Is Richmond, Virginia Good for Airbnb Investment?

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Richmond, Virginia Airbnb Investment Overview

Is Airbnb a Good Investment in Richmond, Virginia?

Investing in Airbnb properties in Richmond, Virginia, presents a promising opportunity, driven by the city's rich history, growing cultural scene, and burgeoning culinary reputation, which attract a steady stream of tourists and business travelers. Current market conditions in Richmond show a stable real estate market with consistent property value appreciation, making it an attractive location for long-term investment. Tourism trends indicate a continuous increase in visitors exploring historical sites, vibrant neighborhoods like Carytown and Church Hill, and attending various events and festivals, ensuring consistent demand for short-term rentals. This sustained demand, coupled with relatively accessible property values compared to larger metropolitan areas, suggests a solid investment potential for Airbnb operators seeking both rental income and property appreciation in Richmond.

How Much Does an Average Airbnb Earn in Richmond?

Based on available market data, Airbnb hosts in Richmond, Virginia typically earn between $1,200 to $3,500 per month, with entire homes averaging $2,100-$2,800 monthly while private rooms generate $800-$1,500 monthly. Seasonal variations show peak earnings during spring and fall months when tourism increases by approximately 25-35%, particularly during university events and mild weather periods, while winter months typically see 15-20% lower occupancy rates. Key factors affecting earnings include proximity to downtown Richmond and VCU campus (properties within 3 miles command 20-30% higher rates), property type and amenities (homes with parking and full kitchens outperform by 15-25%), and local events such as NASCAR races and festivals which can temporarily boost rates by 40-60%. The average daily rate ranges from $85-$140 depending on location and property features, with occupancy rates typically falling between 60-75% for well-managed properties. Market research from vacation rental analytics platforms and local property management data suggests that professional photography and responsive hosting can increase earnings by 10-20% compared to basic listings.

Airbnb Return on Investment in Richmond

Airbnb investments in Richmond, Virginia typically generate ROI between 8-15% annually, with properties in popular neighborhoods like The Fan, Church Hill, and downtown areas achieving the higher end of this range. The average payback period for initial investment ranges from 6-10 years, depending on property acquisition costs and renovation expenses. Richmond's strong tourism market, driven by its historical significance, VCU student population, and growing food scene, supports average daily rates of $80-120 for well-positioned properties with occupancy rates around 65-75%. Compared to traditional long-term rentals in Richmond, which typically yield 6-9% annually, short-term rentals can provide 2-4 percentage points higher returns, though they require significantly more active management and carry higher operational costs including cleaning, utilities, and platform fees. Properties within 2-3 miles of downtown Richmond or near major attractions tend to perform best, with some investors seeing gross rental yields of 12-18% before expenses, while net returns after all costs typically settle in the 8-12% range for professionally managed properties.

Average Airbnb Occupancy Rate in Richmond

Richmond, Virginia Airbnb properties maintain an average annual occupancy rate of approximately 65-70%, with significant seasonal variations throughout the year. Peak occupancy occurs during spring (March-May) and fall (September-November) when rates climb to 75-85%, driven by favorable weather, university events at VCU and University of Richmond, and the city's vibrant festival season including the Richmond Folk Festival. Summer months see moderate occupancy around 70-75% due to tourism and family travel, while winter experiences the lowest rates at 50-60% from December through February. Richmond's occupancy rates perform slightly above the Virginia state average of 62-67% and closely align with the national Airbnb average of 65-70%, benefiting from its position as the state capital with consistent business travel, a growing food and arts scene, and proximity to historical attractions, though it faces competition from traditional hotels in the downtown corridor and seasonal fluctuations tied to the academic calendar and weather patterns.

