Top 5 Short-Term Rental Markets for 2023
Does the idea of investing in a vacation rental home sound enticing? For many, it does, as you have the potential to earn equity while others help pay off the mortgage. Plus, you can use the property yourself whenever you’d like.
However, one of the most important pieces is knowing where to buy a vacation rental property. The location where you buy your next vacation rental investment property will greatly impact its performance. Keep reading to discover some of the best short-term rental, or STR, markets in 2023.
Criteria for market selection
Mashvisor recently released its list of the best cities or towns to buy an STR property. If you’re unsure where to invest, keep reading to learn where to look. How these were determined were selected using the following criteria:
- Each market should have a median property price that doesn’t exceed $1 million
- Each market should have a minimum of 100 active Airbnb listings
- Each market should have a monthly rental income of at least $2,000
- Each market should have a cash-on-cash return of no less than 2.00%
- Each market should have a 50% short-term rental occupancy rate or higher
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Top 5 Markets
Without further ado, here are the top five areas, ranked highest to lowest cash-on-cash return. These are based on Mashvisor’s short-term rental data from December 2022.
- Harpers Ferry, WV
Harpers Ferry is a quaint 19th century town designated a National Historic District. The area is not only good for history buffs, though. You can also explore the rolling Blue Ridge mountains and the rushing waters of the Shenandoah and Potomac rivers.
- Avg Sales Price: $332,229
- Appreciation: 6.25%
- STR Daily Rate: $220
- Cash on Cash Return: 7.88%
- Schiller Park, IL
Schiller Park, a suburb of Chicago, offers residents a dense suburban feel. It offers plenty of dining and entertainment options and is easily accessible to tourists and visitors.
- Avg Sales Price: $306,112
- Appreciation: 6.46%
- STR Daily Rate: $165
- Cash on Cash Return: 7.79%
- Columbia Heights, MN
Columbia Heights was named an All-America City recipient in 2016. It is a close suburb of Minneapolis, offering families and young professionals an urban-suburban mix with plenty of restaurants, coffee shops, and parks.
- Avg Sales Price: $299,858
- Appreciation: 8.54%
- STR Daily Rate: $158
- Cash on Cash Return: 7.68%
- Harvey, LA
In southern Louisiana, Harvey features plenty of attractions such as exploring its multiple parks perfect for enjoying a picnic or participating in various sports activities. Plus, nearby Lafitte Greenway provides amazing views great for outdoor activities.
- Avg Sales Price: $237,323
- Appreciation: 6.19%
- STR Daily Rate: $181
- Cash on Cash Return: 7.53%
- Northlake, IL
Northlake is also known as “The City of Friendly People.” Located only 25 minutes from Chicago, it offers tourists and visitors the peace of the suburbs but quick and easy access to big-city amenities.
- Avg Sales Price: $265,553
- Appreciation: 7.94%
- STR Daily Rate: $168
- Cash on Cash Return: 7.42%
Key Takeaways
With the pandemic accelerating the work-from-home trend, it has also accelerated the migration to big city suburbs. This is apparent in the findings. The trend continues to be that cities outside of big metros tend to do very well for STRs, given the price point of the home and the daily rates compared to properties or Airbnbs in big metro areas.
With lower price points, some of these markets could be a great – and easier – way for groups to get their feet wet into co-buying.
Nestment, Inc. does not guarantee and is in no way responsible for the accuracy of information provided in this blog post. All information is provided “AS IS” and with all faults. Data presented here may not reflect all real estate activity in the market. While the information on this site is about legal and tax issues, it is not intended as legal or tax advice or as a substitute for the particularized advice of your own attorney and tax professional.
