Top 10 Best Vacation Rental Markets in 2024

If you’re looking to expand your vacation rental portfolio, searching for opportunities in the best vacation rental markets is a great place to start. The goal is to find the most lucrative opportunities with great long-term prospects. However, how do you identify the best vacation rental markets?

Here are some tips to help you in your property search along with data from recent studies conducted to identify the best places to buy vacation rental property.

The State of Short Term Rental Markets

2023 was a rough year for real estate investors and you may find yourself wondering if it’s a good idea to invest in a short term rental property. However, forecasts early in the year that predicted the market would stabilize have mostly been accurate. The result is that real estate investors need to be discerning when looking to expand their vacation rental business and pay close attention to the markets. Luckily, AirDNA has conducted a comprehensive analysis of the short term rental market landscape and we are here to break down their findings.

Identifying the Best Vacation Rental Market

As you search for vacation rental properties to invest in, it’s important to keep in mind that vacation rental business in almost every market is seasonal. Some markets are even driven by local events and not the weather or time of year. As a result, your cash flow forecasts should account for the fact that the volume of inquiries from guests will differ significantly depending on the time of year.

That said, the best places to buy a vacation rental often share these three common factors: rental demand, seasonality, and property revenue growth. When these factors come together, your chances of finding good investment opportunities are high.

Here are some other factors that can be used to identify the best vacation rental markets:

Taxes

Taxes may be considered as both an advantage and a disadvantage when considering a vacation rental market. First, you need to be able to afford all local, state, and federal property taxes. At the same time, you also need to pay attention to the taxes that will be assessed on any income that you earn from your rental activities. The best vacation rental markets offer tax write-offs that specifically apply to vacation rental property businesses.

Legality

The legal climate regarding vacation rental platforms is constantly in flux as a result of many municipalities trying to establish boundaries with companies like Airbnb. As a result, the best places to own vacation rental property are those where properties can be rented out legally (with clearly-defined regulations) as short-term rentals.

Risk

Although any type of investment is subject to risk, vacation rental investors should be especially mindful of risks to a vacation rental market, such as adverse weather or economic stability. Finding the best vacation rental markets will allow you to minimize these risks and sufficiently protect your interests with affordable, comprehensive business and property insurance policies.

Owning a vacation rental property in a hot market can bring in a good ROI if you are able to maximize your bookings throughout the year. However, the trick to maintaining profitability is to ensure that you’ve properly calculated the potential cash flow to your property by taking all of these factors into account.

Cap Rate

A higher cap rate generally means you might see a bigger return on your investment, but it can also signal higher risk or that the property might not be in the most sought-after location. On the flip side, a lower cap rate usually means a steadier, potentially more reliable investment, but the returns might be smaller. Investors use cap rates to weigh different properties and figure out which ones best match their goals and how much risk they’re comfortable with.

The Overall 10 Places in the USA for Your Vacation Rental Property

AirDNA collects data annually from both Airbnb and Vrbo when compiling their reports, factoring in the state of the housing market, the rental demand, revenue growth, the profit to purchase cost ratio, and local regulatory risk. The data is clear, there are still plenty of opportunities for investors interested in rental property. Let’s look at their top markets:

1. Columbus, Georgia

Columbus, Georgia, is a prime location for vacation rental investors, with a notable AirDNA Score of 90.2. The city’s strong rental demand is reflected in its 59.5% occupancy rate, while the typical home value stands at an affordable $160,600, complemented by a 5% growth in RevPAR.

Located along the Chattahoochee River, Columbus is home to the world’s longest urban whitewater course and offers rich Civil War and military history, making it an attractive destination for both history buffs and outdoor enthusiasts. This blend of affordability, solid revenue growth, and diverse visitor appeal makes Columbus a top investment choice.

2. Ellsworth, Maine

A key factor in Ellsworth’s appeal is its proximity to Acadia National Park, where visitors can experience rugged coastlines, hike scenic trails, and witness the sunrise from Cadillac Mountain, the first spot in the U.S. to see it. The city’s strong market performance is reflected in a high occupancy rate of 72.8% and a RevPAR of $244, despite a higher initial investment of $324,670.

Ellsworth’s combination of New England charm, historic downtown, and access to outdoor adventures makes it a compelling choice for vacation rental investors.

3. Logan, Ohio

Logan Ohio being one of only two destinations to achieve a perfect 100 “Investability” score, should definitely be on any vacation rental owners’ radar. Located in the heart of the Hocking Hills region,

Logan’s name originates from the Native American word “hockhocking,” meaning “bottle-shaped” or “twisted,” a nod to the area’s winding, rugged valleys. The town attracts visitors with its vibrant arts scene and outdoor activities, contributing to an occupancy rate of 57.3%. Although Logan may not boast the highest occupancy or RevPAR growth rates, it offers a strong Gross Yield of 18.6%, making it a compelling choice for investors seeking to expand their portfolio.

4. Spring Hill, Florida

Spring Hill, Florida, is emerging as a promising destination for investors in the Sunshine State, with a strong Rental Demand score of 86.1. Located along Florida’s Nature Coast, Spring Hill offers natural attractions like the lush Chassahowitzka Wildlife Management Area and the captivating Weeki Wachee Springs State Park.

The city’s year-round appeal is evident in its 61.7% occupancy rate, highlighting its attractiveness to tourists. For those looking for both financial growth and a piece of Florida paradise, Spring Hill is an excellent choice.

5. Sneads Ferry, North Carolina

Sneads Ferry, North Carolina, offers a higher typical home value of $555,130 compared to other cities on this list, but this coastal town justifies the investment with a notable RevPAR of $290, which grew by 3.3% over the past year. This growth suggests that the higher upfront cost may lead to ongoing profitability, though future financial returns are not guaranteed.

