They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

@Eli Fazzo, Almost every location is going to have some surprises that you just have to factor in when looking at investing in real estate. 

Firstly, it often generates higher rental income compared to long-term leases, particularly in desirable locations or during peak seasons.

I've narrowed down the best return for my money in this market to a 2 bed/2 bath (with top tier amenities) - about 500 total 2/2 listings.I'm finding myself a bit stuck when analyzing why certain properties are making so much higher than the average listings when they seem to have very similar locations, amenities, style, flow of home, beds/# of people they sleep, reviews, number of reviews, etc.

While they offer great general advice, they can't speak to our market, or the potential of a property located in Scottsdale can provide if held. 

I'm located in Daytona Beach, FL.

Given the property is located in the Poconos and the property is vacant more regularly as an STR there are proactive measures  you should  be taking such as making sure there are heating sources so that the plumbing does not freeze and ensuring there are no blocks in the plumbing lines with routine checks.

Continuing on the north coast, another idyllic vacation rental location is Pacific City Oregon.

Great Location.

What is drawing you to that specific location?