As the world of vacation rentals continues to evolve and expand, investors and property owners are constantly seeking the most lucrative and promising markets for their investments. The recent report by AirDNA offers an insightful analysis of the best places to invest in short-term rentals in 2024. This comprehensive study delves into various factors such as rental demand, revenue growth, investability, and regulatory considerations, providing a valuable resource for anyone looking to capitalize on the booming vacation rental market.
However, identifying the right investment opportunity is just the first step. For those ready to take action and make their investment dreams a reality, IdealLocationHomes.com offers a unique and specialized service. Specializing in long-term financing for short-term vacation rental homes, Ideal Location Homes provides smart underwriting based on projected daily rental rates and occupancy, offering solutions tailored to the needs of business owners, self-employed borrowers, and foreign nationals.
The AirDNA report highlights the optimistic outlook for short-term rental (STR) investments in 2024, with expected growth in revenue per available room (RevPAR) and a stabilizing STR market. The analysis identifies the 25 best vacation rental markets, focusing on areas with unique qualities like coastal access, historical significance, and vibrant local arts and outdoor scenes.
Key aspects covered in the article include:
- Rental Demand: Evaluating the occupancy rate and booked listing growth rates to gauge how often rentals are booked throughout the year.
- Revenue Growth: Analyzing changes in revenue per available rental over the past two years.
- Investability: Assessing profitability in relation to purchase cost, considering average potential rental income, operating costs, and home values.
- Regulation: Considering current and potential future regulatory risks for STR investors.
The article serves as a guide for investors, offering insights into the most promising markets for STR investments in 2024.
2024 will likely be a breath of fresh air for short-term rental (STR) hosts and investors discouraged by the tough year 2023 turned out to be.
As we predicted, RevPAR (revenue per available room) died down in 2023 following the highs of 2021 and 2022. The year closed out with an average drop of 6.7%. According to AirDNA’s latest Outlook Report, though, declines should ease and RevPAR should grow slightly in 2024. This gives Airbnb hopefuls reason to consider entering (or re-entering) the best short-term rental markets.
Investing in the best STR markets might not be all smooth sailing, however. While investors and experts alike widely expected home values to cool off in 2023, that optimism was short-lived. Redfin reported that home values increased by 3% throughout the year. Forecasts for 2024 call for home prices to remain relatively stable, though local markets with supply and demand imbalances may be more unpredictable.
On the brighter side, the Federal Reserve Board (Fed) is likely done raising rates, and we now expect rates to start declining in 2024. This should be a welcome change after the U.S. experienced the highest interest rates in decades. With rates falling, the broad consensus is that home sales will rise in 2024. As properties become more affordable, both sellers and buyers will re-enter the housing market.
“RevPAR should grow in 2024, giving Airbnb hopefuls reason to consider entering the best short-term rental markets”
According to Oxford Economics’ latest forecast, home values will peak in Q3 2023 and reach their next low point in Q2 2024 before continuing to grow once again. Oxford predicts that home values will fall by roughly 3% over the next year, compared to Redfin’s forecast of a 1% decrease.
Over the next year, Oxford expects home values to decline the most in markets like Phoenix, Arizona (-8%), Naples, Florida (-9%), and Anaheim, California (-9%). We can expect a 5% increase in home value in Huntsville, Alabama; Winston-Salem, North Carolina; and Myrtle Beach, South Carolina.
Methodology for AirDNA’s Best Places to Invest 2024
We created an updated index of the best places to invest in 2024 using AirDNA’s property-level performance data for Airbnb and Vrbo. This methodology allows us to find high-performing, growing short-term rental markets that provide returns for investors. For this analysis, we limited data to entire-home, single-family home rentals.
The components of our Investor Score include:
Rental Demand
Revenue Growth
Investability
Regulation
Best Short-Term Rental Markets in 2024
1. Columbus, Georgia
Columbus, Georgia, shines as a beacon for vacation rental investors, boasting an impressive AirDNA Score of 90.2. This is underpinned by its affordable typical home value of $160,600, which pairs attractively with a strong 5% growth in RevPAR. Nestled on the banks of the Chattahoochee River, this charming city is not just a hub for Civil War and military history but also a playground for outdoor enthusiasts. Columbus features the world’s longest urban whitewater course. The city’s allure is matched by a robust rental demand, showcased by its occupancy rate of 59.5%. Columbus offers investors a unique combination of high investability, steady revenue growth, and a vibrant, diverse visitor appeal, earning it the top spot on AirDNA’s Best Places to Invest 2024.
