Another year, another list. No, we’re not talking about the Christmas list I still send to Santa every year, asking to make the McRib a full-time item (I’m hoping this is a no-judgment zone).
This year, my wish list features something even better: cities you may not know exist but are thriving in the short-term rental (STR) world. I like to call them “hidden gold mines,” but you could also think of them as “sneaky STR cities.” These are the places where the numbers speak louder than the name recognition.
How Did We Pick These Cities?
We didn’t just throw darts at a map; there’s real strategy behind this list. Here are the key metrics we used:
- Yield %: This is calculated by dividing the estimated annual revenue (AirDNA) by the average home price, according to Zillow. The higher yield % equals better potential returns.
- Occupancy Rates: These cities boast above-average occupancy rates, signaling that people actually travel there. If you can craft a standout listing (hello, Insta-worthy photos, and unique features), the demand is there to fill your calendar.
Disclaimer: These are averages for the area. Results may vary depending on how awesome you make your property. Also, yes, we know Fargo is famous, but let’s admit it—it’s been Fargo-tten.
The List: Hidden Gold Mine Short-Term Rental Cities
| Market | Yield % | Occupancy % | Annual Revenue | Avg. Home Price |
|---|---|---|---|---|
| 1. Dayton, OH | 19.14% | 54% | $28,400 | $148,000 |
| 2. Covington, OH | 18.56% | 57% | $41,900 | $226,000 |
| 3. Branson, MO | 15.57% | 51% | $40,800 | $262,000 |
| 4. Tulsa, OK | 15.51% | 53% | $31,400 | $202,000 |
| 5. Amarillo, TX | 14.37% | 52% | $28,300 | $197,000 |
| 6. Forest Acres, SC | 13.65% | 61% | $43,400 | $318,000 |
| 7. Bryson City, NC | 12.6% | 51% | $40,100 | $321,416 |
| 8. Manchester, VA | 11.65% | 59% | $35,600 | $306,000 |
| 9. Fargo, ND | 11.44% | 56% | $33,800 | $295,000 |
| 10. Christiana, PA | 9.5% | 61% | $36,400 | $383,000 |
Breaking Down the Gold Mines
Let’s take a closer look at why these cities made the cut:
1. Dayton, OH
Dayton is at the top of the list for a reason. With a whopping 19.14% yield, it offers a budget-friendly entry point for investors. The city benefits from consistent demand driven by its universities, aviation history, and business travelers. And at an average home price of $148,000, it’s an ideal market for first-time STR investors.
2. Covington, OH
Covington is Dayton’s quieter cousin but packs a punch with an 18.56% yield. The higher annual revenue ($41,900) makes up for the slightly steeper home price of $226,000. Small-town charm and proximity to urban conveniences make it a perfect blend for travelers.
3. Branson, MO
If family-friendly fun is your niche, Branson is your market. Known for its live entertainment and attractions, Branson pulls in visitors year-round. With $40,800 in revenue and a 15.57% yield, it’s an excellent spot for larger properties catering to groups.
4. Tulsa, OK
Tulsa combines cultural vibrancy with affordability. The arts scene, Route 66 nostalgia, and a growing downtown make it a hidden gem for mid-tier STRs. With $31,400 in annual revenue and a 15.51% yield, it’s an up-and-comer worth exploring.
5. Amarillo, TX
Ever heard of the Palo Duro Canyon? Amarillo’s proximity to this natural wonder keeps visitors coming. Affordable home prices ($197,000) and $28,300 in annual revenue make this a solid choice for investors seeking steady returns.
6. Forest Acres, SC
This South Carolina gem is more than just scenic—it’s profitable. With a 61% occupancy rate and $43,400 in revenue, it’s a strong market for investors who want both yield (13.65%) and lifestyle value.
7. Bryson City, NC
Nestled near the Great Smoky Mountains, Bryson City is a magnet for hikers and nature lovers. While its yield is slightly lower at 12.6%, the scenic backdrop and $40,100 annual revenue make it a standout for experience-driven stays.
8. Manchester, VA
Small-town Virginia is thriving. Manchester offers a blend of rural charm and proximity to larger cities, with a 59% occupancy rate and $35,600 in annual revenue. Its 11.65% yield is nothing to scoff at.
9. Fargo, ND
Don’t let the cold winters fool you—Fargo’s STR market is heating up. With $33,800 in revenue and an 11.44% yield, it’s a reliable choice for investors looking to diversify.
10. Christiana, PA
The lowest yield on the list, but Christiana still delivers $36,400 in revenue with a 61% occupancy rate. Its historic charm and location near major cities make it an excellent pick for those balancing profit and personal enjoyment.
Why the West Coast Didn’t Make It
Notice the absence of West Coast cities? Blame sky-high home prices. While appreciation rates are often higher out West, they don’t leave much room for cash flow. That’s why our list leans heavily on the Midwest and South, where affordability and yield reign supreme.
What’s Your STR Goal?
At the end of the day, investing in STRs isn’t a one-size-fits-all game. Are you after cash flow, appreciation, tax benefits, or a lifestyle asset for your family vacations? The beauty of this list is that it offers a little something for everyone.
If you’re wondering whether your deal stacks up, give our STR Calculator a try. It’s like having a crystal ball for your investment future.
Find the Hottest Markets of 2024!
Effortlessly discover your next investment hotspot with the brand new BiggerPockets Market Finder, featuring detailed metrics and insights for all U.S. markets.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
Recent Comments