Smart investing in short-term rental (STR) markets entails picking the most profitable markets. Picking the most profitable STR markets to run your vacation rental business has many benefits. For example, you could choose a location that offers tax advantages. With the overall market growth expected to surpass 228.9 billion USD by 2030, investing wisely in the most profitable short-term rental markets can mean great monetary gain.
We cover where STRs make the most money. We also discuss what a good ROI strategy looks like. Furthermore, we go through the types of rental properties that make the most money and the average profit for an STR property.
Several key factors play a role in what are the most profitable short-term rental markets in 2024. Some of these are:
Destinations are also one of the key influencers. As expected, major cities and tourist destinations will be some of the most profitable markets.
Naturally, you’re keen to know the most profitable short-term rental markets in 2024. While there are obvious cities and tourist destinations that bring in crowds, there are many emerging markets. These are what we’ll be focusing on.
Below, we list some of the most promising areas to invest in, with stats to back them up.
Columbus, Georgia is one of the best places to invest in STR right now. Homes are affordable at a general price of $160,600. Growth is 5%.
The city is a hub of American culture and is a phenomenal place for outdoor enthusiasts. This means that Columbus brings in a lot of visitors each year. The demand to visit Columbus means that it is attractive to investors.
Overall, Columbus and its robust rental demand offer investors a great incentive.
Spring Hill in Florida is an up-and-coming destination for investors looking toward the sunshine state.
Parked alongside Nature Coast, Spring Hill is a tourist haven. The city’s rental demand is reflected in a 61.7% occupancy rate. Median rental yield is 1.85%. Since it’s in Florida, investors can expect year-round sunshine and, thus, consistent occupancy rates.
Logan is one of the most profitable short-term rental markets in 2024—for good reasons.
Nestled in the heart of the Hocking Hills region, Logan is a unique spot for outdoor types. But there’s also a vibrant arts scene and cultural attractions. What’s more, its unique history and Native American lore make it even more attractive.
Stanton, Kentucky is a great investment opportunity with a home value of $133,406 and an attractive location to tourists.
Stanton is nestled between Red River Gorge Geological Area and Natural Bridge State Resort Park. With such scenery, Stanton calls nature enthusiasts from far and wide. Due to this and many other reasons, short-term rentals in this area have an approximate occupancy rate of 55.5%.
The data presented here is based on current market trends and available information. However, the short-term rental market is dynamic and subject to change. We recommend consulting with a financial or investment advisor to get the most accurate and personalized advice for your investments.
The significance of your projected ROI (return on investment) cannot be understated. As a short-term rental property investor, you want the best ROI possible. Hence, it’s crucial to understand ROI when evaluating rental property profitability.
There are several major factors which influence ROI, including:
In the short-term rental market, a good ROI is between 8-12%. A 5% ROI is considered the minimal amount desired by most investors. However, it’s possible to yield higher returns, which many investors seek.
Fortunately, you can make some simple calculations to help you realize your ROI. A simple formula to use is annual rent divided by purchase price multiplied by 100. The result will be your ROI percentage.
Different types of short-term rental properties have different levels of earning potential. Fortunately, many different types of properties can appeal to guests and produce high returns. Below is a list of these types of properties.
STRs targeted at vacationers, travelers, and remote workers are great because these people often prefer whole properties. Therefore, they’ll be more likely to rent out an entire property at one time, maximizing your earnings for the property.
Condos are attractive to many guests. Often situated near large cities, they cater to all kinds of people, including business travelers, who are often more than willing to pay to rent the entire space.
Tiny homes/ADU
ADUs (auxiliary dwelling units) are becoming increasingly popular. Statistics show that demand for tiny homes grew 27% year-on-year.
To start, short-term rentals are generally more profitable than long-term lets—50-75% more profitable.
In terms of short-term direct profits, several factors influence this. Location, property type, seasonality, rental rates, and management efficiency all play a role. Furthermore, achieving consistent bookings is a crucial factor tied to rental rates. This is just one of many aspects where hosts benefit from short-term rental management.
As we’ve outlined, different rental markets have varying profitability. Knowing trending areas and the places to be is vital for savvy investors. Furthermore, understanding the different factors and their role in determining the most profitable short-term rental markets in 2024 is important.
A significant determining factor for your short-term rental success is managing your property well. One way hosts optimize their STR profit potential is by using a professional short-term rental management service like Keybee.
With Keybee, you’ll maximize your income by letting our experienced professionals do the work for you. As the most complete and flexible all-in-one vacation rental management service, Keybee simplifies the entire process.
Place your property in the hands of experts and watch your income from it multiply
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