Chicago, Illinois: Market data, Laws & Investor Guide

Chicago, Illinois has emerged as a premier destination for Airbnb entrepreneurs in 2024. The Windy City's vibrant culture, iconic attractions, and thriving tourism industry make it an attractive market for short-term rental investments. In fact, Chicago Airbnb hosts earned an impressive 32% more than the typical U.S. host in 2023, showcasing the lucrative potential of this market.

The city's Airbnb market has shown remarkable resilience and growth. As of June 2024, Chicago boasts 7,952 active Airbnb listings, with a staggering 78% being entire properties. This trend indicates a strong demand for private, self-contained accommodations among travelers visiting the city.

Chicago's strategic location and well-connected transportation infrastructure make it easily accessible for both domestic and international visitors. The city welcomed over 58 million tourists in 2023, providing a constant stream of potential guests for Airbnb hosts. With an average daily rate of $174 and an occupancy rate of 65%, Chicago offers hosts the opportunity to generate substantial revenue.

Moreover, the city's diverse neighborhoods cater to a wide range of traveler preferences. From the trendy Wicker Park to the artistic Pilsen, Chicago's unique charm attracts visitors seeking authentic, immersive experiences. Airbnb hosts can capitalize on this demand by offering distinctive properties that reflect the character of these neighborhoods.

As the short-term rental industry continues to thrive, Chicago's regulatory environment has evolved to support responsible hosting. The city has implemented a straightforward licensing process and clear guidelines for hosts, ensuring a level playing field and fostering a sustainable Airbnb ecosystem.

In 2024, Chicago stands out as a prime location for Airbnb entrepreneurs seeking to tap into a flourishing market. With its strong tourism appeal, growing demand for short-term rentals, and supportive regulatory framework, the Windy City offers an exciting opportunity for hosts to build successful Airbnb businesses.

Chicago Short-Term Rental Market Analysis

Chicago's short-term rental market has shown remarkable resilience and growth in recent years. According to AirDNA, a leading provider of short-term rental data, Chicago's key metrics for 2024 are as follows:

• Occupancy rate: 65%
• Average daily rate (ADR): $152
• Seasonality: Peak season in June

Comparing Airbnb market data from the last two years reveals a positive trend:

1. In 2023, Chicago's occupancy rate was 58%, with an ADR of $237.
2. In 2024, the occupancy rate increased to 65%, while the ADR decreased to $152.

Chicago's Airbnb market has experienced significant growth in recent years. Between May 2022 and May 2023, the number of available listings in Chicago rose by nearly 13%. This growth is attributed to the city's thriving tourism industry and its attractiveness as a destination for short-term rental investments.

Chicago's tourism industry has also shown impressive growth. In the first half of 2023, hotel revenue in Chicago reached $1.12 billion, a 24% increase from the previous year and a 102% increase from pre-pandemic levels in 2019. This record-breaking performance demonstrates the city's strong appeal to visitors.

Several key events and festivals throughout the year contribute to Chicago's booming tourism industry:

1. Lollapalooza (August)
2. Chicago Pride Parade (June)
3. Chicago Blues Festival (June)
4. Chicago Air and Water Show (August)
5. Chicago Marathon (October)

Airbnb host forums and online discussions indicate that the average booking duration in Chicago ranges from 3 to 4 days. However, the city also has a strong mid-term rental market, with 38.6% of listings having a minimum stay requirement of 30+ nights. This trend suggests that there is a significant demand for longer-term stays in Chicago.

In conclusion, Chicago's short-term rental market is thriving, with increasing occupancy rates, a growing number of listings, and a strong tourism industry. The city's diverse array of events and festivals throughout the year, coupled with its attractiveness as a destination for both short and mid-term rentals, make it an appealing choice for Airbnb entrepreneurs in 2024.