Located along the Atlantic Ocean, Sneads Ferry attracts visitors with its proximity to North Topsail Beach and miles of pristine coastline, making it an ideal destination for those seeking a coastal retreat and for Airbnb hosts aiming to invest in top short-term rental markets.

6. Winter Haven, Florida

Winter Haven, Florida, lives up to its name as a warm and inviting option for vacation rental investors. With a typical home value of $263,811, it offers a more affordable entry point compared to the statewide average of $389,000. This makes Winter Haven appealing for those seeking to invest in year-round sunshine without the higher price tag.

Located in Central Florida, the city draws tourists with family-friendly attractions like LEGOLAND Florida Resort, a charming downtown, and a scenic chain of lakes. Winter Haven combines strong investment potential with the charm of Central Florida living.

7. Stanton, Kentucky

Stanton, Kentucky, stands out as a prime location for short-term rental investments, with an affordable typical home value of $146,470 and strong tourist appeal. Situated near the picturesque Red River Gorge Geological Area and Natural Bridge State Resort Park, Stanton is a draw for nature enthusiasts. Short-term rentals in the area enjoy a 55.5% occupancy rate, driven by the demand for outdoor activities.

With a perfect Investability score of 100—shared only with Logan—and an AirDNA Score of 86, Stanton demonstrates its strong potential as a vacation rental investment.

8. Port Angeles, Washington

Port Angeles, Washington, offers an accessible entry point into real estate with a typical home value of $390,480. Its strategic location near the Port Angeles Fine Arts Center and the breathtaking Olympic National Park—featuring striking mountain peaks and vibrant temperate rainforests—adds to its appeal.

With a steady occupancy rate of 64.3%, Port Angeles is popular among outdoor enthusiasts and proves to be a reliable option in the short-term rental market, making it an attractive choice for those starting in vacation rental investments.

9. Akron, Ohio

With a typical home value of $145,320, Akron presents an investor-friendly real estate market. The city benefits from demand for both Akron itself and nearby Cleveland, offering a dual appeal for short-term rental hosts. Akron has its own attractions, such as the Akron Art Museum and the historic Stan Hywet Hall & Gardens, which contribute to nearly 20 million visitors to the area annually.

With an AirDNA Score of 84.7, Akron combines affordability, growth potential, and a vibrant short-term rental market, making it a practical choice for investors.

10. Fairbanks, Alaska

Fairbanks, Alaska, offers a compelling investment opportunity, highlighted by the spectacular Northern Lights. Following its top ranking on AirDNA’s Best Places to Invest 2023, the typical home value in Fairbanks has risen to $238,670. Despite this increase, the city maintains a steady 64.8% occupancy rate, making it a promising market for investors who can capitalize on a strong summer season and a quieter winter.

In addition to its economic potential, Fairbanks attracts visitors with its unique blend of natural wonders and cultural attractions within the Arctic Circle. With an AirDNA score of 81.4, Fairbanks secures its place on our list of top short-term rental markets for the second consecutive year.

Honorable Mentions:

Consider Vacation Rentals in Small Towns and Hidden Gems

Investors in short-term rentals should consider small towns and hidden gems for their potential to offer unique opportunities and competitive vacation markets. These areas often present lower entry costs and less market saturation compared to larger cities, making them attractive for those seeking affordability and growth potential.

Additionally, small towns and hidden gems frequently feature distinct local attractions and charm, which can draw tourists looking for a different experience from typical urban stays.

Furthermore, investing in less prominent locations can provide stability in the rental market. Smaller towns may have more stable occupancy rates and less volatility, as they often cater to niche markets or seasonal visitors.

By focusing on these under-the-radar destinations for their short term rental investment, hosts can uncover hidden value and capitalize on the growing trend of travelers seeking authentic and off-the-beaten-path experiences and outdoor recreation.

Though you might be tempted to only consider the top markets to maximize rental income, it’s important to remember that all of these locations have great potential for a vacation house.

Beaufort, South Carolina

Beaufort, South Carolina, offers a blend of historical charm and coastal appeal, with a reasonable typical home value of $346,580, making it a solid investment choice. Its historic district, waterfront park, and Lowcountry cuisine contribute to a 60.9% occupancy rate and a $143 RevPAR, reflecting consistent demand.

Fennville, Michigan

Fennville’s rural charm draws visitors looking for a peaceful retreat. Known for its orchards and vineyards, the area offers affordable home values of $309,420, allowing hosts to provide guests with a taste of countryside living without high costs. With a solid 56.2% occupancy rate and a RevPAR of $334, Fennville remains an appealing entry point into the vacation rental market.

Helen, Georgia

Helen’s charming Bavarian architecture and vibrant cultural scene make it a standout in the Blue Ridge Mountains. With a typical home value of $371,580 and increasing demand, fairytale town continues to attract visitors and investors.

Oneonta, New York

With an average home value of $210,620, Oneonta stands out for its strong occupancy rate of 59.6% and RevPAR of $212, reflecting a steady flow of visitors and significant growth. The area’s attractions, including Glimmerglass State Park and Cooperstown’s Baseball Hall of Fame, highlight its blend of natural beauty and cultural appeal, making it a compelling choice for investors seeking a balance of value and potential.

Ashford, Washington

Ashford’s allure and impressive RevPAR of $162 make it an investment opportunity where serene natural beauty meets attractive profit potential.

Final Thoughts

If you want to grow your portfolio or even choose the best place to purchase your first vacation rental property, knowing the best vacation rental markets to invest in is the first step. Every short-term rental market is different therefore it is important that you do your research, crunch the numbers, and even request the advice of a local real estate agent before you decide to invest.

The next step for PRO hosts is to optimize and automate your daily routine. This is where iGMS can come in handy.