Best Neighborhoods for Airbnb in Richmond

The Fan District stands out as Richmond's premier Airbnb investment area due to its Victorian architecture, walkable streets lined with restaurants and bars, proximity to VCU campus ensuring steady demand, and ability to command premium rates from both students and tourists seeking authentic Richmond charm. Scott's Addition has emerged as a top choice with its trendy brewery scene, converted warehouse lofts, and appeal to young professionals and craft beer enthusiasts willing to pay higher nightly rates for modern industrial aesthetics. Church Hill offers historic cobblestone streets, stunning river views, and proximity to St. John's Church where Patrick Henry delivered his famous speech, attracting history buffs and tourists while maintaining relatively affordable property acquisition costs. Carytown provides excellent investment potential with its eclectic shopping district, diverse dining options, and central location that appeals to both leisure travelers and business visitors, supporting consistent occupancy rates. The Museum District attracts culturally-minded guests with its proximity to the Virginia Museum of Fine Arts and Virginia Historical Society, plus beautiful tree-lined streets with stately homes that photograph well for listings. Jackson Ward, known as the "Harlem of the South," offers rich African American history, emerging restaurant scene, and lower entry costs with strong appreciation potential as the area continues gentrifying. Oregon Hill rounds out the list with its bohemian character, proximity to the James River and Belle Isle, and appeal to outdoor enthusiasts and artists seeking unique accommodations at competitive rates.

Short-term Rental Regulations in Richmond

Richmond, Virginia requires short-term rental operators to obtain a business license and register their property with the city, with permits costing approximately $50-100 annually and requiring renewal each year. Properties are limited to a maximum occupancy of two people per bedroom plus two additional guests, with a total cap typically not exceeding 10-12 people depending on the property size. Owner-occupancy requirements vary by zoning district, with some residential areas requiring the owner to live on-site as their primary residence for at least 185 days per year, while others allow non-owner-occupied rentals with additional restrictions. Short-term rentals are generally prohibited in R-1 through R-5 single-family residential zones unless the owner occupies the property, but are permitted in higher-density residential zones, mixed-use areas, and commercial districts with proper licensing. The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and compliance with safety requirements including smoke detectors and fire extinguishers. Recent changes implemented around 2019-2021 have tightened enforcement mechanisms, increased penalties for violations, established clearer noise and parking regulations, and created a complaint system for neighbors, while also implementing a cap on the total number of non-owner-occupied short-term rental permits in certain residential neighborhoods to preserve housing stock and community character.

Short-term Rental Fees and Taxes in Richmond

Short-term rentals in Richmond, Virginia are subject to several fees and taxes including a 7.75% lodging tax (comprised of 5.3% state sales tax and 2.45% local occupancy tax), plus an additional 1% tourism tax for properties with more than 10 rooms. Property owners must obtain a business license costing approximately $50-75 annually and register for a tax account with the Virginia Department of Taxation at no cost. A zoning compliance permit may be required costing around $100-200 depending on the property type and location within Richmond city limits. Additionally, owners must collect and remit the Virginia state sales tax of 5.3% on all rental income, and properties operating as commercial lodging facilities may need a Certificate of Occupancy inspection costing $150-300. Fire safety inspections for multi-unit properties typically cost $75-150 annually, and liability insurance requirements vary but generally increase operational costs by $500-1,500 per year depending on coverage levels and property size.

Is Airbnb a Good Investment in Richmond, Virginia?

Investing in Airbnb properties in Richmond, Virginia, presents a promising opportunity, driven by the city's rich history, growing cultural scene, and burgeoning culinary reputation, which attract a steady stream of tourists and business travelers. Current market conditions in Richmond show a stable real estate market with consistent property value appreciation, making it an attractive location for long-term investment. Tourism trends indicate a continuous increase in visitors exploring historical sites, vibrant neighborhoods like Carytown and Church Hill, and attending various events and festivals, ensuring consistent demand for short-term rentals. This sustained demand, coupled with relatively accessible property values compared to larger metropolitan areas, suggests a solid investment potential for Airbnb operators seeking both rental income and property appreciation in Richmond.

How Much Does an Average Airbnb Earn in Richmond?

