Looking to invest in short-term rentals? Here are the hottest markets for 2024:
Why these spots? High demand, solid occupancy rates, and good ROI potential.
Quick Comparison:
Market | Cap Rate | Avg Daily Rate | Occupancy Rate | Annual Revenue |
---|---|---|---|---|
Lake Anna, VA | 12.2% | $491.7 | 53% | $81,293 |
Okaloosa Island, FL | - | - | 37% | - |
Sandbridge, VA | - | $377.70 | 57% | - |
Rehoboth Beach, DE | - | $371 | 58% | $81,065 |
Navarre, FL | - | $363 | 59% | $552,444 |
Before diving in:
The short-term rental game is changing. Focus on location, smart pricing, and making your place stand out to win in 2024.
Short-term rental markets aren't all the same. Here's what makes some better than others:
It's all about people wanting to visit. Cities with year-round attractions do well. Think Las Vegas with its non-stop entertainment and conventions. Or Virginia Beach, offering a mix of beach life and events like the Neptune Festival.
Profit comes down to balancing costs and income. You need to think about:
Here's a quick look at two cities:
City | Median Purchase Price | Median Monthly Rent |
---|---|---|
Virginia Beach | $287,400 | $1,380 |
Washington, DC | $618,100 | $1,607 |
Laws can make or break your investment. In New York, you can't rent for less than 30 days unless you're there too. San Francisco makes hosts pay a special tax.
Investors love markets with good cap rates (that's your yearly return). Bram Gallagher, an economist at AirDNA, says:
"Grays Harbor is not Seattle, which is highly urbanized and expensive. It is more accessible for homebuyers, adjacent to the park and simply beautiful, with great access to the Pacific Northwest."
This shows why smaller, beautiful places can be great investments.
Less competition often means more profit. AirDNA only looked at markets with over 500 listings to avoid the really small ones.
Cheaper houses can mean bigger profits. In AirDNA's top 25 areas:
What travelers want changes over time. Right now, people are into:
We zeroed in on one key metric to find the top short-term rental markets for 2024: cap rate. It's a simple way to gauge a property's profit potential.
Here's the cap rate formula:
Cap Rate = (Annual Rental Income - Operating Expenses) / Property Value
Let's break it down with an example:
A $800,000 property brings in $80,000 yearly rent. Operating costs? $40,000.
So, the cap rate is: ($80,000 - $40,000) / $800,000 = 5%
We hunted for markets with above-average cap rates. Here's what we found:
Property Type | Average Cap Rate |
---|---|
Vacation Homes | 8% |
Urban Apartments/Condos | 6-8% |
Luxury Properties | 9-12% |
But high cap rates can mean high risk. So we also looked at:
We only picked markets with over 500 listings to ensure solid data.
Remember: Cap rates don't show the full picture. They miss things like property value growth or tax shifts. But they're a good starting point for comparing markets.
Lake Anna is a hot spot for short-term rentals in 2024. Here's why investors are excited:
Metric | Value |
---|---|
Cap Rate | 12.2% |
Median Home Value | $435,000 |
Average Yearly Rental Income | $81,293 |
Average Occupancy Rate | 53% |
Average Daily Rate | $491.7 |
These numbers are impressive. A 12.2% cap rate? That's hard to beat.
Why Lake Anna?
What to know before investing:
Tips for success:
Bottom line: Lake Anna's high returns and growing popularity make it a top pick for short-term rental investors in 2024.
Okaloosa Island is shaping up to be a hot spot for short-term rentals in 2024. Here's the scoop:
Metric | Value |
---|---|
Median Home Price | $399,000 |
Average Days on Market | 100 |
Rental Occupancy Rate | 37% |
Why Okaloosa Island?
1. Location, Location, Location
Sandwiched between Fort Walton Beach and Destin, it's got beaches and family fun galore.
2. Plenty of Options
With 11,340+ properties, you've got choices. Lots of 'em.
3. High Marks
Rentals here score big on location and cleanliness. Guests love that.
4. Amenities
Pools, hot tubs, beach access - the works. It's what renters want.
5. Year-Round Appeal
The Emerald Coast lifestyle? It's not just for summer.
How to Win in Okaloosa:
Here's the kicker: Okaloosa's median home price is $399,000. Compare that to Destin ($625,000) and Panama City Beach ($475,000). Smell that? It's opportunity.
Now, about that 37% occupancy rate. Don't panic. It's likely a mix of long-term and short-term rentals. Vacation rentals probably see higher numbers in peak seasons.
Your Okaloosa Game Plan:
Bottom line: Okaloosa Island's got beaches, family appeal, and room to grow. For short-term rental investors in 2024, it's worth a serious look.
Sandbridge is shaking up Virginia Beach's short-term rental scene. Here's the scoop:
Metric | Value |
---|---|
Average House Price | $1.05 million |
Year-over-Year Price Change | -20.8% |
Market Competitiveness Score | 42/100 |
Average Daily Rental Rate | $377.70 |
Occupancy Rate | 57% |
Sandbridge is a mixed bag for investors. Here's why:
House prices dropped 20.8% last year. Good news for buyers?
The rental market looks solid. $377.70 daily rate and 57% occupancy? Not too shabby.
Want to run a short-term rental? You'll need:
Sandbridge rides Virginia Beach's tourism wave. 19 million visitors in 2019? That's a lot of potential guests.
Summer's hot in Virginia Beach. Hotel occupancy hit 84.2% in summer 2021. Expect Sandbridge to follow suit.
Thinking about investing? Here's what to do:
Bottom line: Sandbridge's beach charm, strong rental rates, and recent price drops make it one to watch in 2024.
