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Investing in short-term rentals (STRs) can be a gold mine—or a costly lesson in what not to do. The key? Picking the right market that fits your budget and investment goals.
Some folks want a vacation home that pulls its weight, others chase high cash flow, and some just want to ride the appreciation wave. Whatever your strategy, there’s a market out there calling your name.
We ran the numbers using data from BiggerPockets Market Finder, Zillow, Redfin, Realtor.com, and AirDNA to uncover STR markets that still make sense—whether you’re working with champagne money or a beer budget. Not every market will be a slam dunk for your goals, but the right one is on this list.
Now, let’s find your perfect match.
1. Investment Level: $200,000
Potential markets
Akron, Ohio
Median home price: $212,500
Occupancy rate: 52%
ADR: $188
Annual revenue: $28,800
Stanton, Kentucky
Median home price: $165,533
Occupancy rate: 51%
ADR: $227
Annual revenue: $37,833
Pittsburgh, Pennsylvania
Median home price: $208,593
Occupancy rate: 53%
ADR: $174.5
Annual revenue: $28,300
Peoria, Illinois
Median home price: $144,272
Occupancy rate: 55%
ADR: $153.5
Annual revenue: $24,200
Analysis
For investors working with a $200,000 budget, Akron, Stanton, Pittsburgh, and Peoria offer affordable entry points with strong return potential.
Akron has experienced a 15% increase in annual revenue since 2023, with demand consistently outpacing supply—even as listings have grown by 20% in the last year. This suggests a market that continues to thrive despite rising inventory.
Stanton saw a tremendous boost over the past few years but cooled off slightly in 2024. However, it still boasts an impressive 22.8% yield percentage, one of the highest on this list. Yield percentage, calculated as annual revenue divided by the median home price, helps determine how much an investor can make relative to their purchase price.
Pittsburgh is a larger, more stable market than Akron and Stanton, offering a mix of urban tourism, business travel, and local demand for short-term rentals. In the last year, it has seen an impressive 11% growth in RevPAR (revenue per available room) and a 12% growth in annual revenue per listing. There has been an increase of 12% in listings year over year, but occupancy rates are still growing by 3%, even with the influx of listings. With home prices still accessible and a strong sports, healthcare, and education-driven economy, Pittsburgh presents a lower-risk option for investors seeking steady cash flow.
Peoria was named AirDNA’s No. 1 best place to invest in a city and has seen a 9% increase across all key metrics, including annual revenue (AR), average daily rate (ADR), and RevPAR. However, listings have surged by 23% due to the hype surrounding its strong performance. While the growth is undeniable, investors should be mindful of how increasing supply could impact occupancy and pricing over time.
While all four markets present promising numbers, investors should consider local regulations, seasonality, and market saturation before diving in. Affordable entry points can be attractive, but long-term success hinges on understanding demand trends and competition in each area.
2. Investment Level: $500,000
Potential markets
Logan, Ohio
Median home price: $310,924
Occupancy rate: 54%
ADR: $362
Annual revenue: $65,700
Myrtle Beach, South Carolina
Median home price: $331,265
Occupancy rate: 58%
ADR: $285.36
Annual revenue: $47,600
Panama City Beach, Florida
Median home price: $353,298
Occupancy rate: 57%
ADR: $327
Annual revenue: $53,800
Sneads Ferry, North Carolina
Median home price: $425,219
Occupancy rate: 60%
ADR: $421
Annual revenue: $71,500
Seaside, Oregon
Median home price: $450,000
Occupancy rate: 59%
ADR: $336
Annual revenue: $62,700
Branson, Missouri
Median home price: $255,532
Occupancy rate: 51%
ADR: $249.99
Annual revenue: $40,500
Analysis
With a budget of $500,000 or less, investors have several strong markets to consider.
Logan stands out with its high annual revenue potential, but its market is filled with some of the most unique properties—meaning creativity is key to standing out. RevPAR has grown 9% and annual revenue by 10%, but listings have surged by 15% in the last year. It may not be for you if you don’t plan on catering to this creative market.
Myrtle Beach is an STR-friendly market with significant tourism appeal. The city is so pro-STR that there’s even speculation they might outlaw long-term rentals due to the high demand for vacation stays and the lack of supply. It’s a highly seasonal market but benefits from strong tourism. Annual revenue and ADR have increased by 4%, with RevPAR up 3%. However, there are over 16,000 active listings, and occupancy rates have trended down slightly (1% YoY).
Panama City Beach is one of the most STR-friendly markets in the country, with both annual revenue (AR) and average daily rate (ADR) rising 14%. While it’s a highly seasonal market, it offers consistent yearly revenue. Listings have only increased by 1%, showing demand remains strong. However, insurance costs are a concern for investors in Florida.
For those with a bit more to spend, Sneads Ferry (North Topsail Beach) provides high ADRs and substantial revenue, with beachfront proximity being the ultimate profitability booster (but also a cost driver). Listings decreased by 3% while growing in ADR (2%) and occupancy rates (3%).