Important Note: The city requires short-term rental businesses to obtain a permit and certificate of occupancy.
2. Ellsworth, Maine
Ellsworth, Maine was on our 2023 Best Places to Invest list and has ascended in ranking from number 8 to number 2, with a renewed AirDNA Score of 89.1. What truly sets Ellsworth apart is its proximity to Acadia National Park. The park is a natural wonder where visitors can explore rugged coastlines, hike scenic trails, and bask in the beauty of Cadillac Mountain, the first place in the U.S. to see the sunrise. A robust occupancy rate of 72.8% complements its picturesque setting and quaint, historic downtown. While the initial investment is steep at $324,670, this is offset by a $244 RevPAR. With its picturesque New England charm and outdoor adventure, Ellsworth captivates visitors and also signifies a flourishing market for vacation rentals.
3. Logan, Ohio
Logan, Ohio, emerges as a top contender on our Best Places to Invest list. It earns its prestigious place by being one of only two locations to earn a perfect 100 Investability score. Nestled in the heart of the Hocking Hills region, Logan and the surrounding area earned its unique name from the Native American word “hockhocking,” which means “bottle-shaped” or “twisted.” Visitors come to the area for the winding, rugged valleys that give the area its name, in addition to the town’s vibrant arts and outdoor scenes. These attractions push occupancy to 57.3%. While it may not have the highest occupancy or RevPAR growth rates, Logan makes a compelling case for investors with an impressive Gross Yield (the return on investment before deducting expenses) of 18.6%, second only to Stanton, Kentucky (number seven).
Important Note: Check a potential property’s district before you buy it. Short-term rentals are disallowed in R-1 zoning districts and allowed—with some restrictions—in R-2, R-2-B, Business-1/ B-2, and Manufacturing 1/ M-1 districts. In R-3, the multifamily district, STRs are permitted under a conditional use standard. In R-2 and R-2-B only, the number of guests in a unit is limited to 10, and only 60 total units are allowed to operate. STR applications carry a $50 application fee and a $500 annual license fee.
4. Spring Hill, Florida
Boasting an impressive Rental Demand of 86.1, Spring Hill, Florida, is an up-and-coming destination for investors interested in the Sunshine State. Situated along Florida’s Nature Coast, Spring Hill is flush with natural wonders tourists love, from the lush Chassahowitzka Wildlife Management Area to the enchanting Weeki Wachee Springs State Park. The city’s rental demand, reflected in a 61.7% occupancy rate, showcases its appeal as a year-round destination. Whether you’re seeking financial growth or a slice of Florida paradise, Spring Hill delivers on both fronts.
5. Sneads Ferry, North Carolina
While Sneads Ferry, North Carolina’s typical home value of $555,130 may seem on the higher side relative to other cities on this list, this coastal gem justifies the investment cost with a remarkable RevPAR of $290. Moreover, the RevPAR grew at a rate of 3.3% in the last year. This growth indicates that the higher investment is not only justified but may offer continued profitability, though there is no guarantee of future financial growth. Nestled along the shores of the Atlantic Ocean, Sneads Ferry draws visitors with its proximity to North Topsail Beach and its miles of unspoiled coastline. This charming town is the ideal travel destination for guests seeking a coastal retreat and aspiring Airbnb hosts looking to invest in the best STR markets.
6. Winter Haven, Florida
Aptly named, Winter Haven is a warm and welcoming location for vacation rental investors. With a typical home value of $263,811, Winter Haven‘s real estate market is notably more accessible compared to the statewide average home value of $389,000. This affordability makes it an attractive choice for those looking to invest in year-round sunshine without breaking the bank. Nestled in the heart of Central Florida, Winter Haven remains a tourist magnet thanks to family-friendly attractions like LEGOLAND Florida Resort and the city’s quaint downtown and picturesque chain of lakes. Winter Haven seamlessly blends investment potential with the charm of Central Florida living.
7. Stanton, Kentucky
Stanton, Kentucky, emerges as an opportune investment hub for short-term rentals with a typical home value of $146,470 and a location attractive to tourists. Positioned near the scenic Red River Gorge Geological Area and Natural Bridge State Resort Park, Stanton calls out to nature enthusiasts. STRs in the area benefit from a 55.5% occupancy rate resulting from the demand for outdoor recreation. With a soaring Investability score of 100 (the only city other than Logan to earn it) and an AirDNA Score of 86, Stanton proves its potential as a vacation rental investment.
