In recent years, the vacation rental market has exploded, with U.S. annual revenue expected to skyrocket to over $21 billion by 2028.

The Magic of Vacation Rental Investments: Top 10 Hotspots for 2024

Ara Ghanbarian

Hey there, future real estate moguls! If you've ever dreamed of turning a vacation home into a profit-making paradise, you’re in for a treat. In recent years, the vacation rental market has exploded, with U.S. annual revenue expected to skyrocket to over $21 billion by 2028. More and more travelers are ditching hotels for the cozy charm of vacation homes, making this a golden opportunity for savvy investors.

But where should you set your sights to get the best bang for your buck? Buckle up, because we’re about to take a tour of the top 10 best places to buy vacation rental property in 2024. Spoiler alert: some of these spots might surprise you!

What Makes a Top Vacation Rental Market?

Before we dive into the list, let’s talk about what makes these markets shine. It’s not just about picturesque views and tourist attractions—although those certainly help. According to AirDNA’s comprehensive report, the key factors include:

  • Rental Demand: How popular is the area with vacationers?
  • Revenue Growth: Is the potential income increasing?
  • Government Regulations: Are there any restrictions on short-term rentals
  • Investability: How profitable is the property relative to its price? This is where the cap rate comes into play.

Calculating Cap Rate: The Quick and Dirty Guide

For the uninitiated, the cap rate is a handy metric to gauge a property’s profitability.
It’s calculated by dividing the net operating income (NOI) by the current market value (CMV) of the property.

Here’s the formula:
Cap Rate = Net Operating Income (NOI) ÷ Current Market Value (CMV)

To find the NOI, subtract your operating expenses from your expected revenue.
Not sure about those expenses? Use the 50% Rule, which assumes they’ll be half your gross income. Easy peasy!

The Best Places to Buy Vacation Rental Property in 2024

Now, let's count down the top 10 hotspots, from 10 to 1, where your vacation rental investment could turn into a gold mine!

10. Fairbanks, Alaska

  • Cap Rate: 6.7%
  • Median Home Price: $239K
  • Occupancy Rate: 65%
  • Average Daily Rate (ADR): $225
  • Annual Revenue: $32K

    Fairbanks is a gem for those enchanted by the Northern Lights and Arctic adventures. With a strong occupancy rate and solid revenue potential, it’s a cool (pun intended) choice for investors.

    10. Fairbanks, Alaska Cap Rate: 6.7% Median Home Price: $239K Occupancy Rate: 65% Average Daily Rate (ADR): $225 Annual Revenue: $32K Fairbanks is a gem for those enchanted by the Northern Lights and Arctic adventures. With a strong occupancy rate and solid revenue potential, it’s a cool (pun intended) choice for investors.

    9. Akron, Ohio

    • Cap Rate: 9%
    • Median Home Price: $145K
    • Occupancy Rate: 57%
    • ADR: $199
    • Annual Revenue: $26K

      Akron offers a low median home price and strong cap rate, making it an appealing option. Its proximity to Cleveland and local attractions like the Akron Art Museum boost its charm.

      9. Akron, Ohio Cap Rate: 9% Median Home Price: $145K Occupancy Rate: 57% ADR: $199 Annual Revenue: $26K Akron offers a low median home price and strong cap rate, making it an appealing option. Its proximity to Cleveland and local attractions like the Akron Art Museum boost its charm.

      8. Port Angeles, Washington

      • Cap Rate: 6%
      • Median Home Price: $390K
      • Occupancy Rate: 64%
      • ADR: $289
      • Annual Revenue: $47K

        Nestled near Olympic National Park, Port Angeles is perfect for nature lovers.
        Its moderate home price and solid occupancy rate make it a smart pick.

        8. Port Angeles, Washington Cap Rate: 6% Median Home Price: $390K Occupancy Rate: 64% ADR: $289 Annual Revenue: $47K Nestled near Olympic National Park, Port Angeles is perfect for nature lovers. Its moderate home price and solid occupancy rate make it a smart pick.

        7. Stanton, Kentucky

        • Cap Rate: 14.7% (highest on the list!)
        • Median Home Price: $146K
        • Occupancy Rate: 56%
        • ADR: $236
        • Annual Revenue: $43K

          With the highest cap rate and lowest median home price, Stanton is a steal.
          Nearby natural wonders like the Red River Gorge attract a steady stream of visitors.

          7. Stanton, Kentucky Cap Rate: 14.7% (highest on the list!) Median Home Price: $146K Occupancy Rate: 56% ADR: $236 Annual Revenue: $43K With the highest cap rate and lowest median home price, Stanton is a steal. Nearby natural wonders like the Red River Gorge attract a steady stream of visitors.

          6. Winter Haven, Florida

          • Cap Rate: 5.9%
          • Median Home Price: $264K
          • Occupancy Rate: 62%
          • ADR: $206
          • Annual Revenue: $31K

            Winter Haven is an affordable slice of Florida paradise.
            Its family-friendly attractions, including LEGOLAND, keep occupancy rates healthy.

