National, short-term rentals are generating an average of +39% more income annually than they did during pre-pandemic times.
Surging Traveler Demand for More Private, Larger Units
The short-term rental market, and all those who are invested in this market sector, can tip their collective hats to the COVID pandemic. Pre-pandemic, travelers were content to stay in hotel rooms for short get-a-way trips. Not any more. Travelers now want larger, more private units even when getting away for only a night or two.
The short-term rental market had its best year ever in 2021. As a whole, short-term rentals generated approximately $113B in annual revenues.
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Key:
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Challenges of Investing in Short-Term Rental Markets in 2022
Short-term rental investors will be challenged by two realities in 2022 regardless where they invest:
- Home prices nationwide increased +20% in 2021, according to Zilllow’s Home Value Index, and Zillow forecasts that home prices will increase another +16% in 2022.
- Housing inventory has hit a rock-bottom low. Finding an appropriate home for short-term rentals will be difficult in 2022 as all industry experts expect inventory levels to remain relatively flat this year.
Where to Invest in Short-Term Rental Market in 2022?
After analyzing 265 destination markets nationwide for short-term rental investment potential, AirDNA, a short-term rental analytics company, determined the top 25 markets for short-term rental potential.
AirDNA believes markets with the greatest potential for short-term rental investment will be concentrated in small and mid-sized cities. The AirDNA analysis stated, “…revenue potential of small city/rural areas in the US has risen +55% since the start of the pandemic, followed closely by mountain/lake destinations and mid-sized cities.
Snapshot of AirDNA’s Top Ten Markets for 2022 Short-Term Rental Investment
- Maui, Hawaii
– Investor score: 90.7
– Revenue potential of average full-time rental property – $101,590/year
– Annual occupancy rate – 72.8%
2. Kenai Peninsula, Alaska
– Investor score: 89.1
– Revenue potential – $44,124/year
– Annual occupancy rate — 67.3%
- Chattanooga TN
– Investor score: 87.9
– Revenue potential – $47,376/year
– Annual occupancy rate – 70.8%
- Gulfport/Biloxi, Mississippi
– Investor score: 87.9
– Revenue potential – $44,3022/year
– Annual occupancy rate – 63.9%
- Slidell Louisiana
– Investor score: 85.2
– Revenue potential – $68,690/year
– Annual occupancy rate – 61.6%
- Crystal River Florida
– Investor score: 83.4
– Revenue potential – $51,118/year
– Annual occupancy rate – 68.8%
- Joshua Tree California
Investor score: 81.5
– Revenue potential – $85,363/year
– Annual occupancy rate – 66.1%
- Charleston South Carolina
– Investor score: 81
– Revenue potential – $85,542/year
– Annual occupancy rate – 68%
- Galena Illinois
– Investor score: 79.7
– Revenue potential – $67.314/year
Annual occupancy rate – 60.6%
- Southwest Harbor Maine
– Investor score: 79.4
– Revenue potential – $72,772/year
– Annual occupancy rate – 76.1%
Are you ready to learn what your DISC personality style is? You know it’s critical that you understand what your natural personality style is. Once you have obtained this knowledge everything in your business and personal life will change for the better. Tim and Julie Harris are making it super simple for you to have this powerful info. Now, text the word YOU to 47372, and when you do you will instantly receive a special exclusive text link. Next, you will complete your own DISC personality test.. the results will be shared with you instantly once you complete the simple and fun test, no strings attached. Simply text the word YOU to 47372 and click the link.
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Thanks to AirDNA and Inman.