8. Port Angeles, Washington
Port Angeles, Washington, is a practical entry into real estate with an affordable typical home value of $390,480. Investors can appreciate its strategic location, close to the Port Angeles Fine Arts Center and the stunning Olympic National Park. The park is home to stunning mountain peaks and four vibrant temperate rainforests. Port Angeles’s steady occupancy rate of 64.3% speaks to its popularity among outdoor enthusiasts and its reliability in the short-term rental market, making it an attractive starting point for short-term rental ventures.
Important Note: Currently, STRs are allowed in the Residential Medium Density (RMD) zone and Residential High Density (RHD) zone. They’re also allowed in all of the City’s Commercial zones except the Commercial Office (CO) zone, where STRs require a conditional use permit. As of January 2024, though, the city has proposed a new regulation that will cap the number of full-time short-term rentals in residential zoning districts.
9. Akron, Ohio
With an inviting typical home value of $145,320, Akron is an aspiring investor-friendly real estate market. Akron is something of a two-for-one, inviting hosts to double-dip in demand for the city itself and for neighboring Cleveland. The city also has ample attractions of its own, including the Akron Art Museum and the historic Stan Hywet Hall & Gardens. The museum and gardens help attract nearly 20 million visitors to the area every year. Boasting an AirDNA Score of 84.7, Akron stands out as a practical choice for investors. The city offers a favorable blend of affordability, growth potential, and a dynamic short-term rental scene.
Important Note: The city requires short-term rental businesses to register according to the city’s rental registry requirements.
10. Fairbanks, Alaska
In Fairbanks, Alaska, the magical Northern Lights set the stage for a promising investment opportunity. After topping AirDNA’s Best Places to Invest 2023, Fairbanks‘s typical home value increased to $238,670. Yet, the stable 64.8% occupancy rate still makes this a lucrative market for investors prepared for the boom of a solid summer season paired with a much quieter winter. Beyond its economic appeal, Fairbanks draws visitors with a blend of natural wonders and cultural attractions unique to its location within the Arctic Circle. As a complete package, Fairbanks earns the town an AirDNA score of 81.4 and a spot on our list of best short-term rental markets for the second year in a row.
11. Mineral, Virginia
Located in the heart of Virginia, Mineral is a destination packed with natural beauty. It’s no wonder why typical home values in the area reach $699,270. Visitors are drawn to the area’s rich history, outdoor features, and recreation in conjunction with sparkling Lake Anna. The diversity of tourist activities drive up occupancy rates to 57.6%, helping to offset Mineral’s above-average home value compared to other locations on our list. With charming local attractions and a RevPAR of $301, Mineral proves to be a promising hub for those seeking a strong balance of cost and potential value.
12. Fernandina Beach, Florida
In picturesque Fernandina Beach, Florida, historic charm meets coastal allure. This quaint town on peaceful Amelia Island is a stand-out for investors. It has a reasonable typical home value of $589,780, pristine beaches, and well-preserved Victorian architecture. The occupancy rate of 61.5% signifies a steady influx of visitors eager to explore the area’s rich Spanish heritage and its sun-kissed shores. Fernandina Beach‘s enchanting island atmosphere, coupled with a solid RevPAR of $270, makes it an attractive investment for those seeking properties that balance relaxation and cultural exploration.
Important Note: Listings must obtain a Resort Rental Dwelling Permit (RRDP), which is only available in R-3 zoning districts. Only STRs that have been grandfathered in (i.e. operating before the regulations) can operate in R-1 and/or R-2 zones.
13. Anaheim, California
In sunny Anaheim, California, the iconic Disneyland Resort draws visitors with its renowned energy and entertainment. Anaheim’s gateway to theme parks and captivating attractions drives up the typical home value to $867,720—one of the highest on our list. That price is balanced by a robust occupancy rate of 76.5%, ensuring that a steady stream of tourists seeking the thrill of Disneyland will drive up returns. Anaheim’s attractive AirDNA Score of 80.6 only underscores its appeal as both a tourist destination and a promising spot for savvy vacation rental investments.
Important Note: In Anaheim, only listings with business licenses are permitted to host stays of 30 nights or less. To obtain that license, you’ll have to pay a $250 application fee to the city.
14. Beaufort, South Carolina
Beaufort, South Carolina, offers a unique blend of history and coastal charm, drawing in travelers seeking a laid-back escape. With a typical home value of $346,580, this city offers an attractive investment opportunity. Visitors explore the historic district’s antebellum architecture, stroll along the picturesque waterfront park, and indulge in Lowcountry cuisine. This itinerary drives a 60.9% occupancy rate and $143 RevPAR reflective of consistent demand. Beaufort‘s natural beauty, historic sites like The Arsenal and Old Sheldon Church ruins, and vibrant cultural scene make it one of the best short-term rental locations for investors drawn to the city’s rich Southern hospitality and distinctive character.