            6. Winter Haven, Florida Cap Rate: 5.9% Median Home Price: $264K Occupancy Rate: 62% ADR: $206 Annual Revenue: $31K Winter Haven is an affordable slice of Florida paradise. Its family-friendly attractions, including LEGOLAND, keep occupancy rates healthy.

            5. Sneads Ferry, North Carolina

            • Cap Rate: 6.4%
            • Median Home Price: $555K
            • Occupancy Rate: 63%
            • ADR: $461
            • Annual Revenue: $71K

              Sneads Ferry’s higher home prices are offset by impressive ADR and annual revenue.
              This coastal town is perfect for those looking to tap into a lucrative beachside market.

              5. Sneads Ferry, North Carolina Cap Rate: 6.4% Median Home Price: $555K Occupancy Rate: 63% ADR: $461 Annual Revenue: $71K Sneads Ferry’s higher home prices are offset by impressive ADR and annual revenue. This coastal town is perfect for those looking to tap into a lucrative beachside market.

              4. Spring Hill, Florida

              • Cap Rate: 5%
              • Median Home Price: $389K
              • Occupancy Rate: 62%
              • ADR: $251
              • Annual Revenue: $39K

                Spring Hill offers a nature-lover’s retreat with a strong occupancy rate, making it a worthwhile investment despite its lower cap rate.

                4. Spring Hill, Florida Cap Rate: 5% Median Home Price: $389K Occupancy Rate: 62% ADR: $251 Annual Revenue: $39K Spring Hill offers a nature-lover’s retreat with a strong occupancy rate, making it a worthwhile investment despite its lower cap rate.

                3. Logan, Ohio

                • Cap Rate: 12.2%
                • Median Home Price: $233K
                • Occupancy Rate: 57%
                • ADR: $343
                • Annual Revenue: $57K

                  Logan’s picturesque Hocking Hills and vibrant arts scene make it a hotspot.
                  Its impressive cap rate and revenue make it a top contender.

                  3. Logan, Ohio Cap Rate: 12.2% Median Home Price: $233K Occupancy Rate: 57% ADR: $343 Annual Revenue: $57K Logan’s picturesque Hocking Hills and vibrant arts scene make it a hotspot. Its impressive cap rate and revenue make it a top contender.

                  2. Ellsworth, Maine

                  • Cap Rate: 6.3%
                  • Median Home Price: $325K
                  • Occupancy Rate: 73% (highest on the list!)
                  • ADR: $335
                  • Annual Revenue: $41K

                    Ellsworth’s proximity to Acadia National Park ensures it stays booked.
                    With the highest occupancy rate, it’s a dream for consistent revenue.

                    2. Ellsworth, Maine Cap Rate: 6.3% Median Home Price: $325K Occupancy Rate: 73% (highest on the list!) ADR: $335 Annual Revenue: $41K Ellsworth’s proximity to Acadia National Park ensures it stays booked. With the highest occupancy rate, it’s a dream for consistent revenue.

                    1. Columbus, Georgia

                    • Cap Rate: 9%
                    • Median Home Price: $161K
                    • Occupancy Rate: 60%
                    • ADR: $178
                    • Annual Revenue: $29K

                      Columbus comes in at #1 on the list with a balanced mix of low home prices, strong cap rate, and healthy occupancy.
                      Its outdoor activities and historical sites draw nearly 2 million visitors annually.

                      1. Columbus, Georgia Cap Rate: 9% Median Home Price: $161K Occupancy Rate: 60% ADR: $178 Annual Revenue: $29K Columbus comes in at #1 on the list with a balanced mix of low home prices, strong cap rate, and healthy occupancy. Its outdoor activities and historical sites draw nearly 2 million visitors annually.
                      Key Takeaways High Potential Markets: These top 10 destinations are hotbeds for vacation rental investment, each offering unique benefits and solid returns. Cap Rates Matter: A higher cap rate can indicate better profitability but also higher risk. Balance is key! Local Attractions: Proximity to tourist spots boosts occupancy rates and revenue. Affordability: Don’t be scared off by higher home prices—sometimes, they’re paired with significantly higher returns.

                      Key Takeaways

                      • High Potential Markets: These top 10 destinations are hotbeds for vacation rental investment, each offering unique benefits and solid returns.
                      • Cap Rates Matter: A higher cap rate can indicate better profitability but also higher risk. Balance is key!
                      • Local Attractions: Proximity to tourist spots boosts occupancy rates and revenue.
                      • Affordability: Don’t be scared off by higher home prices—sometimes, they’re paired with significantly higher returns.

                      So, are you ready to dive into the vacation rental market? These hotspots are waiting to turn your investment dreams into reality.


                      For more information on SHORT TERM RENTAL services catered specifically for Real Estate Professionals, reach out to the experts at www.RealEstateDr.Store Today!

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