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Move over Jackson Hole. Investors looking for hot spots to buy their next money-making short-term rentals now have a better market to consider.
Provo, Utah, a town of 114,000 about 45 miles south of Salt Lake City, was named the highest-grossing market for investors who own short-term rental cabins, according to an analysis by short-term rental data provider AirDNA shared first with Inman.
Investors can expect to earn up to $110,595 a year renting out cabins on a short-term rental platform, be it market leader Airbnb or one of its competitors. Given homes in the market cost $536,789, investors can earn a 20.6 percent yield by charging travelers to stay in their cabins on a short-term basis in Provo.
The report shows AirDNA’s analysis of the potential earnings for short-term rental investors with cabins, urban apartments and large beach homes.
The company said its new Ranked by AirDNA reports guide investors toward markets and housing types that have the highest potential return on investment.
The company relied on the Airbnb categories as a guide for its new Ranked series, said Dillon DuBois, director of enterprise marketing for AirDNA. “We just handpicked three of the most popular” to start.
Airbnb began giving travelers the ability to search for places to stay in new ways last year. That included the introduction of categories that let users search for homes near vineyards, homes in tropical locations, near national parks and much more.
It was in line with Airbnb’s ongoing focus on encouraging travelers to book nights in areas that have supply, as constrained supply effectively caps the company’s ability to make more money through nights booked.
Along with being a helpful filter for travelers, the changes offered new data sets for investors considering where to buy their next short-term rental.
The company said it planned to continue offering publicly available reports called Ranked by AirDNA moving forward, in addition to features that are exclusive to subscribers to its platform.
In one case, investors could expect to earn as much as 42 percent yield on their investment after accounting for occupancy, average daily rates, home values and other metrics.
Here are the highest grossing markets in the most popular categories on Airbnb, according to AirDNA.
Cabins
AirDNA filtered for cabins with one to five bedrooms (and excluded six-plus), that had at least one guest review and that a minimum 4.5 average rating. The company also filtered for markets with at least 50 listings.
- Average daily rate: $636
- Annual revenue potential: $110,595
- Home values: $536,789
- Potential yield: 20.6 percent
Jackson Hole, Wyoming
- Average daily rate: $538
- Annual revenue potential: $92,089
- Home values: $828,292
- Potential yield: 11.1 percent
Bozeman, Montana
- Average daily rate: $445
- Annual revenue potential: $89,196
- Home values: $803,967
- Potential yield: 11.1 percent
Breckenridge, Colorado
- Average daily rate: $421
- Annual revenue potential: $87,534
- Home values: $1.35 million
- Potential yield: 6.5 percent
Lake Tahoe, California
- Average daily rate: $451
- Annual revenue potential: $84,461
- Home values: $1.16 million
- Potential yield: 7.3 percent
Urban apartments
For this list, AirDNA filtered for apartments with one to two bedrooms (including studio units), at least one guest review, and a minimum 4.5 average rating. It also only considered mid-sized city, large urban and large suburban properties in markets with at least 50 listings.
Savannah, Georgia
- Average daily rate: $232
- Annual revenue potential: $53,803
- Home values: $306,422
- Potential yield: 17.6 percent
Portland, Maine
- Average daily rate: $254
- Annual revenue potential: $53,282
- Home values: $432,227
- Potential yield: 12.3 percent
Charleston, South Carolina
- Average daily rate: $254
- Annual revenue potential: $49,900
- Home values: $401,811
- Potential yield: 12.4 percent
Nashville, Tennessee
- Average daily rate: $240
- Annual revenue potential: $46,595
- Home values: $408,597
- Potential yield: 11.4 percent
San Luis Obispo, California
- Average daily rate: $264
- Annual revenue potential: $45,738
- Home values: $617,472
- Potential yield: 7.4 percent
Large beach homes
For this list, AirDNA filtered for homes and villas with at least one guest review and a minimum 4.5 average rating. It also filtered for destination/resort and coastal markets with at least 50 listings.
Santa Barbara, California
- Average daily rate: $1,224
- Annual revenue potential: $261,115
- Home values: $2.8 million
- Potential yield: $9.3 percent
Los Angeles
- Average daily rate: $1,269
- Annual revenue potential: $231,421
- Home values: $3.8 million
- Potential yield: 6 percent
Miami
- Average daily rate: $1,683
- Annual revenue potential: $226,262
- Home values: $3.75 million
- Potential yield: 6 percent
Key West, Florida
- Average daily rate: $939
- Annual revenue potential: $225,223
- Home values: $1.59 million
- Potential yield: 14.1 percent
Destin/Fort Walton Beach, Florida
- Average daily rate: $987
- Annual revenue potential: $215,381
- Home values: $1.37 million
- Potential yield: 15.7 percent
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