Are Condos A Good Investment: Viability of Short-Term Condo Rentals in 2025

We’re sure we aren’t the only ones to notice that condo rentals have become quite popular in recent years. Whether it be an oceanfront condo in Miami or a mountain view condo in Utah, there are plenty of them to go around.

Condos can be a very appealing asset for aspiring investors looking to purchase their first property or those simply looking to expand their portfolios. So, the question then becomes, are condos a good real estate investment as a short-term rental? Drawing on our experience as Airbnb Superhosts, we explore this question by discussing the pros and cons of condo rentals, backed by relevant data on their performance as short-term rental properties.

Short-Term Condo Rentals Pros and Cons

First, let’s get straight into the pros and cons of buying a condo as a short-term rental investment. Here’s a list of things that you should consider.

Pros of Buying a Condo as a Short-Term Rental

Cheaper Prices

One of the most advantageous aspects of going for a condo unit instead of a standalone home is the lower purchase price. Condo options are way cheaper on average than houses within the same area.

For example, in Miami-Dade County, the median sale price for a single-family home was around $640,000 but was only around $415,000 for condos in August 2024. This is a common trend across most locations, not only in the US but worldwide.

Easy to Furnish and Maintain

Most condo units are only composed of one to two bedrooms. Their general floor area is smaller than their counterpart houses, making them much easier to furnish. As you might know, strategic property furnishing can help your rental be more attractive to potential guests. Having that smaller space requires less furniture to fill it up.

The smaller total area also makes condos way easier to clean and maintain than traditional houses. It saves you both the time and effort to clear out your cleaning checklist before each turnover.

Attractive Amenities

Do you know one thing all condominiums have in common? The amenities. Almost all of them have pool access, fitness centers or gyms, clubhouses or multipurpose rooms, well-maintained grounds, and enhanced security. All of these are something you’d have to build or manage if you were to buy a traditional house instead. These can help make your listing more attractive to guests.

Another underrated amenity that we don’t get to see mentioned quite often is the cleaning and on-site maintenance that most condos would have. You might be able to skip the vacation rental cleaning services and hire the ones onsite instead. However, we do still recommend doing a deep cleaning, whether yourself or through professionals every once in a while.

Cons of Buying a Condo as a Short-Term Rental

Condo Community HOAs: Fees and their Restrictions

Condos have HOAs creating rules and collecting condo association fees. Typically, you’ll be required to pay monthly fees that go toward the maintenance of the condominium building. This is something that not all investors, especially beginners, think of. These condo fees can vary but will likely depend on the size of your unit, amenities within the condo, and location.

You’ll also be forced to follow the standard regulations established by the HOA. This will usually revolve around:

• Use of common areas
• Leasing durations/ additional condo ownership requirements
• Pet policies
• Noise and nuisances
• Parking (may require additional fees)
• And approval process for renovations, among others.

Depending on your location, traditional houses can also have HOAs, but their regulations are typically more lax than the ones managing condos.

Enhanced Competition

If you’re eyeing a condo unit in a popular area, chances are there might already be someone there who runs a short-term rental business. There are hundreds, if not thousands, of units within a complex; it’s not that hard to find a handful of them to be rented out for short-term use. This can lead to fiercer competition and can make it harder to land guests. In these situations, having your listing optimization, pricing strategy, and level of service on points becomes more important.

Limited Customization Potential

One of the biggest downsides of using a condo as a short-term rental, at least in our eyes, is the limited customization you can do. As Superhosts, we pride ourselves in having very unique properties that instantly standout from the rest. Our rentals have giant chessboards, giant connect fours, aesthetic camping areas, outdoor hangouts, and more. This allows us to charge a premium while still maintaining high occupancy.

Well, you can’t do that stuff in most, if not all, condos. You might be able to get a bit creative and insert a unique amenity or two, but for the rest, you’ll have to share with the entire complex. Your overall control over the property is just way too limited in our opinion.

