ROI Under the Sun: Unveiling the Best Cities for Short-Term Rental Investments
The short-term rental market is booming, but where can investors find the best returns? This data-driven analysis dives into key metrics like Average Daily Rate (ADR), occupancy rates, and estimated ROI to identify the most promising cities for short-term lodging investments.
Understanding Key Metrics
Before we dive into specific cities, let's define the key metrics we'll be using:
- Average Daily Rate (ADR): The average rental income earned for an occupied room in a given day.
- Occupancy Rate: The percentage of available rooms that are occupied during a specific period.
- Estimated ROI: The estimated return on investment, reflecting the profitability of a short-term rental property.
Top Cities for Short-Term Rental ROI
Based on our analysis, several cities stand out as top contenders for short-term rental investments. Let's take a closer look at their performance:
San Antonio, NC: A High-ROI Haven
San Antonio, NC, leads the pack with an impressive estimated ROI of 17.12%. This high return is supported by a strong occupancy rate of 85% and an ADR of $349. With 817 total listings, San Antonio presents a robust market for investors.
Phoenix, AZ: Soaring Returns in the Desert
Phoenix, AZ, also presents a compelling investment opportunity with an estimated ROI of 19.31%. While its occupancy rate is 66%, the ADR is a solid $290. The city has 318 total listings, indicating a competitive but potentially lucrative market.
Denver, TX: A Rocky Mountain Gem
Denver, TX, offers an attractive estimated ROI of 16.45%. The city's ADR is $145, and the occupancy rate is 61%. With 795 total listings, Denver provides a diverse range of investment options.
Charlotte, AZ: An Emerging Market
Charlotte, AZ, boasts an impressive estimated ROI of 18.73%. The ADR is relatively low at $100, but the occupancy rate is a respectable 66%. The city has 327 total listings, suggesting a growing market with potential for future appreciation.
Miami, CA: Coastal Charm and Solid Returns
Miami, CA, offers an estimated ROI of 12.74%. The ADR is $240, and the occupancy rate is 65%. With only 74 total listings, Miami presents a more exclusive market with potentially higher barriers to entry.
Comparing Cities: ADR and Occupancy
Let's compare the ADR and occupancy rates across several key cities:
- Atlanta, OR: ADR of $318 and occupancy of 62%.
- Houston, AZ: ADR of $183 and occupancy of 86%.
- Austin, TX: ADR of $319 and occupancy of 73%.
- Seattle, AZ: ADR of $258 and occupancy of 61%.
- Raleigh, GA: ADR of $347 and occupancy of 71%.
As you can see, there's significant variation in ADR and occupancy rates across different cities. Investors should carefully consider these factors when evaluating potential investment opportunities.
Data Table: City-Specific Metrics
| City |
State |
ADR |
Occupancy |
Estimated ROI |
| Atlanta |
CO |
$373 |
82% |
8.57% |
| Houston |
AZ |
$183 |
86% |
12.52% |
| Austin |
TX |
$319 |
73% |
10.68% |
| Phoenix |
WA |
$368 |
89% |
6.86% |
| Seattle |
AZ |
$258 |
61% |
10.57% |
| Austin |
GA |
$384 |
73% |
7.38% |
| Charlotte |
FL |
$358 |
61% |
6.93% |
| Miami |
CA |
$240 |
65% |
12.74% |
| San Antonio |
NC |
$349 |
85% |
17.12% |
Exploratory Data Insights
Further analysis reveals additional insights into promising markets:
- San Antonio, AZ, showcases an ADR of $191 with an occupancy rate of 67%, resulting in an estimated ROI of 12.86%.
- Denver, TX, has an ADR of $145 and an occupancy rate of 61%, leading to an estimated ROI of 16.45%.
- Charlotte, AZ, presents an ADR of $100 and an occupancy rate of 66%, yielding an estimated ROI of 18.73%.
Conclusion
Investing in short-term rentals requires careful consideration of various factors, including ADR, occupancy rates, and estimated ROI. Cities like San Antonio, NC, Phoenix, AZ, and Denver, TX, offer compelling investment opportunities based on their strong performance in these key metrics. However, investors should conduct thorough due diligence and consider their individual investment goals before making any decisions.