Best Neighborhoods in Chicago for an Airbnb Business

When searching for the ideal location to start an Airbnb business in Chicago, hosts should consider factors such as proximity to popular attractions, tourist hotspots, and up-and-coming areas. By analyzing data from reputable sources like AirDNA and Mashvisor, we've identified the top 5 neighborhoods in Chicago for Airbnb entrepreneurs.

1. Lincoln Park

Lincoln Park is a vibrant neighborhood known for its stunning parks, trendy restaurants, and cultural attractions like the Lincoln Park Zoo and the Chicago History Museum. Its proximity to downtown and easy access to public transportation make it a popular choice for tourists.

1. Average Occupancy Rate: 72%
2. Average Daily Rate: $165
3. Airbnb Seasonality: High season from May to September
4. Estimated Annual Revenue: $43,800

According to Zillow, the median home value in Lincoln Park is $525,000 for a single-family house and $350,000 for a condo. A 2-bedroom property provides the best return on investment in this neighborhood.

2. Wicker Park

Wicker Park is a hip, artsy neighborhood known for its unique boutiques, live music venues, and diverse dining options. Its bohemian vibe and proximity to downtown attract a younger, trendier crowd.

1. Average Occupancy Rate: 69%
2. Average Daily Rate: $140
3. Airbnb Seasonality: High season from June to October
4. Estimated Annual Revenue: $35,200

The median home value in Wicker Park is $475,000 for a single-family house and $325,000 for a condo, according to Mashvisor. A 1-bedroom property offers the best return on investment in this area.

3. River North

River North is a luxurious neighborhood known for its high-end restaurants, art galleries, and nightlife. Its prime location just north of the Loop makes it a popular choice for business travelers and tourists alike.

1. Average Occupancy Rate: 75%
2. Average Daily Rate: $180
3. Airbnb Seasonality: High season from April to October
4. Estimated Annual Revenue: $49,275

The median home value in River North is $600,000 for a single-family house and $400,000 for a condo, according to Zillow. A 2-bedroom property provides the best return on investment in this upscale neighborhood.

4. West Loop

The West Loop is a former industrial area that has transformed into a trendy neighborhood known for its innovative restaurants, art galleries, and proximity to downtown. Its unique loft spaces and modern high-rises attract a mix of young professionals and tourists.

1. Average Occupancy Rate: 71%
2. Average Daily Rate: $160
3. Airbnb Seasonality: High season from May to October
4. Estimated Annual Revenue: $41,400

According to Mashvisor, the median home value in the West Loop is $550,000 for a single-family house and $375,000 for a condo. A 1-bedroom property offers the best return on investment in this area.

5. Lakeview

Lakeview is a diverse neighborhood that encompasses several smaller areas, including Wrigleyville, home of the iconic Wrigley Field. Its proximity to the lakefront, vibrant nightlife, and abundance of restaurants and shops make it a popular choice for tourists.

1. Average Occupancy Rate: 68%
2. Average Daily Rate: $130
3. Airbnb Seasonality: High season from April to September
4. Estimated Annual Revenue: $32,200

The median home value in Lakeview is $450,000 for a single-family house and $300,000 for a condo, according to Zillow. A 2-bedroom property provides the best return on investment in this neighborhood.

By considering these top neighborhoods and their respective data, Airbnb entrepreneurs can make informed decisions when starting their short-term rental business in Chicago. It's essential to balance the potential revenue with the initial investment costs to ensure a profitable venture.

Maximizing Your Revenue Through In-Demand Amenities and Properties in Chicago

To set competitive prices for your Chicago Airbnb, consider factors such as location, property type, amenities, seasonality, and market demand. Conducting thorough research on similar listings in your area will give you a better understanding of the optimal price range. Additionally, utilizing dynamic pricing tools can help you automatically adjust your rates based on real-time market trends and demand fluctuations.