Based on available market data, Airbnb hosts in Richmond, Virginia typically earn between $1,200 to $3,500 per month, with entire homes averaging $2,100-$2,800 monthly while private rooms generate $800-$1,500 monthly. Seasonal variations show peak earnings during spring and fall months when tourism increases by approximately 25-35%, particularly during university events and mild weather periods, while winter months typically see 15-20% lower occupancy rates. Key factors affecting earnings include proximity to downtown Richmond and VCU campus (properties within 3 miles command 20-30% higher rates), property type and amenities (homes with parking and full kitchens outperform by 15-25%), and local events such as NASCAR races and festivals which can temporarily boost rates by 40-60%. The average daily rate ranges from $85-$140 depending on location and property features, with occupancy rates typically falling between 60-75% for well-managed properties. Market research from vacation rental analytics platforms and local property management data suggests that professional photography and responsive hosting can increase earnings by 10-20% compared to basic listings.

Airbnb Return on Investment in Richmond

Airbnb investments in Richmond, Virginia typically generate ROI between 8-15% annually, with properties in popular neighborhoods like The Fan, Church Hill, and downtown areas achieving the higher end of this range. The average payback period for initial investment ranges from 6-10 years, depending on property acquisition costs and renovation expenses. Richmond's strong tourism market, driven by its historical significance, VCU student population, and growing food scene, supports average daily rates of $80-120 for well-positioned properties with occupancy rates around 65-75%. Compared to traditional long-term rentals in Richmond, which typically yield 6-9% annually, short-term rentals can provide 2-4 percentage points higher returns, though they require significantly more active management and carry higher operational costs including cleaning, utilities, and platform fees. Properties within 2-3 miles of downtown Richmond or near major attractions tend to perform best, with some investors seeing gross rental yields of 12-18% before expenses, while net returns after all costs typically settle in the 8-12% range for professionally managed properties.

Average Airbnb Occupancy Rate in Richmond

Richmond, Virginia Airbnb properties maintain an average annual occupancy rate of approximately 65-70%, with significant seasonal variations throughout the year. Peak occupancy occurs during spring (March-May) and fall (September-November) when rates climb to 75-85%, driven by favorable weather, university events at VCU and University of Richmond, and the city's vibrant festival season including the Richmond Folk Festival. Summer months see moderate occupancy around 70-75% due to tourism and family travel, while winter experiences the lowest rates at 50-60% from December through February. Richmond's occupancy rates perform slightly above the Virginia state average of 62-67% and closely align with the national Airbnb average of 65-70%, benefiting from its position as the state capital with consistent business travel, a growing food and arts scene, and proximity to historical attractions, though it faces competition from traditional hotels in the downtown corridor and seasonal fluctuations tied to the academic calendar and weather patterns.

Best Neighborhoods for Airbnb in Richmond

The Fan District stands out as Richmond's premier Airbnb investment area due to its Victorian architecture, walkable streets lined with restaurants and bars, proximity to VCU campus ensuring steady demand, and ability to command premium rates from both students and tourists seeking authentic Richmond charm. Scott's Addition has emerged as a top choice with its trendy brewery scene, converted warehouse lofts, and appeal to young professionals and craft beer enthusiasts willing to pay higher nightly rates for modern industrial aesthetics. Church Hill offers historic cobblestone streets, stunning river views, and proximity to St. John's Church where Patrick Henry delivered his famous speech, attracting history buffs and tourists while maintaining relatively affordable property acquisition costs. Carytown provides excellent investment potential with its eclectic shopping district, diverse dining options, and central location that appeals to both leisure travelers and business visitors, supporting consistent occupancy rates. The Museum District attracts culturally-minded guests with its proximity to the Virginia Museum of Fine Arts and Virginia Historical Society, plus beautiful tree-lined streets with stately homes that photograph well for listings. Jackson Ward, known as the "Harlem of the South," offers rich African American history, emerging restaurant scene, and lower entry costs with strong appreciation potential as the area continues gentrifying. Oregon Hill rounds out the list with its bohemian character, proximity to the James River and Belle Isle, and appeal to outdoor enthusiasts and artists seeking unique accommodations at competitive rates.