Overview of the Short-Term Rental Condo Market

Now, let’s move on to the statistics and metrics surrounding condominiums, houses, and the short-term rental market as a whole. Using this information, you can easily make more informed decisions about the best investing route for you.

Average Condominium Purchase Price

Let’s start with the purchase price. The average purchase price for single-family homes in 2023 was $416,000, while the average condo only cost about $316,600. This indicates that more traditional detached homes are about 15% more expensive than condos, making them a potentially good investment property for those looking for a cheap entry into the STR market.

It’s also one of the main reasons why they are so attractive as a beginner rental property. Most people entering the game are looking for the cheapest potential investment they can make. Of course, these values and differences can slightly differ depending on the location.

Breaking Down Condo Occupancy and Revenue

Another important metric you might want to consider is the occupancy rate differences between condos and houses. In terms of short-term rental occupancy, condos have a about 4% higher occupancy rate than houses.

For 2024, condos around the US see a 57.4% occupancy rate, while standard single-family houses only have an average of 53.2%. That’s a pretty considerable discrepancy and can play a huge role in your overall bottom line.

However, it’s also worth considering that condos can’t usually accommodate the same number of persons as a typical house can. According to the National Multifamily Housing Council (NMHC), about 75% of condos are either one or two-bedroom properties, while a majority of houses sit within the 3 to 6-bedroom range. This limits your potential market size from small to medium groups, unlike houses that can potentially cater to larger bookings.

To get a better grasp of a condo vs a home comparison, let’s level the playing field and zoom into a market. Here’s a comparison of the Miami Airbnb Market in 2024:

Miami Market Data: 1-2 Bedroom Apartments and Houses

• Occupancy Rate: 59%
• Average Annual Revenue: $39K
• Average Daily Rate (ADR): $218.7
• RevPAR: $126.6

Miami Market Data: 1-2 Bedroom Houses

• Occupancy Rate: 56%
• Average Annual Revenue: $27.5K
• Average Daily Rate (ADR): $160.1
• RevPAR: $88.2

Miami Market Data: 1-2 Bedroom Apartments and Condos

• Occupancy Rate: 60%
• Average Annual Revenue: $42.8K
• Average Daily Rate (ADR): $237.7
• RevPAR: $139.8

Note: Airbnb does not provide a separate filter specifically for condos; instead, it groups them together with apartments under a single property type.

As we can see, condos (and apartments) generate a higher occupancy rate, annual revenue, ADR, and RevPAR compared to similar-sized houses. This can make condos a great potential short-term rental investment for those located in Miami.

Using BNBCalc To Compare A Condo Vs. House As a Short-Term Rental

While the market data we provided above does give solid insight into your potential investment viability, one way you can be more secure is by using BNBCalc to run a property analysis. You’ll be supplied with more in-depth data, like annual revenue, cash flow, and cap rate, for the specific property you are eyeing, not just the market. It’s based on historical data from nearby, relevant properties that are already active short-term rentals.

We went on Zillow and found two neighboring properties in Isle of Palms, South Carolina. One was a 2-bedroom condo, while the other was a 6-bedroom house. We then copied the link and used BNBCalc to run a property analysis on both properties to see which could potentially make a better real estate investment.

The 2-bedroom Condo returned these metrics:

• Annual Revenue: $89,670
• Profit (Cash Flow): $23,869
• Cap Rate: 10.7%

Check out the actual property analysis here.

On the other hand, the 6-bedroom house returned with these values:

• Annual Revenue: $238,431
• Profit (Cash Flow): $11,967
• Cap Rate: 7.2%

Check out the actual property analysis here.

Note: This isn’t financial or investment advice.

While we understand that these aren’t exactly an apples-to-apples comparison, these are the only active Zillow listings we could find within the same vicinity.

As you can see, while the house has a higher projected annual revenue, the condo can potentially offer higher profits. The condo also has a solid 3% cap rate advantage, which, on paper, makes it a better overall investment.

As a whole, this comparison was meant to showcase the importance of doing your due diligence before deciding on whether you should invest in a condo or house within the same location.