Top-performing Airbnb listings in Chicago often share several key amenities that contribute to their success. These include:

1. High-speed internet
2. Self check-in (lockbox or keypad)
3. Air conditioning
4. Fully-equipped kitchen
5. In-unit washer and dryer
6. Dedicated workspace
7. Outdoor space (balcony, patio, or rooftop access)
8. Gym access or fitness equipment
9. Smart home features (smart locks, thermostats, or lighting)
10. Unique decor or architectural features

Incorporating these amenities into your listing can help you stand out from the competition and attract more bookings.

In terms of property types, apartments and condos are the most popular choices for Airbnb rentals in Chicago. According to recent data from Mashvisor, the average property prices and potential revenue for each property type are as follows:

Apartments:

• Studio: $200,000 average price, $1,500 monthly revenue
• 1-bedroom: $250,000 average price, $2,000 monthly revenue
• 2-bedroom: $350,000 average price, $2,800 monthly revenue

Condos:

• Studio: $180,000 average price, $1,400 monthly revenue
• 1-bedroom: $230,000 average price, $1,800 monthly revenue
• 2-bedroom: $320,000 average price, $2,600 monthly revenue

Single-family homes and townhouses also perform well in Chicago's Airbnb market, particularly those with 3 or more bedrooms:

Single-family homes:

• 2-bedroom: $400,000 average price, $3,200 monthly revenue
• 3-bedroom: $500,000 average price, $4,000 monthly revenue
• 4-bedroom: $600,000 average price, $4,800 monthly revenue

Townhouses:

• 2-bedroom: $380,000 average price, $3,000 monthly revenue
• 3-bedroom: $480,000 average price, $3,800 monthly revenue

It's important to note that these figures are averages and can vary depending on the specific location, condition, and amenities of the property. However, they provide a helpful benchmark for understanding the potential revenue and investment opportunities in Chicago's Airbnb market.

Understanding Chicago Short-Term Rental Regulations

Chicago has implemented a comprehensive set of regulations for short-term rental hosts, requiring them to obtain the appropriate licenses and registrations before listing their properties. Hosts must determine whether they need a Bed and Breakfast License for renting out rooms in their primary residence or a Vacation Rental License for renting out an entire unit that is not their primary residence.

To operate legally, hosts must acquire a business license, pass property inspections, secure minimum insurance coverage, and meet zoning requirements. They are also required to display their registration number in all listings and advertisements, install safety equipment, and maintain guest registration records for three years.

Chicago imposes specific taxes on short-term rentals, including the Hotel Accommodations Tax, Shared Housing Surcharge, and Domestic Violence Surcharge, which Airbnb collects and remits on behalf of hosts. The city also enforces strict rules, such as mandatory notification of suspected illegal activity, cleanliness and sanitation standards, and safety requirements.

While Chicago's regulatory environment may be challenging, many hosts have successfully navigated the system and operate profitable short-term rental businesses. To start a short-term rental in Chicago, hosts must determine their property's eligibility, gather required documentation, apply for the appropriate license, comply with all regulations, and list their property on platforms like Airbnb or VRBO.

Read our full STR regulations guide for more detailed information on Chicago short-term rental regulations, including insights from local hosts and a closer look at other policies.

Keys to Success as a Chicago Airbnb Host

To thrive as an Airbnb host in Chicago, it's crucial to understand your target audience's preferences and design your space accordingly. By offering popular amenities and creating an inviting atmosphere that reflects the city's unique character, you can attract more guests and ensure a positive experience.

Popular Amenities and Design Themes:

Chicago Airbnb guests often appreciate accommodations with:

• Modern, stylish interiors that capture the city's vibrant energy
• Industrial elements like exposed brick and concrete, paired with sleek, contemporary furnishings
• High-speed Wi-Fi and smart TVs for entertainment
• Well-equipped kitchens for convenience

Attracting Chicago Customers:

To appeal to potential guests in Chicago, consider the following strategies:

• Highlight your property's unique features and location in your listing description
• Showcase nearby attractions, restaurants, and public transportation options
• Provide local recommendations and insider tips to help guests feel connected to the city
• Offer competitive pricing based on your neighborhood, amenities, and seasonality

