2017 Report

The 125 Best Places to Buy a Vacation Rental Property in 2017

Best Places to
Buy in 2017

  1. Nashville, TN
  2. Destin, FL
  3. Corpus Christi, TX
  4. Denver, CO
  5. Clearwater Beach, FL
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Welcome to Rented.com’s 2017 Short-Term Rental Income Report

At Rented.com, one of the most frequent questions we hear is: “Where should I buy a vacation home or Airbnb?”

It’s not an easy question to answer. Finding the right location to buy a home can be a tremendous challenge. Having the right facts and figures at your fingertips, though, can go a long way toward helping you find a property that will prove to be a profitable real estate investment.

That’s why we started compiling an annual short-term rental income report. Our first report in 2016 analyzed the 120 best places to buy a vacation home based on several factors, including costs of homeownership. It uncovered a number of hot destinations, such as Panama City Beach, FL, Gatlinburg, TN, and Lake Tahoe, CA, and helped thousands of potential homeowners narrow their search for the best rental market. It was also extremely well-received, earning coverage from Inmanlocal news stations, and hundreds of real estate and vacation rental blogs.

Of course, rental market conditions can change from year to year, so we decided to make our rental income report an annual event. We’re proud to release our 2017 report, which shows the overall top five markets this year as:

  1. Nashville, TN
  2. Destin, FL
  3. Corpus Christi, TX
  4. Denver, CO
  5. Clearwater Beach, FL

Notably, we have seen major shifts in the top 10 best places to buy a vacation rental when considering return on investment (ROI) as the primary factor. Comparing 2017’s report to the 2016 report, you’ll find that just two of 2016’s top 10 locations remain in the top 10 for 2017. We have observed a major shift toward more urban markets, such as Nashville, Denver, and Atlanta.

In making note of this trend, our 2017 Short-Term Rental Income Report was expanded to cover more than just the top 120 best locations for buying a vacation home. For this year’s report we have expanded the list to 125, and broken down the data to identify the top 75 traditional vacation rental locations and the top 50 urban Airbnb markets.

How Was the Short-Term Rental Income Report Compiled?

If you do a quick web search, you’ll likely find other reports that cover the top vacation rental and short-term rental markets by measuring factors like consumer demand, expected gross rental revenue, and the number of vacation home sales.

But we don’t feel that provides a complete picture from an investor’s perspective.

So when we designed our rental income report, rather than rank top Airbnb markets by one of these singular factors, we set out to answer the ultimate question, “When buying a rental property for investment purposes, what are the best markets?” by looking at a broad range of factors.

Just like we did in 2016, we sought to answer this question for potential investors in 2017 by looking at the short-term rental market in a number of locations across the nation. We identified the most profitable destinations based on factors that ultimately impact a property owner’s ROI. We found numerous key points to be indicative of the overall profitability of a short-term rental. These factors include:

  • Real estate prices
  • Local vacation rental rates
  • Insurance, taxes, and maintenance costs
  • The overall popularity of the tourist destination

Average annual vacation rental ROI

We examined the historic and predicted Airbnb occupancy and short-term rental rates using Airdna, and compared gross rental income to local costs of homeownership. Our report also considers local short-term rental regulations, as these rules and requirements can have a major impact on a vacation homeowner’s bottom line.

Based on all of these factors, each destination was given a score out of 100, with the goal being to be able to objectively provide soon-to-be vacation homeowners the information you need to choose the right tourism destination for your investment.

Below, you’ll find the 125 best places to invest in a short-term rental overall, along with the top urban Airbnb investment locations and the top traditional vacation home rental markets.

Analyzing the 2017 Short-Term Rental Income Report Results

With one in three U.S. travelers already having stayed in private accommodation, “alternative” accommodation is going mainstream.

Airbnb has seen exponential growth in recent years, spurring a massive jump in the overall interest level surrounding the vacation rental marketplace. While bed and breakfasts and other “cottage industry” accommodations have been thriving for many generations, only recently have we seen such a tremendous jump in demand due to Airbnb’s ability to spread awareness of the benefits and widespread availability of “alternative accommodations.”

The first few weeks of 2017 saw nearly 160 million new Airbnb “guest arrivals” at some of its more than 3 million properties, located in 191 nations. According to Airbnb, late 2016 was seeing new guests at a rate of 1.4 million per week. And these figures have only been accelerating, which means that your vacation home holds the potential to be more profitable now than ever before.

In fact, short-term rental data reveals that vacation rental homes can bring a significant ROI even if they’re located outside of the two traditional vacation home market sectors – beach destinations and skiing/winter sports destinations.

Today, “bleisure” travel (travelers adding leisure days to their business trips) is more commonplace, and many of the locations that are fast-growing in terms of popularity are situated in more urban environments. Our report reflects this trend, as we have found that urban markets are quickly rising to the top in terms of the potential for a strong short-term rental ROI.

Top Urban Airbnb Markets

DENVER Colorado
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These cities share a few commonalities: They each have a thriving business sector, which is consistent with the rise of “bleisure” travel. These cities also have some very unique and distinctive tourist attractions. In all, they feature a strong balance for travelers who are visiting for both business and vacation.

The rise of Airbnb is likewise changing traditional vacation rental demand. In 2012, urban destinations made up only 12% of short-term rental stays; however that percentage has since risen to 34% of total stays. Airbnb’s users are likewise heavily driving the trend, as 55% of Airbnb stays were in urban destinations last year.

Meanwhile, the vacation home market also saw a shift, with three Florida locations making the top five vacation home markets:

Florida has a strong tourism market, with some areas of the state seeing record-breaking numbers of tourists year after year. These strong tourism numbers combined with elevated awareness of alternative accommodations that has resulted from the popularity of service providers such as Airbnb has resulted in many Florida locations being smart investment markets. In fact, a recent poll revealed that 93% of Floridians were in favor of maintaining laws that would allow homeowners to rent their homes to vacationers.

We’re Here to Help

When you’re ready to acquire a vacation rental property, we’re here to help you with everything from making investment decisions to finding a property manager. Be sure to check out Rented.com’s income calculator and rental grader to get a better idea of what you can expect to make from your second home.

We know there’s a lot to consider when investing in a vacation rental property, and we hope our annual Short-Term Rental Report is a valuable resource in helping you start that process.


The Rented.com Team

Best Performing

As measured by ROI

NASHVILLE Tennessee 94.9
DESTIN Florida 93.7
DENVER Colorado 89.7

Worst Performing

As measured by ROI

PALO ALTO California 8.4
SUN VALLEY Idaho 9.3
TELLURIDE Colorado 9.7
NANTUCKET Massachusetts 10.8
SAN FRANCISCO California 13.6

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