STR investments can be a profitable gold mine or an expensive lesson in bad luck. The secret is choosing a market based on your investment objectives and financial constraints.
A vacation property that brings in much money is what some people seek, while others want to ride the wave of appreciation. Whatever your approach, a market is out there just waiting for you.
Using information from Realtor.com, Redfin, Zillow, BiggerPockets Market Finder, and AirDNA, we dove into the numbers to find STR markets that still make sense, regardless of money. The proper market is on this list, but not all markets will be a shambles for your objectives.
1. $200,000 is the investment level.
Prospective consumers
• Akron, Ohio
The median house price in Stanton, Kentucky, is $212,500. The occupancy rate is 52%. The annual revenue is $28,800. The ADR is $188.
• 51% of homes are occupied; the median price is $165,533.
ADR: $227
• $37,833 in revenue each year
Pennsylvania’s Pittsburgh
The average house costs $208,593, and 53% of it is occupied.
ADR: $174.5; revenue for the year: $28,300
Peoria, Illinois
• ADR: $153.5 • Median house price: $144,272 • Occupancy rate: 55% • Revenue per year: $24,200
Analysis
Akron, Stanton, Pittsburgh, and Peoria are not just entry sites, but they are also excellent ones with high return possibilities for investors with a $200,000 budget. The potential for high returns in these markets should make you feel optimistic and excited about the possibilities.
Despite a 20% increase in listings in the past year, Akron’s yearly revenue has increased by 15% since 2023 due to demand continuously exceeding supply. This resilience of the Akron market should reassure you about its stability, even with growing inventories.
After experiencing a significant uptick in recent years, Stanton cooled off a little in 2024. Nevertheless, it has one of the highest yield percentages on this list, at an impressive 22.8%. This high yield percentage should make you feel confident about the potential return on your investment in the Stanton market.
Between business travel, urban tourism, and local demand for short-term rentals, Pittsburgh is a more significant and stable market than Akron and Stanton. In the past year, the annual income per listing and RevPAR (revenue per available room) have grown by 12% and 11%, respectively. The number of postings has increased by 12% in the past year, yet despite this, occupancy rates are improving by 3%. Pittsburgh offers investors looking for consistent income flow a lower-risk alternative because of its vigorous sports, healthcare, and educational sectors and its affordable house prices.
Peoria saw a 9% growth in all major indicators, including annual revenue (AR), average day rate (ADR), and revenue, and was rated AirDNA’s No. 1 best location to invest in. However, its impressive performance’s excitement has caused listings to soar by 23%. Investors should know how rising supply may eventually affect pricing and occupancy, even while the rise is evident.
Before investing, investors should consider seasonality, local laws, and market saturation, even though all four markets show encouraging data. Cheap entry points may seem alluring, but long-term success depends on knowing each region’s competition and demand patterns.
2. Investment Amount: $500,000.
Prospective consumers
Ohio’s Logan
• Average house price: $310,924; 54% occupancy rate; $362 ADR; $65,700 in revenue annually
The South Carolina town of Myrtle Beach
Occupancy rate: 58%; ADR: $285.36; median home price: $331,265; and yearly revenue: $47,600
• The beach at Panama City, Florida
The average house is $353,298. The occupancy rate is 57%.
$327 ADR and $53,800 in sales annually
In North Carolina, at Sneads Ferry
Home prices average $425,219, and 60% of homes are occupied.
$421 ADR and $71,500 in revenue annually
Seaside, Oregon
The median home cost is $450,000, and 59% of homes are occupied.
$336 ADR and $62,700 in sales annually
Missouri’s Branson
• ADR: $249.99 • Occupancy rate: 51% • Median home price: $255,532 • Revenue per year: $40,500
Analysis
Investors with a $500,000 or less budget have several robust markets.
Though its market includes some of the most unusual properties, Logan stands apart due to its great potential for annual revenue; therefore, differentiation requires ingenuity. Despite a 15% increase in listings over the past year, which indicates a growing interest in the market, RevPAR has increased by 9% and yearly income by 10%. For those who do not intend to serve this creative market, it might not be for them.
Myrtle Beach is a market that is STR-friendly and popular with tourists. Since there is a great demand for holiday rentals and a shortage of supply, the city is so pro-STR that there is even conjecture that they may ban long-term rentals. Although the market is somewhat seasonal, it benefits from high tourism. RevPAR is up 3%, and annual revenue and ADR have climbed by 4%. Nevertheless, over 16,000 listings are currently available, and occupancy rates have somewhat decreased (by 1% year over year).
The average daily rate (ADR) and annual revenue (AR) have increased by 14%, making Panama City Beach one of the most STR-friendly markets in the nation. Despite its extreme seasonality, it generates steady annual revenue. The fact that listings have only gone up 1% indicates that demand is still high. Nonetheless, Florida investors are concerned about insurance premiums.