Potential Challenges and Guidelines for Success:

Running an Airbnb in Chicago comes with its own set of challenges. To navigate these issues, keep the following tips in mind:

• Obtain necessary licenses and permits, and ensure your property meets all safety and health standards
• Implement a thorough guest screening process, including identity verification and review checks
• Set clear house rules regarding noise levels, occupancy limits, and prohibited activities, and communicate these to guests
• Maintain open communication with guests and promptly address any concerns or issues
• Invest in regular maintenance and updates to keep your property in top condition

As one experienced host shared on a Facebook group for Chicago Airbnb hosts, "Success in this business requires a combination of hospitality, adaptability, and attention to detail. By prioritizing guest satisfaction and being proactive in your approach, you can build a thriving Airbnb business in Chicago."

By focusing on these key areas, understanding the local market dynamics, and learning from the experiences of successful hosts, you can position your Chicago Airbnb listing for success and create a profitable short-term rental business in this dynamic city.

Using BNBCalc to Find Profitable Properties in Chicago, Illinois

BNBCalc is a powerful tool that can help aspiring short-term rental business owners find and analyze profitable properties in Chicago, Illinois. By following these steps, you can leverage BNBCalc to make informed investment decisions and maximize your revenue potential.

1. Analyze Properties Using BNBCalc

To get started, simply enter the address of a potential property into BNBCalc. The tool will provide you with instant revenue projections, as well as a financial summary that includes expenses and financing options. BNBCalc also offers estimated tax deductions and the ability to import links from Zillow or MLS, making it easy to analyze multiple properties quickly.

2. Benchmark Comparable Rentals

One of the most valuable features of BNBCalc is its ability to show you how your property stacks up against other short-term rentals in the area. By analyzing the performance of comparable properties, you can gain insights into pricing strategies, occupancy rates, and amenities that are in demand. Use this information to optimize your listing and fetch top dollar for your rental.

3. Determine the Right Price and Property Size

BNBCalc can help you determine the optimal number of bedrooms, bathrooms, and purchase price to maximize your revenue potential. By inputting different scenarios and comparing the results, you can find the sweet spot that balances your investment costs with your projected income. This feature is particularly useful for investors who are considering renovations or property upgrades.

4. Make an Offer

Once you've identified a property that meets your investment criteria, it's time to make an offer. BNBCalc's partnered STR lender, Brian Bockholdt at Alliant Credit Union, can help you get prequalified for financing at the lowest rates available. Use the insights gained from BNBCalc to negotiate a favorable purchase price based on the property's projected returns.

5. Use Our Tax Calculator

BNBCalc's rental property income tax calculator is the most advanced estimator of your potential deductions. By inputting your projected rental income and expenses, you can determine the tax implications of your investment and take advantage of bonus depreciation opportunities. This feature is especially valuable for investors who are new to short-term rentals and may not be familiar with all the available deductions.

6. Come Up With a Buy Box

Finally, use BNBCalc to develop a buy box and define what makes a property a worthwhile investment for your specific goals and circumstances. By consistently analyzing properties using BNBCalc's tools and features, you'll gain a deep understanding of the Chicago short-term rental market and be able to make confident, data-driven investment decisions.

In conclusion, BNBCalc is an invaluable resource for aspiring short-term rental business owners in Chicago, Illinois. By leveraging its powerful analysis tools, benchmark comparisons, and tax calculators, you can find profitable properties, optimize your listings, and maximize your revenue potential.

Ready to start your Airbnb journey in Chicago? Use BNBCalc to analyze potential properties and make informed investment decisions. Our powerful tool provides comprehensive data to help you maximize your profits. Check out this pre-analyzed Chicago Airbnb opportunity and see how BNBCalc can help you succeed in the short-term rental market. Visit BNBCalc.com today and take the first step towards building your Airbnb business.