Best Places to Invest in STRs
You’re ready to start your journey into investments. You know you want to start with short-term or vacation rentals. The question is: Where are the best places to invest in STRs?
There’s truly no simple answer to this, because so many different areas of the US have excellent attributes as short-term rentals. However, just to narrow it down, we used the following criteria:
Rental Demand
As the name implies, rental demand simply means that a lot of people want to vacation in the area and demand for short-term housing is great. This factor is quantified through TTM (trailing twelve months) revenue and the strength of rental demand year over year.
Revenue Growth
In determining the best places to invest in STRs, one of the most important factors to look at is the growth of revenue. Are area properties earning more dollars per bedroom year over year? It’s vital to choose an area that sees continual growth.
Investability
This qualifier is a comparison between the cost of acquiring the property vs. the revenue it will generate. This criterion is determined by examining the average rental values and operational costs in a neighborhood or region.
So, where are the magical places where these three factors all line up to provide the best places to invest in STRs? Right here:
Maui, HI
A perennial favorite, certain areas of Maui, such as the historical district of Lahaina and Wailuku enjoy an impressive 73% occupancy rate and average nightly rate of $375. Even better is the annual average revenue of over $100k. So, what’s the downside? With an average home price of $802k, it might be out of reach for first-time investors.
Chattanooga, TN
Hikers and outdoors enthusiasts flock to Chattanooga, for both the Appalachian mountains and the Tennessee River. This enthusiasm is borne out through an impressive year-round occupancy rate of 70%. While the $47k annual revenue certainly isn’t as impressive as Maui’s $100k, the average home price of less than $250k takes some of the sting out.
Gulfport/Biloxi, MS
Again, not a particularly surprising choice, but still a great option. With a low average unit price (just $155k!), the $44k in average revenue is very appealing. Not surprisingly in this warm, southern city with a multitude of diverse activities available, the year-round occupancy rate stays steady at about 70%. Do keep in mind that Gulfport/Biloxi is right in the hurricane belt.
Crystal River, FL
This may be a surprising choice. It’s not in the Disney area, nor is it ocean or gulf-front. However, it is the “Manatee Capital of the World” and near both Kings Bay and several wildlife refuges. It will only attract a certain demographic of visitors, but it attracts them strongly. With $51k average revenue, nearly 70% occupancy and a $249k average home price, Crystal River is a solid choice.
Joshua Tree, CA
Some people just like the desert! Located within the Mojave and just outside the entrance to Joshua Tree National Park, this area enjoys an impressive annual revenue of $85k, with an average property value of about $340k. At about 65%, occupancy rates are not quite as high as some on this list, but that doesn’t stop Joshua Tree from being a favorite among STRs.
Charleston, SC
What list of the best places to invest in STRs could be complete without Charleston? The quintessential genteel southern city, Charleston has it all, including an average daily rental rate of close to $400, average annual revenue of about $85k. The only downfall is the high average home purchase price of over $500k.
Brookings, OR
While this location is not as well known as the previous two, it has plenty to offer, including some great rental numbers. Called one of the best stops on the Oregon coast, Brookings is known for its mild year-round climate, scenic views, and myriad recreational activities. With average occupancy almost 75%, average annual revenue at almost $70k and an average home price of just under $460k, this is another solid choice.
Helen, GA
Perhaps the most unusual stop on the list, Helen, GA is reminiscent of a Bavarian village with its distinctive architecture. It’s a popular stop amongst the Eastern TN/Northern GA/Western NC crowd and its charm makes it easy to see why. With occupancy over 60%, annual revenue almost $50k, and home prices hovering around $200k, it’s an easy choice.
While there are many best places to invest in STRs throughout the US, we hope this list has given you a good head start.
If you have any questions or would like further information, please reach out to us. We’d love to chat!
