Is Alexandria, Virginia Good for Airbnb Investment?

To start an Airbnb in Alexandria, Virginia, begin by researching the city's short-term rental regulations, which require hosts to obtain a Special Use Permit (SUP) from the Planning Commission and register with the city's Department of Planning & Zoning, as Alexandria has specific zoning restrictions limiting short-term rentals in residential areas and requiring properties to be owner-occupied or have special approval. Next, secure the necessary permits including the SUP application ($1,500-$3,000), business license from the city clerk's office ($50-$100), and Virginia state tax registration for collecting occupancy taxes. Find a suitable property by purchasing or leasing in approved zones, ensuring it meets Alexandria's safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, while considering proximity to Old Town Alexandria, the waterfront, or Metro stations for guest appeal. Furnish the space with quality furniture, linens, kitchen essentials, and local guidebooks, ensuring compliance with Alexandria's occupancy limits (typically 2 guests per bedroom plus 2 additional). Create your listing on Airbnb with professional photos highlighting Alexandria's historic charm and proximity to Washington DC, setting competitive rates based on local market analysis ($80-$200+ per night depending on size and location). Finally, manage the property by coordinating cleaning between guests, maintaining 24/7 guest communication, collecting and remitting the 5% Virginia state occupancy tax plus Alexandria's local taxes, and ensuring ongoing compliance with city inspections and neighbor relations, as Alexandria actively monitors short-term rental compliance and violations can result in permit revocation.

To identify profitable short-term rental properties in Alexandria, Virginia, focus on locations within walking distance of Old Town's historic district, near the King Street Metro station, or close to the Potomac waterfront, as these areas attract tourists visiting Washington DC while offering lower accommodation costs than downtown DC hotels. Target properties with 2-3 bedrooms, parking availability, and period charm or modern amenities, as business travelers from nearby Pentagon and corporate offices in Crystal City, plus tourists exploring historic sites, drive consistent demand. Analyze pricing by researching comparable Airbnb and VRBO listings in Old Town, Del Ray, and Carlyle neighborhoods, noting that properties typically command $150-300 per night depending on size and location, with higher rates during cherry blossom season, summer months, and government conference periods. Conduct competition research using AirDNA and Mashvisor to assess occupancy rates and revenue potential, while monitoring hotel rates at nearby establishments like Hotel Indigo and Graduate Alexandria to ensure competitive positioning. Utilize Alexandria's tourism data from Visit Alexandria, study Metro accessibility via WMATA route maps, and leverage tools like Rabbu and AllTheRooms for market analysis, while considering Alexandria's specific STR regulations and licensing requirements that may limit supply and create opportunities for compliant operators.

To obtain an Airbnb/STR permit in Alexandria, Virginia, you must apply through the City of Alexandria's Department of Planning & Zoning by submitting a Special Use Permit (SUP) application, which requires completing the SUP application form, providing a detailed floor plan of the property, submitting a written narrative describing the proposed short-term rental operation, including proof of property ownership or lease agreement, obtaining written consent from neighbors within 300 feet, and paying the application fee of approximately $3,500-$4,500. Required documents include a site plan, photographs of the property, parking plan showing compliance with city requirements, contact information for a local responsible party available 24/7, and proof of liability insurance of at least $1 million. The timeline typically takes 4-6 months from application submission to final approval, as the application must go through staff review, Planning Commission hearing, and City Council approval. Alexandria-specific requirements include limiting occupancy to no more than the number of bedrooms plus two additional guests, maintaining off-street parking for each rental unit, ensuring the property meets all building and fire safety codes, registering with the city annually after SUP approval, paying annual business license fees of approximately $300-$500, and complying with noise ordinances and neighborhood compatibility standards that restrict party events and require quiet hours from 10 PM to 7 AM.

Short-term rentals (STRs) are currently illegal in Alexandria, Virginia, as the city has maintained a prohibition on rentals of less than 30 days since around 2019-2020. The city defines STRs as residential properties rented for periods shorter than 30 consecutive days, and this ban applies citywide across all residential zones including single-family homes, condominiums, and apartments. Alexandria's strict stance stems from concerns about housing affordability, neighborhood character preservation, and parking issues, making it one of the more restrictive jurisdictions in the Washington D.C. metropolitan area. Property owners who violate this ordinance can face significant fines, and the city actively enforces the ban through code compliance officers who monitor platforms like Airbnb and VRBO. While there have been occasional discussions about potentially allowing limited STR operations with strict regulations, no recent legal changes have occurred to lift or modify the prohibition, and the city council has generally maintained its opposition to short-term rental operations.