The beachfront location is the best way to increase profitability (but also a cost driver) at Sneads Ferry (North Topsail Beach), which offers high ADRs and significant revenue for those with a little more money to spend. Occupancy rates (3%), ADR (2%), and listings increased by 3%.
Concurrently, Seaside and Rockaway Beach are robust short-term rental (STR) markets with advantageous laws and increasing earnings possibilities. Despite a 6% rise in new listings since 2024, occupancy has stayed constant, and RevPAR, ADR, and annual revenue estimates are all up, indicating robust demand. Beachgoers, nature lovers, and local tourists contribute to the steady flow of tourists to these coastal locations.
In spite of seasonal difficulties, Branson is still a desirable STR market. ADR and annual revenue both rose 6% to $40,500, while the median price of a property is $255,532. However, while occupancy rates have decreased by 2% year over year, active listings have increased by 7%. Although Branson can see seasonal downturns, it was recently included as one of Airbnb’s top 10 Thanksgiving destinations, suggesting that demand is high throughout these times.
These markets present attractive prospects for STR investors due to their well-balanced markets and investor-friendly regulations. However, selecting the market that best fits your approach requires an awareness of local competitors, tourism patterns, seasonality, and potential costs.
3. The amount of money invested: $800,000 to $1 million
Prospective consumers
The Tennessee city of Sevierville
$687,000 is the median home price, and 60% of homes are occupied.
• $370 ADR
• $74,300 in revenue each year
South Carolina’s Pawleys Island
• 56% of homes are occupied; median price: $532,057
ADR: $441
• $70,700 in revenue each year
Florida’s Flagstaff
• ADR: $271.3; year-over-year revenue: $50,300; median home price: $625,695; occupancy rate: 58%
Charleston’s Hilton Head
Price of a median home: $761,100
61 percent occupancy rate
Revenue per year: $76,900; ADR: $439.6; Sedona, Arizona
• ADR: $376.8; median house price: $917,779; occupancy rate: 61%; and yearly income: $74,100
Analysis
Significant short-term rental investment options are available in Sevierville, Pawleys Island, Flagstaff, Hilton Head, and Sedona; each has unique benefits based on your approach and budget.
Sevierville, Pawleys Island, and Flagstaff are exceptional for investors, with an annual budget of $800,000. The Smoky Mountains are a popular tourist destination and Sevierville benefits from being close to them. For the past few years, this market has been one of the hottest, and it shows that occupancy rates are declining 4% year over year as supply begins to surpass demand (an increase of 2%). Ensuring you have the right amount of money to match the features and desired location in the neighbourhood will be the edge.
Pawleys Island, on the other hand, has a thriving coastal market, and ROI will be significantly impacted by proximity to the shore. Technically, admission to Pawleys Island costs less than $600,000, but if you want to compete at the top level, budget closer to $800,000. In a less competitive market than others, with only 1,479 active listings, RevPAR, ADR, and annual revenue are up 14% YoY, according to AirDNA.
In contrast, Flagstaff has one of the least seasonal STR markets in the United States, which makes it a reliable choice for investors. Steady demand was shown by the 8% increase in annual revenue and RevPAR and the 6% increase in ADR in 2024. Occupancy levels are more stable than in conventional seasonal markets thanks to year-round tourism, which attracts tourists for events, national parks, and outdoor sports.
Hilton Head and Sedona provide even more significant potential with a $1 million budget. Because of its well-established coastal attractiveness, Hilton Head is a dependable STR market that draws year-round tourists, golfers, and beachgoers. But with so much competition, unique design and first-rate amenities are essential.
Due to this increase in availability and 7,330 active listings, AirDNA reports that occupancy rates have decreased by 3%. However, the fact that annual sales and RevPAR have increased by 5% indicates that consumers are prepared to pay for this popular holiday spot.
Understanding the busiest travel times and the design motifs that appeal to their respective target markets is essential for all three markets to optimize profits.
On the other hand, Sedona is known for its beautiful red rock vistas, opulent hideaways, and constant influx of tourists looking for adventure. Some markets may provide a more alluring yield rate than Sedona. Occupancy, ADR, RevPAR, and annual income are all increasing upward by 5%+; therefore, Sedona may be a winner for Southwest residents. Its year-round occupancy is a big lure, but investors need to know local STR laws.
In all five markets, premium experiences are necessary to maximize results; consider upscale outdoor areas, hot tubs, and expertly designed interiors. Whether looking for a beachside, desert paradise, or mountain hideaway, the correct approach can make these sectors highly lucrative investments.
Conclusion
There isn’t a single STR market that offers all opportunities. Every investor has different objectives, such as balancing long-term appreciation with cash flow maximization.
Low-cost markets can yield substantial rewards if you prioritize a healthy cash flow. If you’re looking for appreciation, you might be more interested in places like Sedona and Sneads Ferry. And you should be considering Hilton Head and Sedona if you’re looking for a combination of both and a great place to go on vacation.
You can select your path regarding STR investment; what one investor may ignore could be a treasure trove for another.
