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What are the Best Short-Term Rental Markets to Invest In 2025?
Short-Term Rentals Have Evolved — And That’s Good News for Investors
Gone are the days when short-term rental (STR) investing felt like the Wild West.
Today, the market is backed by robust data, established guest behaviors, and smarter investment strategies.
For investors, this shift means more predictable income streams — and easier access to financing your next property.
Using Real Data to Find the Right Markets
That’s why I teamed up with Host Financial, leveraging insights from AirDNA and Zillow, to spotlight five promising STR markets for 2025.
We focused on locations showing strong demand, healthy growth trends, and — most importantly — outstanding gross rental yields.
Gross Rental Yield Formula:
(Annual Revenue ÷ Median Home Price) × 100
For example:
- Median home price: $300,000
- Annual STR revenue: $45,000
- Gross Rental Yield = (45,000 ÷ 300,000) × 100 = 15%
A 15% yield indicates strong income relative to the purchase price — especially crucial when evaluating STR opportunities.
Even better, financing options like DSCR (Debt Service Coverage Ratio) loans from Host Financial can qualify you based on the property’s projected short-term income, not just long-term rental comps.
Ready to explore? Here are five high-performing STR markets to watch in 2025 — and how to finance them smartly.
- Shenandoah, Virginia
- Market Score: 94
- Annual Revenue: $42,000
- Average Daily Rate (ADR): $266.51
- Revenue Per Available Room (RevPAR): $128.94
- Median Home Price: $255,593
- Gross Yield: 16.4%
Why Shenandoah?
Surrounded by stunning natural beauty and close to Shenandoah National Park, this region boasts high revenue growth potential despite moderate occupancy rates. Affordable prices and strong seasonal demand make it a top choice for nature-focused rentals.
Financing Tip:
Host Financial can help you leverage STR-specific income projections to qualify — even when traditional rental comps are weak.
- Columbia, South Carolina
- Market Score: 98
- Annual Revenue: $33,900
- ADR: $201.50
- Occupancy: 57%
- Median Home Price: $232,153
- Gross Yield: 14.6%
Why Columbia?
A dynamic midsized city with a booming college, capital, and business scene, Columbia scores high on revenue growth and seasonality. Family-sized homes particularly shine here, catering to visiting groups and event travelers.
Financing Tip:
Focus on larger homes with multiple bedrooms and bold design. Host Financial’s loan products fit well with bigger properties that bring in larger group bookings.
- Poconos, Pennsylvania
- Market Score: 60
- Annual Revenue: $53,200
- ADR: $394.14
- RevPAR: $164.27
- Median Home Price: $246,669
- Gross Yield: 21.5%
Why the Poconos?
Think ski trips, family reunions, and weekend getaways. Homes with luxury amenities like hot tubs and game rooms command impressive nightly rates. Despite slightly lower occupancy, the RevPAR is one of the strongest nationally.
Financing Tip:
Host Financial offers jumbo DSCR loans ideal for high-income properties like these — particularly those generating $50K+ annually.
- Tulsa, Oklahoma
- Market Score: 99
- Annual Revenue: $28,300
- ADR: $173.92
- RevPAR: $95.42
- Median Home Price: $205,014
- Gross Yield: 13.8%
Why Tulsa?
Tulsa combines urban charm, cultural tourism, and affordable property prices. Occupancy rates and RevPAR have steadily risen, making it a strong value-play for investors willing to add smart marketing and stylish furnishings.
Financing Tip:
Tulsa is a dual-threat market. Host Financial can approve you based on either projected STR income (Airbnb model) or long-term rental comps — offering financing flexibility rare in today’s market.
- Destin, Florida
- Market Score: 91
- Annual Revenue: $72,200
- ADR: $395.52
- RevPAR: $245.60
- Median Home Price: $577,366
- Gross Yield: 12.5%
Why Destin?
This iconic Emerald Coast destination consistently delivers strong rental income, especially in the luxury tier. With annual revenue growth topping 11%, investors targeting higher-end guests continue to thrive here.
Financing Tip:
For a pricier market like Destin, Host Financial’s jumbo DSCR and second-home loans are your best bet. Early prequalification is key to winning competitive offers.
STR Financing: Why It Matters Who You Work With
Short-term rental lending isn’t one-size-fits-all. Different markets may require permits, STR income verification, or LLC ownership structures.
That’s why it’s essential to partner with lenders like Host Financial who specialize in vacation rentals.
With Host Financial, you can:
- Use STR projections instead of traditional LTR comps.
- Structure loans properly under LLCs or personal names as needed.
- Get fast prequalifications to move quickly in hot markets.
- Navigate local permit or zoning requirements with confidence.
How to Set Yourself Up for STR Success in 2025
Winning in today’s STR market means more than just picking the right house.
Key tips include:
- Get Prequalified Early: Use Host’s STR projection tools for stronger offers.