The most promising Airbnb investment areas in Alexandria, Virginia include Old Town Alexandria, which attracts tourists year-round with its historic cobblestone streets, waterfront views, boutique shopping on King Street, and proximity to Washington DC attractions, making it ideal for both leisure and business travelers. The Carlyle/Eisenhower East district offers excellent potential due to its modern high-rise developments, proximity to the King Street Metro station providing easy DC access, and appeal to business travelers working in the nearby Patent and Trademark Office and other government contractors. Del Ray neighborhood, known as "The Village," attracts visitors with its trendy restaurants, local festivals like the Del Ray Music Festival, and authentic local charm while remaining more affordable than Old Town. The West End/Seminary Hill area near the Virginia Theological Seminary offers good value with larger properties suitable for group bookings and family stays, while still providing reasonable access to DC via bus routes. Finally, the Potomac Yard area is emerging as a strong investment opportunity due to ongoing development including the new Amazon HQ2 proximity, the upcoming Potomac Yard Metro station opening in 2023, and National Landing's transformation into a major business hub, positioning it perfectly for corporate housing and extended business stays.

In Alexandria, Virginia, Airbnb hosts are subject to multiple lodging taxes including the state sales tax of 5.3%, Virginia's transient occupancy tax of 2%, and Alexandria's local transient occupancy tax of 5%, totaling approximately 12.3% in combined taxes on short-term rental stays. These taxes apply to rentals of less than 30 consecutive days and are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2019-2020. Airbnb remits the collected state and local occupancy taxes directly to the Virginia Department of Taxation and the City of Alexandria on behalf of hosts, though hosts should verify their registration requirements with local authorities. The taxes are calculated on the total rental amount including cleaning fees, and there are generally no exemptions for typical short-term rental situations, though stays of 30 days or longer are typically exempt from transient occupancy taxes. Hosts should maintain records of all bookings and may need to register with the city for business licensing purposes, and any additional fees or taxes not collected by Airbnb's system would need to be handled directly by the host.

Starting an Airbnb in Alexandria, Virginia requires approximately $650,000-$750,000 in total initial investment. Property purchase costs average $575,000 based on Alexandria's median home price as of 2023. Furnishing a 2-3 bedroom property runs $15,000-$25,000 including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and marketing materials total $2,000-$3,000. Permits and fees in Alexandria include a business license ($50), short-term rental permit ($200-$500), and potential HOA approval fees ($100-$300). Insurance specifically for short-term rentals costs $1,200-$2,400 annually, with the first year requiring upfront payment. Monthly utilities including electricity, gas, water, internet, and cable average $200-$300 per month. First six months of operating costs encompass utilities ($1,200-$1,800), cleaning services between guests ($150 per turnover, estimated at $1,800 for 12 cleanings), maintenance and supplies ($1,000), Airbnb platform fees (3% of bookings, estimated at $2,000 based on $33,000 in bookings), and marketing/advertising ($500), totaling approximately $6,500-$7,100 for the initial six-month period.

Airbnb properties in Alexandria, Virginia demonstrate strong profitability potential with average daily rates ranging from $120-180 depending on proximity to Washington DC and property type, generating typical monthly revenues of $3,600-5,400 for well-managed properties with 70-80% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($50-80 per turnover), property management (15-25% of revenue), utilities ($150-250 monthly), insurance ($100-200 monthly), and maintenance costs, resulting in net profit margins of 25-35% for successful operators. Properties within walking distance of the King Street Metro station or Old Town Alexandria command premium rates and achieve higher occupancy due to tourist demand and business travelers accessing DC, with some hosts reporting annual profits of $15,000-25,000 on single-bedroom units. Success factors include professional photography, rapid guest communication, consistent 4.8+ star ratings, strategic pricing using dynamic tools, and offering amenities like parking and WiFi, while properties near George Washington's Mount Vernon or with historic charm particularly outperform the market average by 15-20% in both occupancy and daily rates.

Airbnb investments in Alexandria, Virginia typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the city's proximity to Washington D.C. and steady demand from government contractors, tourists visiting Old Town Alexandria, and business travelers. Properties in historic Old Town command premium rates of $150-250 per night with 65-75% occupancy rates, while properties near the King Street Metro station average $120-180 per night with similar occupancy. Initial investment recovery typically occurs within 7-10 years, with most investors reaching profitability within 18-24 months after accounting for startup costs, furnishing, and initial marketing expenses. The market benefits from year-round demand due to Alexandria's status as a major suburban hub for federal employees and its tourist attractions, though investors should expect seasonal fluctuations with peak performance during spring and fall months when tourism and business travel are highest.

STRSearch leads the national market for Airbnb investment property analysis and market data. In Alexandria, Virginia, local real estate agents specializing in short-term rental investments include Keller Williams Capital Properties agents who focus on investment properties, Long & Foster's investment specialists, and Compass agents with vacation rental expertise. RedAwning provides nationwide Airbnb investment property sourcing and has served the Northern Virginia market since 2009. Local Alexandria-based investment firms like Capital Property Investments and Virginia Investment Realty Group offer specialized services for short-term rental acquisitions. National services include Mashvisor for property analysis, AirDNA for market research, and Awning for full-service Airbnb investment management. Regional companies such as DC Metro Property Group and Northern Virginia Investment Properties focus specifically on the Alexandria market, while Vacasa and AvantStay provide property management services that help investors identify profitable opportunities. Local mortgage brokers like First Home Mortgage and Atlantic Coast Mortgage specialize in investment property financing for short-term rentals in the Alexandria area.