Important Note: In residential-zoned districts, STRs must obtain a special use permit. STRs are permitted in commercial districts with a short-term rental permit, business license, and certificate of occupancy.
15. North Myrtle Beach, South Carolina
North Myrtle Beach, South Carolina, is known for its sun-soaked shores and family-friendly atmosphere. With a competitive typical home value of $594,920, this city is an inviting destination for real estate investment. Vacationers flock to its wide sandy beaches and numerous golf courses for a laid-back escape packed with fresh, local seafood and lively entertainment. Though North Myrtle Beach home values are higher than its South Carolina companion on our list (Beaufort, number 14), the robust occupancy rate of 60.7% and RevPAR of $302 make it a desirable spot in its own right. Investors interested in seaside towns will find a promising opportunity in North Myrtle Beach’s combination of charm and investment potential.
16. Fennville, Michigan
Fennville’s rural charm attracts visitors seeking a tranquil getaway. Celebrated for its orchards and vineyards, hosts located in this hidden gem can offer guests a taste of idyllic countryside living without emptying their bank account. That is thanks to the area’s affordable typical home value of $309,420. Though Fennville is still an accessible entry point to the vacation rental market, its strong 56.2% occupancy rate and $334 RevPAR (one of the highest on our list) also shows promise for reliable returns. Fennville embodies the essence of Michigan’s countryside, offering a peaceful retreat for travelers and a stable investment for hosts.
17. Helen, Georgia
Helen, Georgia, is back on our list after making appearances in 2021 and 2022 but not quite making the grade for the AirDNA Best Places to Invest 2023. Its charming Bavarian architecture and lively cultural scene make this town a jewel of the Blue Ridge Mountains. With an affordable typical home value of $371,580 and growing demand, Helen remains a magnet for investors. Travelers come from near and far to experience the vibrant Oktoberfest celebrations, stroll along the scenic Chattahoochee River, and traverse the lush mountain trails, driving occupancy to a solid 56.7%. With a robust RevPAR of $194, Helen offers cultural immersion as well as an enticing investment prospect.
Important Note: STRs must obtain a business license and a short-term rental permit from the city.
18. North Las Vegas, Nevada
North Las Vegas—Sin City’s slightly more tame neighbor—offers plenty of short-term rental investment opportunities. The typical home value is just $384,970, yet occupancy rates hit 60.6% as travelers flock to the area for the Las Vegas Motor Speedway and the famed Las Vegas Strip. Despite a minor RevPAR decline of -4.7%, North Las Vegas’s solid $191 RevPAR reflects the stability of the area’s STR investments. Boasting an impressive Investability score of 91.2, this city stands out as a prime location for investors seeking a flourishing market with built-in demand.
Important Note: STR owners must obtain a conditional use permit and business license to operate. Properties must prove that they’ve installed noise monitoring equipment.
19. Wisconsin Dells, Wisconsin
Wisconsin Dells, Wisconsin, is a growing travel destination due to its picturesque landscapes and welcoming community. While its rental demand score of 28.3 out of 100 isn’t the highest on our list, growing revenue and an affordable typical home value of $240,520 make this city a diamond in the rough. The Dells’ natural landscape ensures a steady flow of visitors and a strong occupancy rate of 55.2%. Beloved for the Noah’s Ark waterpark and scenic boat rides on the Wisconsin River, Wisconsin Dells promises a lucrative investment built upon the area’s delightful blend of family-friendly attractions and Midwestern hospitality.
20. Oneonta, New York
Nestled in upstate New York, Oneonta promises a captivating blend of affordability and charm. Its $210,620 average home value already landed it on our list of hidden gems, but its strong occupancy rate and RevPAR are what earned it a spot on our Best Places to Invest 2024 list. Onenonta’s stable occupancy rate of 59.6% points to a steady stream of visitors in search of the region’s natural beauty and cultural richness. With its RevPAR of $212, and a commendable 5.1% increase over 2023, it strikes a balance between both value and growth. Oneonta offers attractions like the picturesque Glimmerglass State Park and historic Cooperstown with its Baseball Hall of Fame. This destination captures the essence of upstate New York—and the attention of investors who like a blend of small-town charm and big-city attractions.
Important Note: New STRs are only allowed in the MU-1, MU-2, R-4, and CII Districts unless they have obtained a short-term rental permit from the Code Enforcement Office.
