Best Markets for Vacation Rentals in 2023

[Zach Edelman]

Hey guys -

Did a a research + writeup for best Vacation Rental markets and wanted to share it. Hope y'all enjoy:

Wilmington, NC

- Wilmington, North Carolina is a coastal city in North Carolina and a long-time vacation rental destination. Nestled on the Atlantic Ocean, it is known for its beaches and family-friendly attractions. However, Wilmington is not just a beach town. It has a population of approximately 115,000, making it one of the largest cities in the North Carolina.
- Vacation Rental Investors have a lot to like about Wilmington. While many investors target Outer Banks community beach homes in near by Surf City or North Topsail Beach, Wilmington is a strong alternative. The city is close to multiple beaches and has diversified options outside beach days. Many families that lease vacation rentals will want more than just a beach day. The historic sites and downtown areas of Wilmington will attract these families for variety.
- Additionally, while AirDNA shows an Occupancy Rate of just 60% as of September 2023, that doesn’t tell the whole story. Wilmington is home to the University of North Carolina Wilmington, sometimes known as UNCW, with approximately 17,500 students. Wilmington is a “Coast Guard City” with a sizable military presence. Finally, it is home to Screen Gems Studios, the largest US TV and Movie production facility outside California!

Park City, UT

- Park City, Utah, is a renowned vacation destination nestled in the heart of the picturesque Rocky Mountains. Situated against a backdrop of stunning mountain landscapes, it is celebrated for its world-class ski resorts and family-friendly attractions.

- Why is Park City a great vacation rental market? While famous for its skiing attractions, there are many additional demand drivers for visitors. Hiking and biking is popular in the summer months and Park City offers great options. The city was named a “Gold-Level Ride Center” by the International Mountain Bicycling Association in 2011! In addition, Park City is home to the Sundance Film Festival, a major festival attracting many visitors from the entertainment industry. Many willing to pay top dollar for vacation rental properties.

Annapolis, MD

- Annapolis, Maryland is the capital city of Maryland and an underrated market for vacation rentals. It sits on the beautiful Chesapeake Bay and is known as “America’s Sailing Capital.”
- As a waterfront city, many of the demand drivers for vacation rentals revolve around the bay. There are plentiful activities including sailing, paddleboarding, kayaking and breakwater adventures! While the spring and summer seasons are undoubtedly the business, there are plenty of events in the fall that attract tourists.
- Per AirDNA as of September 2023, the Occupancy Rate is a solid, but below average 63%. However, the other metrics are rock-solid. It projects vacation rental operators to earn an average of $5,250 per month in revenue (peaking in October) with a $418 average daily rate. The sub-65% occupancy rate may scare some lenders away for vacation rental loans. However, Annapolis appears to be a great market for short term rentals in 2023.

Stowe, VT

- Stowe, Vermont is a popular vacation area in New England. It features world-class ski resorts, including Stowe Mountain Resort and Smugglers’ Notch Resort. While those resorts bring in many visitors, there are plenty of vacationers that prefer Airbnb or vacation rental options, either for space or affordability.
- Beyond skiing, Stowe also offers a wide range of outdoor activities throughout the year. These include hiking, mountain biking, golfing, fishing, and kayaking in the warmer months. In addition to outdoor activities, Stowe hosts various events and festivals that bring in tourists. These include the Stowe Winter Carnival, Stowe Arts Festival and the Stowe Mountain Film Festival. Finally, Stowe is popular for weddings and other special events. The culinary scene, with nice restaurants and craft breweries, is also popular.

Southampton, NY

- Southampton, New York, is a small vacation town in The Hamptons on Long Island. This area of New York is famous for its seasonality, with AirDNA verifying this aspect of the market with just a 52% average annual occupancy rate for short term rentals as of September 2023. The Hamptons are known for attracting wealthy and high-paying visitors in the summer months. Often, these are high-earning professionals from nearby New York City that will pay high rates.
- Despite the low occupancy rate, vacation rental investors can still earn great returns in Southampton. Smart investors can maximize earnings through the summer even with lower returns in the winter months. There are numerous vacation demand drivers in the summer season. These include beach access, including Cooper’s Beach. Beyond the beach, there are world-class golf courses and other activities such as tennis and boating. Social events and parties such as the Southampton Hospital’s Annual Gala also bring in many visitors.

- Despite the low occupancy, AirDNA projects huge returns when Southampton vacation rental properties are booked. Annualized (even including off-season months), it projects an average monthly revenue of $9,875 per rental property. This includes an average daily rate over $1,000!