Some Dallas and Fort Worth residential real estate owners may be better off renting their investment properties as vacation stops.
The Dallas Business Journal analyzed data from AirDNA and Zillow to determine whether properties earn more annual revenue as a short- or long-term rental.
In five Dallas ZIP codes, predominantly in the central and northern parts of the city, it’s more lucrative to rent out a home on sites like Airbnb than to have long-term tenants. Homeowners with property near TCU’s campus also could benefit from renting their houses out on a short-term basis.
The difference between annual revenue on a short-term rental and a long-term rental went as high as 57 percent and as low as 4 percent in Dallas. The largest gap was in the 75211 Cockrell Hill ZIP code, where an Airbnb could net a property owner $30,120 a year, while rent from a tenant would only bring in $16,740.
Lower Greenville, Oak Lawn and the Bishop Arts District neighborhoods all saw about a 20 percent difference in revenue between short-term and long-term rentals. Short-term rentals made roughly $5,500 more a year than properties with long-term tenants.
One ZIP code in Fort Worth made more money off long-term leases than short term rentals. Homes in the 76110 ZIP code, containing the Fairmount neighborhood and some of south Fort Worth, made on average $1,676 more when homes were leased out.
The two other neighborhoods with significant data were near the Texas Christian University campus and in the Como and Westover Hills neighborhoods, where Airbnbs and other vacation rentals on average made $2,533 and $6,040 more than leased homes respectively.
The data set from AirDNA utilized ZIP codes that had 10 or more properties with at least 270 booked or available days on Airbnb or Vbro. The Zillow data showed rental price listings for single-family homes, condo and co-ops and duplexes and triplexes in corresponding ZIP codes to the AirDNA data.
The Business Journal overlaid median yearly revenue for both types of rentals from August 2018 to July 2019 and found that five ZIP codes in Dallas and three ZIP codes in Fort Worth had significant data in both categories. While revenue does not include expenses like cleaning and upkeep, the number can be indicative of which venture is more valuable in those neighborhoods.
Overall, Fort Worth and Arlington had the highest revenue generating homes on Airbnb and Vbro, according to AirDNA data. However, Fort Worth had the largest year-over-year revenue drop among the largest cities in the nation.
According to the Fort Worth Star-Telegram, Fort Worth City Council recently discussed adding permitting to their city code, which currently restricts Airbnbs to neighborhoods zoned for commercial and industrial use.
Arlington, home to attractions like AT&T Stadium and the upcoming Globe Life Field, has long debated on what to do with short-term rentals and in April voted to ban short-term rentals across large swaths of the city.