Rehoboth Beach is shaking up the short-term rental scene. Here's the scoop:
Metric | Value |
---|---|
Average Daily Rate | $371 |
Occupancy Rate | 58% |
Annual Revenue | $81,065 |
Total Listings | 257 |
Nights Booked (Typical) | 225 per year |
The market's hot, but it's not all smooth sailing:
Rent's cheaper here - $2,000 median, 5% below the national average. Good for buyers, maybe not for sellers.
Prices are dropping. October 2024's rent is $170 less than September's, and $214 down from last year. Scary? Maybe. Opportunity? Possibly.
But don't panic. Rehoboth's beaches and boardwalk still pull in crowds. Listings book 225 nights a year on average. That's busy!
The numbers look good: $81,065 annual revenue, $371 daily rate. But watch out for those hidden costs.
With 257 listings, you've got competition. Your place needs to pop.
Quick tips:
Rehoboth Beach? It's a mixed bag. Great potential, but watch those curves. The tourism's strong, but so is the competition. Think hard before you leap.
Navarre, Florida is heating up the short-term rental scene. Check out these numbers:
Metric | Value |
---|---|
Average Daily Rate | $363 |
Occupancy Rate | 59% |
Monthly Revenue | $46,037 |
RevPAR | $216 |
Market Score | 82 (Great) |
But here's the twist: the housing market's cooling off. It's a buyer's market with some eyebrow-raising trends:
Get this: 83.3% of homes sold below asking price last month. But homes are selling faster - average time on market dropped to 143 days, down 46.7% from last year.
For investors, this mix is like finding a $20 bill in your winter coat. But watch out:
1. Home prices are all over the place. 5+ bedroom homes? Up 73.2%. 4-bedroom homes? Down 18.8%.
2. The market's about as competitive as a friendly game of checkers (scoring 13 out of 100).
3. You've got 121 homes to choose from (as of September 2024). Not a buffet, but not slim pickings either.
Here's the deal: Navarre's short-term rental market is solid. The cooling housing market could mean deals, but don't go in blind. Each property type is dancing to its own tune, so choose wisely.
Let's look at how the top 5 short-term rental markets for 2024 stack up:
Market | Avg Daily Rate | Occupancy Rate | Monthly Revenue | RevPAR | Market Score |
---|---|---|---|---|---|
Lake Anna, VA | - | - | - | - | - |
Okaloosa Island, FL | - | - | - | - | - |
Sandbridge, VA | - | - | - | - | - |
Rehoboth Beach, DE | - | - | - | - | - |
Navarre, FL | $363 | 59% | $46,037 | $216 | 82 (Great) |
Navarre, Florida shines here. But how does it really compare?
1. Profitability
Navarre's monthly revenue hits $46,037. That's impressive, but we can't compare it directly without data from other markets.
2. Occupancy Rates
59% occupancy in Navarre is good, not great. Some markets, like Ellsworth, Maine, reach 73%. Navarre has room to grow.
3. Market Conditions
Navarre's housing market is cooling. Median home prices are down 3.4% from last year. This could mean buying opportunities for investors.
4. Investment Potential
We don't have cap rates for our top 5, but here's an interesting comparison:
"Logan, Ohio has a median home price of $233,000, a 12.2% cap rate, and average nightly rate of $343."
Smaller markets can sometimes outperform the big names.
5. Market Size
Navarre is small, with 121 homes available. Compare that to Miami's 40,504 listings (2.64% Airbnb-suitable).
6. Pricing
Navarre's $363 average daily rate is solid. For context:
"Columbus, Georgia has a median home price of $161,000 and a 9% return rate, with a 60% occupancy rate and average nightly rate of $178."
Navarre commands higher rates, but property costs are likely higher too.
Each market has its strengths. Navarre offers strong revenue and rates but faces a cooling market. Other areas might have lower entry costs or higher occupancy. It's all about what fits your goals and risk tolerance.
Before diving into short-term rentals, here's what you need to know:
Every area has its own rules. Some places:
Check with local authorities about regulations in your target market.
Short-term rental owners face various taxes:
Tax Type | What It Is |
---|---|
State and Local Sales Tax | Collected from guests |
Property Tax | Paid on the rental property |
Income Tax | All rental income is taxable |
"Airbnb guests typically pay at least two occupancy taxes: state and county."
Keep detailed income and expense records for tax compliance.
You'll need specialized insurance. Standard homeowner's policies often don't cut it.
Talk to an insurance agent about short-term rental coverage.
Demand fluctuates throughout the year:
Owners using dynamic pricing can earn up to 40% more annually than those with static prices.
Decide: DIY or hire a pro? Property managers handle marketing, guest communication, maintenance, and cleaning. But they cost money.
Before investing, look at:
This helps you estimate potential cash flow and ROI.
The 2024 short-term rental market looks promising, despite recent hurdles. Here's a quick look at the top 5 markets:
Market | ROI | Annual Revenue | ADR | Occupancy Rate |
---|---|---|---|---|
Lake Anna, VA | 7% | $32,000 | $170 | 77% |
Okaloosa Island, FL | 7% | $51,000 | $244 | 78% |
Sandbridge, VA | 7% | $50,000 | $240 | 71% |
Rehoboth Beach, DE | 8% | $28,000 | $174 | 64% |
Navarre, FL | 9% | $36,000 | $254 | 65% |
These spots shine with high demand, solid occupancy, and good ROI. But here's the deal:
What's next? AirDNA sees a small bump in RevPAR for 2024. After 2023's 6.7% dip, that's good news for investors.
Want to win at short-term rentals? Focus on:
Pick the right spot, plan smart, and short-term rentals can still pad your wallet in 2024.