REAL ESTATE

9 Surprisingly Hot Markets Where Investors Can Still Find Affordable Short-Term Rental Properties

Now is a great time to be in the vacation rental business. According to short-term rental data and analytics website AirDNA, travelers are spending big on luxury vacation rentals—the more unique, the better. Recent occupancy rates for well-furnished homes increased from 49.1% to 55.9% between 2019 and 2023, with the overall STR market generating a groundbreaking $64 billion in revenue in 2023

While long-term rental landlords might balk at those occupancy rates, it’s worth remembering that vacation rentals often double as medium-term rentals in the off-season, which might not register on vacation rental sites.

The East Coast Is Filled With Investment Hot Spots 

Travel industry news site Skift crunched the numbers with AirDNA data to discover that the beaches on the East Coast, off the Atlantic Ocean, are poised to make a roaring trade during this summer season, with 1.63 million nights booked, up 7.7% over last year.

“New York, which used to be a top 10 market for July 4th, has dropped out and been replaced by the Delaware/Maryland Beaches. This shift continues the trend of growing popularity for Atlantic beaches, led by Myrtle Beach, South Carolina,” said a spokesperson for the short-term rental data provider.

With that in mind, for investors looking to maximize their profits throughout the summer months without spending over $500,000 on a vacation rental, these are the prime places all across the country to own an STR, based on AirDNA, short-term rental and hospitality site Avantstay, and expert real estate agent opinion, factoring in location desirability, potential rental income, property management costs, and long-term appreciation and short-term rental income.

Columbus, Georgia

  • Typical Home Value: $161,000
  • Occupancy: 60%
  • Average Daily Rate: $178
  • Average Revenue: $29,000

With a price point of $161,000 and a location alongside the Chattahoochee River, featuring whitewater rafting, Columbus is a great place to invest, visit, and consider scaling your portfolio. Columbus earned the top spot on AirDNA’s Best Places to Invest 2024.

Oneonta, New York

  • Typical Home Value: $211,000
  • Occupancy: 60%
  • Average Daily Rate: $356
  • Average Revenue: $27,000

There’s not much to argue about with the typical home price of $211,000 and the bumper daily rate of $356. This charming, small city in upstate New York has already landed on AirDNA’s list of hidden gems. The Robert V. Riddell State Park offers more than 2,000 acres of fields and forested woodlands in the Susquehanna River Valley. 

A vacation home in Oneonta also doubles as a winter wonderland retreat, with plenty of fun cold-climate activities nearby.

Fairbanks, Alaska

  • Typical Home Price: $239,000
  • Occupancy: 65%
  • Average Daily Rate: $225
  • Average Revenue: $32,000

Alaska is a great place to visit in the summer, which accounts for short-term rentals’ healthy $32,000/year revenue, mostly crammed into the warmer months. The modest typical home price of $239,000 has increased since Fairbanks became a popular vacation rental town.

Fennville, Michigan

  • Typical Home Value: $309,000
  • Occupancy: 56%
  • Average Daily Rate: $595
  • Average Revenue: $63,000

With a sprawling landscape of orchards, vineyards, and lakefront charm, Fennville’s healthy $63,000 annual revenue for an affordable investment of $309,000 is a great deal. If an investor purchased a home as a personal residence for year one while they fixed the place up and then moved out, they could qualify for an FHA loan and be in the property for under $10,000.

Ashford, Washington

  • Typical Home Value: $323,000
  • Occupancy: $67%
  • Average Daily Rate: $242
  • Average Revenue: $44,000

Affordability and pristine wilderness earmark this popular STR haven, which generates an average annual revenue of $44,000 for an investment of $323,000. Mount Rainier National Park is a big draw. In keeping with the scenic environment, STRs can only operate if there are five or fewer guest rooms and the total number of guests does not exceed 10.

Beaufort, South Carolina

  • Typical Home Value: $347,000
  • Occupancy: 61%
  • Average Daily Rate: $234
  • Average Revenue: $40,000  

Laid-back Southern coastal charm, a quaint historic district, Lowcountry cuisine, and a stunning waterfront park make this a great place to invest at a price that won’t hurt.

Kitty Hawk, North Carolina

  • Typical Home Price: $350,000
  • Occupancy: 64%
  • Average Daily Rate: $434
  • Annual Revenue: $38,800

Although there aren’t many new listings for sale in Kitty Hawk in the Outer Banks, and those that vary dramatically in value, it is possible to nab a good deal shy of $500,000. The metrics make sense, as do the lighthouses, wild horses, and miles of beaches that draw tourists here each year.

Logan, Ohio

  • Average Home Price: $233,000
  • Occupancy: 57%
  • Average Daily Rate: $343
  • Annual Revenue: $57,000

Get away from it all to a rural nirvana in the Hocking Hills region of Logan, Ohio. There are numerous summer activities, including hiking, horseback riding, and zip-lining, with many state parks, rivers, lakes, and caves that draw tourists to the area.

Mount Pocono, Pennsylvania

  • Typical Home Price: $439,000
  • Occupancy: 47%
  • Average Daily Rate: $312
  • Annual Revenue: $45,300

With proximity to Philadelphia, New York, and New Jersey, the Poconos’ lakes, rivers, and woodlands have been a perennial favorite for years, seeing increased demand recently.

Final Thoughts

The advantage of owning a seasonal short-term rental that attracts a robust summer clientele is that, if you buy right, one season can support the entire year—especially on peak holidays like Memorial Day, Independence Day, and Labor Day—allowing you to accommodate mid-term rentals during the winter months.

Summer vacation rentals can be labor-intensive, so be sure to find a good management company and take advantage of tax benefits associated with owning a rental property—deducting all expenses and upkeep, which can be written off as legitimate costs.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.


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