Short-term Rental Regulations in Richmond

Richmond, Virginia requires short-term rental operators to obtain a business license and register their property with the city, with permits costing approximately $50-100 annually and requiring renewal each year. Properties are limited to a maximum occupancy of two people per bedroom plus two additional guests, with a total cap typically not exceeding 10-12 people depending on the property size. Owner-occupancy requirements vary by zoning district, with some residential areas requiring the owner to live on-site as their primary residence for at least 185 days per year, while others allow non-owner-occupied rentals with additional restrictions. Short-term rentals are generally prohibited in R-1 through R-5 single-family residential zones unless the owner occupies the property, but are permitted in higher-density residential zones, mixed-use areas, and commercial districts with proper licensing. The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and compliance with safety requirements including smoke detectors and fire extinguishers. Recent changes implemented around 2019-2021 have tightened enforcement mechanisms, increased penalties for violations, established clearer noise and parking regulations, and created a complaint system for neighbors, while also implementing a cap on the total number of non-owner-occupied short-term rental permits in certain residential neighborhoods to preserve housing stock and community character.

Short-term Rental Fees and Taxes in Richmond

Short-term rentals in Richmond, Virginia are subject to several fees and taxes including a 7.75% lodging tax (comprised of 5.3% state sales tax and 2.45% local occupancy tax), plus an additional 1% tourism tax for properties with more than 10 rooms. Property owners must obtain a business license costing approximately $50-75 annually and register for a tax account with the Virginia Department of Taxation at no cost. A zoning compliance permit may be required costing around $100-200 depending on the property type and location within Richmond city limits. Additionally, owners must collect and remit the Virginia state sales tax of 5.3% on all rental income, and properties operating as commercial lodging facilities may need a Certificate of Occupancy inspection costing $150-300. Fire safety inspections for multi-unit properties typically cost $75-150 annually, and liability insurance requirements vary but generally increase operational costs by $500-1,500 per year depending on coverage levels and property size.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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How to start an Airbnb in Richmond, Virginia?

To start an Airbnb in Richmond, Virginia, begin by researching local zoning laws and regulations through the City of Richmond's Planning and Development Review department, as Richmond requires short-term rental operators to obtain a business license and comply with zoning ordinances that may restrict rentals in certain residential areas. Contact the Richmond Department of Finance to apply for a business license (approximately $50-100 annually) and ensure your property meets fire safety codes by scheduling an inspection with Richmond Fire and Emergency Services. Find a suitable property in neighborhoods like The Fan, Church Hill, or Scott's Addition that are zoned for short-term rentals, considering factors like proximity to VCU, downtown attractions, and parking availability. Purchase essential furnishings including quality bedding, basic kitchen supplies, WiFi equipment, and safety items like smoke detectors and fire extinguishers, budgeting approximately $3,000-8,000 for a complete setup. Create compelling listings on Airbnb, VRBO, and other platforms with professional photos highlighting Richmond's historic charm and nearby attractions like the Virginia Museum of Fine Arts or Belle Isle. Implement a management system using tools like automated messaging, keyless entry systems, and cleaning services, while maintaining compliance with Virginia's 5.3% state sales tax and Richmond's 7.5% local occupancy tax that must be collected from guests and remitted monthly to the Virginia Department of Taxation and Richmond's Department of Finance respectively.

What's the best way to identify good STR properties in Richmond, Virginia?

To identify profitable short-term rental properties in Richmond, Virginia, focus on location criteria including proximity to VCU campus, downtown business district, historic Fan District, Museum District, and near major attractions like the Virginia Museum of Fine Arts and Hollywood Cemetery. Target properties with 2-4 bedrooms, parking availability, unique architectural features common to Richmond's historic neighborhoods, and outdoor spaces that appeal to visitors exploring the city's craft beer scene and outdoor recreation along the James River. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ranging from $80-200 depending on location and size, with higher rates achievable near VCU during academic events and downtown during business travel periods. Research competition by analyzing existing STR listings in Fan District, Church Hill, and Scott's Addition neighborhoods, noting occupancy rates typically peak during spring/fall months and VCU events. Utilize tools like Rabbu, BiggerPockets calculators, and local Richmond MLS data through Virginia Regional MLS, while consulting Richmond's zoning regulations since the city requires STR permits and has specific restrictions in certain residential districts. Partner with local property management companies familiar with Richmond's market dynamics and consider properties near the James River for outdoor enthusiasts and downtown for business travelers targeting the growing biotech and finance sectors.

How to get an Airbnb permit in Richmond, Virginia?

