Best U.S. Cities to Invest in a Short-Term Rental in 2022 — Part 1
When investing in a short-term rental (STR), location can make all the difference in the success and potential revenue generated from your vacation rental. How then, do you determine the most profitable places for a short-term rental in the U.S.? At Beyond, we use revenue per available night (RevPAN) and occupancy rates to determine the best places to invest in STRs.
According to most data sources, the average Airbnb occupancy rates in the United States are about 48%. And by using RevPAN, we can make the most accurate comparison by measuring revenue per night based on available nights. An STR, for example, might earn $10,000 one month and $20,000 the next. However, if the available nights to rent the STR also doubled in the second month, those months would reflect the same RevPAN. (For a more detailed explanation of RevPAN, check out our breakdown.)
In the next two blog posts, we’ll use the latest Beyond data to identify the top 17 surging United States locales to invest in. On average, these markets had 65% occupancy rates in 2021, a 29% rise in occupancy from 2020, and RevPAN rose about 17% across these 17 towns. In ascending order, these locales are ranked on each market’s rise in RevPAN from 2021 to 2022. [Read part 2 here!]
Let’s jump in, starting with the first 8 places on our list. All prices and percentages quoted below come from Beyond’s database and are for average nightly stays in a 2-bedroom rental.
17. Joshua Tree, California
Joshua Tree National Park is about a three-hour drive from San Diego, Los Angeles, and Las Vegas — an easy trek to an unforgettable, otherworldly landscape. Named after yucca species that fills the park and are not found anywhere else in the world, Joshua trees, the sprawling, majestic landscape draws millions of visitors every year.
Spiritual and outdoor enthusiasts migrate to the national park throughout the year. Occupancy remained at a stellar 62% in 2021. A 28% annual jump in price translated to a full 20% jump in RevPAN, for an average of $164. Not bad for the few little towns dotting a primarily empty countryside.
16. Atlanta, Georgia
Atlanta is known for its arts, food, music, museums, outdoors, and other cultural attractions with a side of Southern hospitality. Ever-expanding, Atlanta is always embracing transformation while maintaining its distinct history, keeping it one of the country’s more influential and welcoming cities.
Atlanta’s occupancy rates rose to 50% in 2021, a 32% jump from the previous year. Concurrent with that leap, RevPAN for Atlanta STR went from an average of $57 to $82, a 43% increase over the previous year.
15. Zion National Park, Utah
From multi-day hikes on the river bed to hikes up the rising heights of Angel’s Landing, Zion is a jaw-dropping jaunt through the American West. Sitting in Southern Utah near the town of Springdale, Zion is also one of the nation’s most popular national parks with approximately 4.5 million annual visitors. With 18% more people staying in STRs in the region in 2021, the park continues to expand, aiming to add a new visitor center and almost 25 miles of biking trails by the end of 2023.
With a RevPAN of $127, an enormous 45% bounce up from 2020 rates, it’s also a great time to invest in an Airbnb or vacation rental in one of Zion’s surrounding towns.
14. Sedona, Arizona
Next up, we find more red rocks and desert, this time in one of the more serene spots in the United States — Sedona, Arizona. This desert city is an arts center, hosting a number of traditional and contemporary galleries, boutiques, and specialty shops. More importantly for short-term rental investing, it’s also a hub for outdoor adventure tourism, serving as the jumping-off place for tours of the Red Rocks region, located right between Phoenix and the Grand Canyon’s South Rim.
STR occupancy in Sedona jumped to an almost unheard of 74% in 2021. Potential revenue per night also jumped by $50, an almost 50% surge in RevPAN to $156.
13. Florida Keys, Florida
From the desert we dive down to the tropics into the Florida Keys, the southernmost lands in the continental United States. Straddling the Atlantic Ocean and the Gulf of Mexico, the Keys can be grouped by a typical Caribbean beauty on the macro level: white sands, turquoise blue seas, and palm trees. Zoom in a bit, and each of the major destinations in the 120-mile archipelago offers its own charm and activities.
Surf, sand, and endless fun add up to excellent STR opportunities. Limited, in-demand land means higher rental prices especially as the pandemic’s opening has created enormous opportunity in the Keys. RevPAN rose from $176 in 2020 all the way to an average of $260 in potential revenue per available night, a 48% rise.
12. Big Sky, Montana
Home to downhill skiing in the winter, mountain biking in the summer, and Yellowstone National Park nearby, Big Sky is an outdoor enthusiast’s paradise.
Prices for an STR nightly stay are steadily rising in the area, jumping 29% to $302 on average. This translates to an unreal $187 in RevPAN in 2021, a 48% increase.
11. Charleston, South Carolina
Charleston is full of incredible dining, beaches and islands, fine arts, and a slower pace of life amidst palm trees, all swimming in a rich history. While life rushes by in other urban areas, horse-drawn carriages still make their way down Charleston’s cobblestone streets, European fashions are on display in the elegant French Quarter, and tourists stroll down the Battery boardwalk and Waterfront Park.
In 2021, Charleston boasted a 72% occupancy rate, which helped elevate the RevPAN to $148 (48% higher than 2020) for an STR in South Carolina’s gem on the coast.
10. Houston, Texas
Sitting in southeast Texas, Houston enjoys a warm climate with frequent rain and an incredible diversity of things to do. Houston is home to the Texas Medical Center (the world's largest concentration of healthcare and research institutions), NASA's Johnson Space Center, and petroleum companies like Phillips 66, Halliburton, and ExxonMobil. Just like any respectable Texas town, there’s always music to be had in Houston, from its own, distinct rap and R&B scene to its roots in classic country and blues. This tradition spills over to the culinary where classic Cajun cooking and some the best of its neighboring Tex Mex influence can be found any time of year. There are also over 145 languages spoken in H-town and more than 10,000 restaurants.
With such an international influx, Houston is known to be welcoming to its visitors. After extreme flash flooding in 2020, the city’s STR occupancy rate returned to a more normal 50% level in 2021. Even more encouraging to owners, RevPAN in Houston increased 50%. With ever-available real estate, Houston can be an inexpensive yet consistent market to move into for STR owners.
Up next, we’ll travel back out West before our tour of the top cities to invest in the U.S. takes us through the Midwest and back into the South again. Tune in for our next blog post to catch the top seven hottest markets in the country in which to establish your STR.
For a more detailed look at RevPAN or to compare your short-term rental against the market, check out our Insights tool today. It’s free for all property managers, owners, and hosts.