- Understand Local Regulations: Know local permit rules before you buy.
- Design for Guests: High ADRs come from memorable layouts, design, and amenities.
- Build a Local Team: Great cleaners, managers, and support staff drive guest satisfaction and return visits.
Final Takeaway
The short-term rental market has matured — and today’s investors have better tools, better data, and better financing options than ever before.
The five markets above combine strong rental yields, growth potential, and financing accessibility, making them top choices for building your STR portfolio in 2025.
With Host Financial’s DSCR loans based on projected STR income, the path to scaling your short-term rental business is clearer than ever.
Understand your market, stay disciplined, partner with the right lender — and watch your portfolio grow.
Ready to get started? Prequalify with Host Financial today and make your next STR deal your best one yet.
In the previous post: “Is Now a Better Time to Invest in Real Estate Debt or Equity?“
What are the Best Short-Term Rental Markets to Invest In 2025?
Has the U.S. Housing Market Finally Begun to Thaw After the Pandemic?
It seems like the housing market might be showing signs of life. According to a recent report from Redfin, pending home sales in early October have seen their largest year-over-year rise since 2021, with a 2% increase in the four weeks ending October 6.
This news is likely to be welcomed by real estate investors who have felt the market has offered limited opportunities over the past few years. However, it’s important to take a cautious approach—one promising statistic doesn’t necessarily indicate a broader trend.
Is the Housing Market Truly Recovering?
Let’s explore the different factors at play.
Interest Rate Reductions: A Critical Factor or a Red Herring?
The Redfin report links the surge in pending sales to the Federal Reserve’s much-anticipated rate cut announcement in mid-September. According to Redfin, this announcement prompted buyers to re-enter the market in late September, despite mortgage rates having already been falling for weeks before the cut.
This psychological boost is crucial. Although buyers were aware of the falling rates beforehand, many seemed to be waiting for a formal signal to act. This could be attributed to a lingering fixation on the ultra-low rates of 3% to 4% that buyers enjoyed before 2022.
Any rate cut announcement serves as a nudge for prospective buyers, making them feel that now might be the right time to purchase, even if mortgage rates had been decreasing already. In an unstable mortgage market, such announcements hold significant influence.
However, mortgage rates are just one piece of the puzzle when analyzing housing market performance. As noted by Investopedia, the real estate market is driven by four primary factors: interest rates, demographics, economic conditions, and government policies.
Demographics: Shaping the Market
During the pandemic, demographic shifts had a profound effect on U.S. real estate, with major population movements like the Sunbelt migration fueling booms in cities such as Phoenix and Austin, which later became unaffordable for many.
Age is another key demographic factor, and the millennial generation’s pent-up demand continues to be a driving force behind the rise in home purchases. Despite the challenges of the past few years, millennials who have longed to become homeowners are now entering the market in greater numbers, as more properties become available.
Rising Inventory: A Sign of Stabilization
A key factor contributing to the market’s stabilization is the growth of housing inventory over the last year. The pandemic had a significant impact on the availability of homes, with sellers hesitant to list properties due to COVID-19 restrictions and, later, higher mortgage rates.
Some homeowners, particularly those upgrading to larger homes, found it financially challenging to sell and take on higher mortgages. Others, however, simply chose to wait for a more favorable market.
Although the latest Realtor.com report shows that inventory remains down by 23.2% compared to pre-pandemic levels, we are seeing an upward trend. For instance, new listings have been rising since last year, with a 5.7% year-over-year increase for the four weeks ending October 6.
As of September 2024, some states have even surpassed their pre-pandemic inventory levels, including Tennessee, Texas, and Idaho, with others, like Washington, close behind.
Vulnerabilities in Certain Regions
However, not all regions are showing positive signs. For example, some areas, particularly those affected by extreme weather, have seen inventory spikes not because of market recovery, but due to homeowners trying to offload damaged properties they can’t afford to repair.
For instance, regions like Florida and North Carolina, hit by hurricanes, have experienced increases in home listings, but these may reflect a response to climate-related challenges rather than market health.
Opportunities for Investors
Investors should be discerning when choosing markets, focusing on regions where inventory is growing due to increased home construction rather than climate-related distress. States like Idaho, Utah, North Carolina, and Texas, which are building new homes, offer potential, though caution is needed in areas prone to natural disasters.
The Midwest and Northeast, meanwhile, still face significant challenges in recovering to normal market conditions. These regions have lower rates of new construction, meaning inventory remains scarce, which could present both opportunities and difficulties for investors.
The Bottom Line
The U.S. housing market is showing signs of recovery, but the situation remains complex and varies by region. Interest rates play an essential role in unlocking the market, but investors should also consider other critical factors, such as homebuilding trends, climate risks, and government policies. While the market is heading in the right direction, it’s crucial to examine regional differences carefully before making investment decisions.
In the previous post: “Is Now a Better Time to Invest in Real Estate Debt or Equity?“