To obtain an Airbnb/STR permit in Richmond, Virginia, you must first register your property with the City of Richmond's Department of Planning and Development Review by submitting an application for a Short-Term Rental Registration Certificate. Required documents include a completed application form, proof of property ownership or lease agreement with landlord consent, a floor plan of the rental unit, proof of liability insurance (minimum $1 million), contact information for a local responsible party available 24/7, and payment of the registration fee (approximately $200-300 annually). You must also obtain a business license from the City Clerk's office (around $50-75) and ensure your property complies with zoning requirements, fire safety codes, and occupancy limits. The property must pass a safety inspection conducted by the city, which includes checking smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency exit routes. Submit all materials to the Department of Planning and Development Review at City Hall (900 E Broad Street) or online through the city's permitting portal. The entire process typically takes 4-6 weeks from application submission to permit approval, assuming no complications arise during the inspection phase. Richmond requires STR operators to collect and remit local occupancy taxes, maintain guest registries, and renew their registration annually while adhering to noise ordinances and parking restrictions specific to their zoning district.

Is it legal to operate a short-term rental in Richmond, Virginia?

Short-term rentals (STRs) are legal in Richmond, Virginia, but operate under specific regulations implemented in 2019. The city requires STR operators to obtain a business license and special use permit, with properties limited to a maximum of two bedrooms for rental. STRs are prohibited in certain zoning districts including R-1 through R-4 residential areas, though they are permitted in mixed-use and commercial zones, as well as some higher-density residential districts. The city caps the total number of STR permits and requires operators to maintain liability insurance, provide emergency contact information, and ensure properties meet safety standards. Recent changes in 2021-2022 included stricter enforcement mechanisms and increased penalties for violations, while the city continues to monitor the impact on housing availability and neighborhood character, with periodic reviews of the ordinance to balance tourism benefits with residential community concerns.

What are the best places to invest in Airbnb in Richmond, Virginia?

The best Airbnb investment areas in Richmond, Virginia include the Fan District, which attracts tourists with its Victorian architecture, trendy restaurants, and proximity to Virginia Commonwealth University, generating consistent demand from visiting families and business travelers. Shockoe Bottom offers strong potential due to its historic cobblestone streets, nightlife scene, and location near the James River, appealing to weekend tourists and event attendees. The Museum District provides excellent investment opportunities with its proximity to the Virginia Museum of Fine Arts, Virginia Historical Society, and upscale dining, attracting cultural tourists and business professionals. Church Hill, Richmond's oldest neighborhood, draws visitors interested in historic sites like St. John's Church and offers stunning city views, making it popular with history enthusiasts and photographers. Scott's Addition has emerged as a prime area due to its craft brewery scene, art galleries, and converted warehouse spaces, appealing to younger travelers and groups seeking unique experiences. Downtown Richmond near the Convention Center and financial district provides consistent business travel demand, especially during conferences and corporate events, while also serving leisure travelers visiting the State Capitol and American Civil War Museum.

Airbnb and lodging taxes in Richmond, Virginia

In Richmond, Virginia, Airbnb hosts are subject to both state and local lodging taxes that must be collected from guests and remitted to tax authorities. The Virginia state transient occupancy tax is 5.3% and applies to all short-term rental stays under 90 consecutive days, while the City of Richmond imposes an additional local lodging tax of 8%, bringing the total occupancy tax rate to 13.3% on gross rental receipts. Virginia also requires collection of the 5.3% state sales tax on short-term rentals, making the combined tax burden approximately 18.6%. Hosts must register with the Virginia Department of Taxation and obtain a Certificate of Registration to collect these taxes, with monthly remittance required by the 20th of the following month using Form ST-9. The City of Richmond requires separate registration and monthly filing of local occupancy taxes through their Department of Finance, typically due by the 20th of each month following the collection period. Airbnb may collect and remit some of these taxes on behalf of hosts through their platform in certain jurisdictions, but hosts remain ultimately responsible for compliance and should verify collection status. Exemptions generally apply to stays exceeding 90 consecutive days, which are considered long-term rentals rather than transient accommodations, and certain government or charitable organization bookings may qualify for exemptions with proper documentation.