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Meanwhile, Seaside and Rockaway Beach are proving to be strong short-term rental (STR) markets with favorable regulations and growing revenue potential. RevPAR, ADR, and annual revenue projections are all up, signaling strong demand, while occupancy has remained steady despite a 6% increase in new listings since 2024. These coastal destinations attract consistent tourism, benefiting from beachgoers, outdoor enthusiasts, and regional travelers.
Branson remains an appealing STR market despite seasonality concerns. Annual revenue and ADR increased by 6%, reaching $40,500, while the median home price is $255,532. However, active listings have risen by 7%, and occupancy rates have dipped 2% YoY. While Branson does experience seasonal dips, it was recently named one of Airbnb’s top 10 Thanksgiving destinations, indicating strong demand during peak periods.
With a balanced market and investor-friendly policies, these markets offer compelling opportunities for STR investors. However, understanding local competition, tourism trends, seasonality, and potential expenses is key in deciding which market aligns best with your strategy.
3. Investment Level: $800,000-$1 Million
Potential markets
Sevierville, Tennessee
Median home price: $687,000
Occupancy rate: 60%
ADR: $370
Annual revenue: $74,300
Pawleys Island, South Carolina
Median home price: $532,057
Occupancy rate: 56%
ADR: $441
Annual revenue: $70,700
Flagstaff, Arizona
Median home price: $625,695
Occupancy rate: 58%
ADR: $271.3
Annual revenue: $50,300
Hilton Head, South Carolina
Median home price: $761,100
Occupancy rate: 61%
ADR: $439.6
Annual revenue: $76,900
Sedona, Arizona
Median home price: $917,779
Occupancy rate: 61%
ADR: $376.8
Annual revenue: $74,100
Analysis
Sevierville, Pawleys Island, Flagstaff, Hilton Head, and Sedona all offer substantial short-term rental investment opportunities, each with distinct advantages, depending on your budget and strategy.
For investors in the $800,000 range, Sevierville, Pawleys Island, and Flagstaff stand out. Sevierville benefits from its proximity to the Smoky Mountains, a top-tier tourism destination. This has been one of the hottest markets for a few years now, and it shows—with occupancy rates dropping 4% YoY as supply starts to outpace demand (2% supply growth). The advantage will lie in ensuring you have the proper budget to match the amenities and location desired in the area.
At the same time, Pawleys Island offers a lucrative coastal market, where being as close to the beach as possible will significantly impact ROI. While you can technically get into Pawleys Island for under $600,000, expect to stretch closer to $800,000 if you want to compete at the highest level. RevPAR, ADR, and annual revenue are up 14% YoY in a less competitive market than others, with only 1,479 active listings, according to AirDNA.
Meanwhile, Flagstaff is one of the least seasonal STR markets in the U.S., making it a stable investment option compared to other vacation destinations. In 2024, annual revenue and RevPAR increased by 8%, while ADR rose by 6%, signaling steady demand. The city benefits from year-round tourism, drawing visitors for outdoor activities, national parks, and events that keep occupancy levels more consistent than in traditional seasonal markets.
All three markets require an understanding of peak tourism seasons and the design styles that appeal to their unique audiences to maximize returns.
With a $1 million budget, Hilton Head and Sedona present even more substantial opportunities. Hilton Head’s well-established coastal appeal attracts golfers, beachgoers, and year-round tourists, making it a reliable STR market. However, competition is fierce, so standout design and top-tier amenities are necessary.
With this supply growth and 7,330 active listings, occupancy rates have trended down by 3%, according to AirDNA. On the other hand, annual revenue and RevPAR are up by 5%, meaning people are willing to pay for this highly desired vacation area.
On the other hand, Sedona is all about breathtaking red rock views, luxury retreats, and a steady stream of adventure-seeking visitors. The yield percentage in Sedona may not be as enticing as some other markets. Still, with all metrics (occupancy, ADR, RevPAR, and annual revenue) trending upwards by 5%+, Sedona could be a winner for people in the Southwest. While its year-round occupancy is a significant draw, investors must navigate local STR regulations carefully.
In all five markets, maximizing returns requires premium experiences—think high-end outdoor spaces, hot tubs, and professional-grade interior design. Whether it’s a mountain retreat, a beachfront escape, or a desert oasis, the right strategy can turn these markets into highly profitable investments.
Final Thoughts
Every STR market isn’t a one-size-fits-all opportunity. Each investor has unique goals, whether maximizing cash flow, long-term appreciation, or balancing both.
If strong cash flow is your priority, budget-friendly markets can offer high returns with the right deal. If appreciation is your focus, destinations like Sedona and Sneads Ferry may be more your speed. And if you want a blend of both—plus a prime vacation location—Hilton Head and Sedona should be on your radar.
The beauty of STR investing is that the path is yours to choose, and what one investor overlooks might be another’s gold mine.
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