21. Huddleston, Virginia
Perched along the shore of Smith Mountain Lake, Huddleston, Virginia, is a quintessential lakeside retreat. The area’s typical home value, a strong $608,880, reflects the appeal of living along the lake. With a steady occupancy rate of 59.6%, Huddleston remains a sought-after destination for those who want to swim, hike at the scenic Peaks of Otter, and go wine tasting all in one trip. The town’s impressive RevPAR of $307 underscores its allure, drawing in visitors with the promise of an escape that blends mountain and lake life. Huddleston’s RevPAR has grown a moderate 1.5%, but the town’s commitment to preserving its scenic beauty makes it a strong contender for the best short-term rental markets of 2024.
22. Cocoa Beach, Florida
Cocoa Beach, a quaint town along Florida’s Atlantic coast, is known for its sunny beaches and landmarks like the Kennedy Space Center. Rentals here benefit from the pleasant climate and the draw of Florida’s beaches. Typical home values are a steep $695,390, but occupancy rates average at 66.3% to help make up for the sticker shock. Despite the higher purchase price than other places on the list, Cocoa Beach’s $259 RevPAR keeps investors interested. Its 77.4 AirDNA Score illustrates that Cocoa Beach’s seaside location and nearby attractions offer experiences worth investing in.
23. Bradenton, Florida
Located on Florida’s Gulf Coast, Bradenton is a compelling destination for STR investors. With an inviting typical home value of $454,410, the city combines coastal charm with investment potential. Bradenton beckons sun-seekers and adventure travelers alike, and attractions like the vibrant Village of the Arts and the historic Cortez Fishing Village boost the occupancy rate to 61.4%. While achieving steady RevPAR growth at 2.2% is promising, it’s the city’s stable RevPAR of $202 that underscores its potential for lucrative returns. Though its AirDNA Score of 76.5 isn’t the highest on our list, its mix of coastal living and affordability makes it a worthwhile investment nonetheless.
24. Largo, Florida
Largo, Florida, is a strategic choice for vacation rental investments. Largo blends the excitement of the Tampa Bay area with vibrant lake parks and relatively affordable home values. Boasting an average home value of $440,760, the city stands out for its sun-soaked beaches and diverse local culture. Visitors can enjoy everything from the colorful Florida Botanic Gardens to the eye-opening Heritage Village. Largo maintains a steady occupancy rate of 61.7%, reflecting its reputation as a regular choice for travelers seeking coastal vibes. Despite only a modest RevPAR growth of 3.0%, the robust RevPAR of $182 highlights Largo as a promising location for short-term rental investments.
25. Ashford, Washington
Nestled in the scenic Pacific Northwest, Ashford, Washington, is a nature-centric destination quickly becoming a hotspot for vacation rental investment. Ashford combines affordability with pristine wilderness, with a modest typical home value of $323,380 despite the iconic landmark nearby. The city’s location near Mount Rainier National Park attracts travelers from near and far, contributing to its occupancy rate of 66.7%. Despite a slight dip in RevPAR growth at -6.7%, Ashford’s charm and solid RevPAR of $162 create an investment opportunity where nature’s tranquility meets profitable returns.
Important Note: Unlike other markets, Ashford regulates the type of property that can be an STR. Properties can operate as an STR if the home has five or fewer guest rooms, no more than two guests stay in each room, and the total number of guests per stay does not exceed ten.
Ideal Location Homes addresses the financing challenges in the vacation property market by offering innovative solutions. Their approach includes:
- Data-Driven Analysis: Evaluating a property’s income potential through analysis of daily rental and occupancy rates.
- Comprehensive Services: Offering guidance on market research, real estate brokerage, and structuring ownership groups.
- Flexible Plans: Catering to different investor needs, whether DIY, DWY (done-with-you), or DFY (done-for-you).
For those inspired by the potential of the 2024 vacation rental market as outlined in the AirDNA report, IdealLocationHomes.com is your go-to partner for turning investment opportunities into profitable realities. Whether you’re looking to finance a new vacation rental that is a short drive from where you love or across the counttry or seeking comprehensive investment support, our team is ready to assist you every step of the way.
Don’t miss the opportunity to be part of the thriving vacation rental market. The Ideal Location Homes team can fund up to 80% of your vacation Rental property acquisition and help structure your friend and family buyers group. Ideal Location Homes offers smart underwriting based on the properties daily rental and occupancy rates. Click Here To Schedule a Funding Call and explore how their tailored financing solutions can help you maximize your investment. Remember, the right investment in the right location can turn your vacation rental dreams into a successful reality.