Total cost to purchase, furnish and operate an Airbnb in Richmond, Virginia

The total cost to start an Airbnb in Richmond, Virginia is approximately $285,000-$320,000. Property purchase represents the largest expense at $250,000-$280,000 based on median home prices in desirable Richmond neighborhoods like The Fan, Church Hill, or Scott's Addition. Furnishing costs range from $15,000-$20,000 to create an attractive, fully-equipped rental including furniture, appliances, linens, kitchenware, and décor. Initial setup costs add $2,000-$3,000 for professional photography, listing creation, smart locks, security systems, and cleaning supplies. Permits and fees total approximately $500-$1,000 including business license, short-term rental permit, and potential HOA approvals. Insurance costs $1,200-$2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services, maintenance, property management software, and marketing total $3,000-$5,000. Additional considerations include potential renovation costs of $5,000-$15,000 depending on property condition and desired amenities to compete effectively in Richmond's growing short-term rental market.

Are Airbnb properties in Richmond, Virginia profitable?

Airbnb properties in Richmond, Virginia typically generate average nightly rates of $85-$120 depending on location and property type, with downtown and Fan District properties commanding premium rates around $110-$150 per night. Annual gross revenues for well-managed properties range from $25,000-$45,000, while operating expenses including cleaning fees ($30-$50 per turnover), utilities ($150-$250 monthly), insurance ($1,200-$2,000 annually), property management (20-30% of revenue), and maintenance typically consume 40-60% of gross income. Net profit margins generally fall between 15-35% for successful operators, with properties near VCU, downtown business district, and historic neighborhoods like Church Hill performing strongest due to consistent demand from business travelers, university visitors, and tourists. Success factors include strategic location within 3 miles of downtown, professional photography, dynamic pricing strategies, maintaining 4.8+ star ratings, and offering amenities like parking and fast WiFi. Properties in suburban areas like Short Pump or Mechanicsville typically underperform with occupancy rates below 50%, while urban properties achieve 65-80% occupancy during peak seasons, with companies like RedAwning and Vacasa reporting that Richmond hosts earn approximately $2,100-$3,200 monthly during strong periods but face seasonal fluctuations with winter months dropping 30-40% below summer performance.

What is the expected return on investment for an Airbnb in Richmond, Virginia?

Airbnb investments in Richmond, Virginia typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property location and management efficiency. Properties in popular neighborhoods like The Fan, Scott's Addition, and Church Hill command higher nightly rates of $80-150, while suburban areas average $60-100 per night. Initial profitability usually occurs within 12-18 months for well-positioned properties, with investors seeing positive cash flow after accounting for mortgage payments, property management fees (typically 15-25%), maintenance, and Richmond's 8% occupancy tax. The market benefits from Virginia Commonwealth University demand, downtown business travelers, and tourism to historic sites, with average occupancy rates of 65-75% annually. Properties purchased in 2020-2022 for $200,000-400,000 in desirable areas have shown appreciation of 5-8% annually while generating rental income, though recent interest rate increases and increased competition from new Airbnb hosts have compressed margins compared to peak pandemic performance in 2021-2022.

What company can help me find and buy a profitable Airbnb in Richmond, Virginia?

STRSearch leads the market in Airbnb investment property analysis nationwide including Richmond, Virginia. Local Richmond real estate agents specializing in short-term rental investments include Joyner Fine Properties, Long & Foster Real Estate, and RE/MAX Commonwealth agents who focus on investment properties in areas like The Fan, Scott's Addition, and Church Hill. National services operating in Richmond include Awning (property management and acquisition), RedAwning (vacation rental investment platform), Mashvisor (real estate analytics), AirDNA (market data), and Roofstock (turnkey rental properties). Richmond-specific investment firms like Virginia Investment Properties and River City Real Estate Investors provide local market expertise. Additional services include STR Helper for property management setup, HostGPO for bulk purchasing, and Vacasa for full-service management of newly acquired properties. These companies typically focus on Richmond's popular neighborhoods like Carytown, VCU area, and downtown districts where tourism and business travel create strong Airbnb demand, with average daily rates ranging from $85-150 depending on location and property type as of 2023-2024.

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