
Taxes & Regulations: Here lies the main issue: by Thai law, renting out a residential property for less than 30 days without a hotel license is illegal. Authorities have periodically enforced this, especially in Bangkok, where some hosts were fined. In tourist resort areas, enforcement has been sporadic, and many hosts still operate short-term rentals quietly. The Thai government has not created a clear path for individual Airbnb rentals, so this legal cloud persists. Tax-wise, rental income is subject to personal income tax (15% to 20% typically), but many foreign owners are not tax residents in Thailand and may not report small-scale rental income. There is also a local housing tax that some municipalities levy on rental properties (around 12.5% of the assessed annual rental value), though in practice this has not been strictly applied to casual Airbnb hosts. If one goes ‘legal’, it would mean either renting 30+ days at a time (which avoids the hotel law) or getting a hotel license – the latter is only viable for larger properties and involves meeting safety codes, registering a Thai company, etc. The bottom line: the regulatory environment is unfavorable for short Airbnb stays, and investors should be aware of the compliance risks (and possibly stick to monthly rentals).
Foreign Ownership: Foreigners cannot own land in Thailand, and can only own condos (with the 49% building quota). This means standalone villas must be bought via long-term lease (often 30 years with option to renew) or through a Thai company structure (which has complex nominee shareholder rules). Many investors stick to condos for simplicity – buying a condo in your own name is straightforward if the foreign quota isn’t filled. The title is secure and registered to the foreign owner. For condos, foreign ownership is not a barrier aside from currency control formality (funds must come from abroad in foreign currency and be documented). If you did pursue a villa via a lease or company, it is more complicated and requires legal counsel. Because of these restrictions and the legal rental issues, some investors choose to invest in Thailand via a locally-managed condotel or resort program that effectively handles compliance. Despite these challenges, those who do invest in Thailand often do so for the lifestyle synergy – they might use the property part of the year and rent it out the rest. The returns can be high, but the ease-of-operation is clearly lower, placing Thailand at the bottom of this top-10 ranking.