When investing in a vacation rental property, the old adage about real estate is true: location, location, location! Where you buy your investment property or start your Airbnb rental arbitrage business can make all the difference in the success and potential revenue generated from your vacation rental. Plus, you want to ensure that your rental is not located in a market with over-saturation issues. How then, do you determine the most profitable places for a short-term rental in the U.S.?

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This post is so 2023! Looking for updated information about the hottest short-term rental markets? Take a look at our latest 2024 list here.

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At Beyond, we rely on data to drive our decisions. Our unparalleled access to and analysis of real-time, global short-term rental data powers our ability to unlock, inform, and automate action. In this case, we can look to revenue per available night (RevPAN) and occupancy rates to determine the best short-term rental markets that might make a good investment.

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In this blog post, we’ll use our extensive database full of vacation rental market data and insights to identify the top eight surging United States markets to invest in. On average, these markets had a 71% occupancy rate and an average RevPAN of $255 in 2022. In ascending order, these locales are ranked on each market’s RevPAN from 2022. All prices and percentages quoted below come from Beyond’s database and are for average nightly stays in a 2-bedroom rental. Note that while occupancy and RevPAN rates for these markets are stellar, taking the average purchase price into consideration is important in your decision to invest – unless you plan on starting a rental arbitrage business.

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Block Island, R.I

2022 Average RevPAN: $423

2022 Average Occupancy: 80%

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Block Island, Rhode Island is first up on our list. With an impressive $423 RevPAN and an outstanding average occupancy rate of 80% during 2022, Block Island might be one of the best places to buy an investment property.

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Block Island is a beautiful destination for tourists looking to get away from the hustle and bustle of everyday life. The island boasts stunning beaches, breathtaking views of the Atlantic Ocean, and plenty of activities to keep visitors entertained. From kayaking on the Great Salt Pond to exploring Mohegan Bluffs or simply soaking up some sun on Crescent Beach, there’s something for everyone in Block Island.

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The Hawaiian Islands

2022 Average RevPAN in Maui: $348, and Kauai: $288

2022 Average Occupancy in Maui: 84%, and Kauai: 77%

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Second up on our list is the Hawaiian islands. Maui and Kauai stood out with their impressive occupancy rates and average RevPAN, but most vacation rental markets on the Hawaiian Islands are good bets. 

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The Hawaiian islands are a paradise for tourists looking to experience the ultimate tropical getaway. With its stunning beaches, lush rainforests, and vibrant culture, Hawaii is one of the most popular destinations in the world. Visitors can take part in an array of activities such as snorkeling with sea turtles off Waikiki Beach or exploring the many hidden waterfalls of Maui's Hana Highway. From relaxing on a beach all day to hiking up volcanoes, there’s something for everyone in this beautiful archipelago. 

Nantucket, MA

2022 Average RevPAN: $281

2022 Average Occupancy: 59%

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Nantucket, Massachusetts is a popular tourist destination for people looking to get away from it all and enjoy some peace and quiet.  The stellar occupancy rates and average RevPAN make this a great market to invest in a short-term rental property.

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Located off the coast of Cape Cod, Nantucket is known for its stunning beaches, vibrant wildlife, and historic sites. Visitors can explore lighthouses like Brant Point or take a tour of the island’s many whaling museums. For those seeking adventure, there are plenty of activities such as kayaking on Madaket Harbor or biking along miles of scenic trails. Whether you’re looking for a relaxing weekend retreat or an action-packed vacation filled with exploration, Nantucket has something for everyone!

Santa Barbara, CA

2022 Average RevPAN: $277

2022 Average Occupancy: 69%

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Whether you’re looking for relaxation or exploration, Santa Barbara has it all. With impressive occupancy rates and a high average RevPAN, it’s a great time to buy an Airbnb or investment property here.

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With its stunning beaches, lush mountainscapes, and vibrant culture, Santa Barbara has something for everyone. Visitors can explore Stearns Wharf or take a kayak tour around the harbor. For those seeking adventure, there are plenty of activities such as hiking up Gaviota Peak or biking along miles of scenic trails. 

Austin, TX

2022 Average RevPAN: $229

2022 Average Occupancy: 63%

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Austin is a popular tourist destination for people looking to experience the city's vibrant culture and outdoor activities. We added this city to our list due to its average RevPAN of more than $200 coupled with a high average occupancy rate.

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With its bustling downtown area, thriving music scene, and endless outdoor adventures, Austin has something for everyone. Visitors can explore iconic landmarks like the State Capitol or take a kayak tour of Lady Bird Lake. For those seeking adventure, there are plenty of activities such as biking along miles of scenic trails or taking in an amazing view from Mount Bonnell. Whether you’re looking for relaxation or exploration, Austin has it all!

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Portland, Maine

2022 Average RevPAN: $172

2022 Average Occupancy: 70%

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Portland, Maine is an ideal destination for tourists looking to experience the best of New England. A stellar occupancy rate combined with a $172 average RevPAN makes this a good bet for adding for starting your Airbnb business.

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With its charming cobblestone streets, bustling waterfront district, and vibrant culture, Portland has something for everyone. Visitors can explore iconic landmarks like the Old Port or take a kayak tour around Casco Bay. For those seeking adventure, there are plenty of activities such as biking along miles of scenic trails in Deering Oaks Park or exploring historic lighthouses like Ram Island Ledge Light.

South Bay, CA

2022 Average RevPAN: $150

2022 Average Occupancy: 70%

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The South Bay region of California is an ideal destination for tourists looking to experience the perfect mix of sun, sand, and sea, and we were impressed with its average occupancy rate of 70% and high average RevPAN.

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Located in the southern coastal region of Los Angeles County, visitors can explore stunning beaches from Manhattan Beach to Hermosa Beach or take a kayak tour around King Harbor. For those seeking adventure, there are plenty of activities such as hiking up Palos Verdes Hills or biking along miles of scenic trails.

Washington, D.C.

2022 Average RevPAN: $130

2022 Average Occupancy: 65%

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Last up on our list is Washington, DC. This market is a popular tourist destination for those looking to experience the nation’s history and culture. With its iconic monuments and landmarks like the White House or Capitol Building, visitors can explore the city's vibrant past. For those seeking adventure, there are plenty of activities such as biking along miles of scenic trails in Rock Creek Park or kayaking on the Potomac River. 

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After you’ve decided where to invest for your short-term rental property, make sure to check on the  local laws around operating a vacation rental in your market. And make sure that you are automating data-driven functions, like revenue management, to truly maximize you potential revenue and save time with Beyond.

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Ready to see how Beyond can grow your business? Get $5k in free bookings when you sign up today!