The short-term rental (STR) market has grown exponentially over the last decade, with platforms like Airbnb and Vrbo transforming how travelers book accommodations. Virginia, with its rich history, scenic beauty, and diverse attractions, presents a lucrative opportunity for real estate investors looking to enter the STR space. From the bustling urban centers of Northern Virginia to the serene coastal retreats in Virginia Beach, the state offers a variety of investment opportunities. This guide explores why Virginia is an ideal location for short-term rentals, key factors to consider, and how to maximize profitability in this competitive market.
Why Invest in Short-Term Rentals in Virginia?
1. Booming Tourism Industry
Virginia is a prime tourist destination, attracting millions of visitors annually. According to the Virginia Tourism Corporation, the state generated over $26 billion in tourism revenue in recent years, making it a thriving hotspot for short-term rentals. The state's historical significance, from Colonial Williamsburg to Civil War battlefields, brings in history enthusiasts year-round. Additionally, natural attractions like Shenandoah National Park, the Blue Ridge Mountains, and the picturesque coastline of Virginia Beach draw outdoor lovers and vacationers.
Tourists are increasingly choosing short-term rentals over traditional hotels due to their affordability, personalized experience, and unique accommodations. The diverse travel demand ensures that well-located short-term rental properties remain booked throughout the year, providing a consistent revenue stream for investors.
2. Diverse Market Appeal
Virginia caters to various types of travelers, making it a versatile market for STR investors. Families visiting historical sites, business professionals traveling to Washington, D.C., military personnel near bases like Norfolk Naval Station, and college students' families visiting universities such as the University of Virginia and Virginia Tech all create a broad demand base.
The versatility of Virginia’s market allows investors to diversify their property portfolios. For example, an investor might own a luxury beachfront rental in Virginia Beach while also managing a cozy cabin in the Shenandoah Valley, both catering to different traveler demographics. This diversification mitigates risks associated with market downturns in specific areas and enhances overall profitability.
3. Profitable Seasonal Demand
Virginia’s diverse geography ensures year-round travel demand. The summer months see an influx of vacationers heading to Virginia Beach, the Outer Banks, and other coastal destinations, driving high rental occupancy rates. Fall attracts leaf-peeping tourists to the Blue Ridge Parkway, while winter brings ski enthusiasts to Massanutten and Wintergreen Resorts. Additionally, spring brings an influx of visitors to Washington, D.C.'s famous cherry blossoms, as well as the scenic countryside of Virginia.
For investors, this means that properties can generate revenue throughout the year without suffering from long off-season vacancies. Proper pricing strategies and seasonal adjustments can help maximize revenue, making Virginia an attractive location for STR investments.
Best Locations for Short-Term Rentals in Virginia
1. Virginia Beach
Virginia Beach is a premier tourist destination, attracting millions of visitors each year. With its miles of sandy beaches, boardwalk attractions, and vibrant nightlife, it’s no surprise that short-term rentals perform exceptionally well in this area.
Investors can capitalize on high summer demand by offering beachfront properties or vacation homes near major attractions like the Virginia Aquarium, Ocean Breeze Waterpark, and First Landing State Park. Properties with ocean views or easy beach access typically command higher nightly rates. However, Virginia Beach has strict short-term rental regulations, so investors must stay compliant with zoning laws, licensing requirements, and occupancy restrictions to avoid penalties.
Key Data:
Average Daily Rate (ADR): $250
Annual Revenue Potential: $55,000
Popular Attractions: Virginia Beach Boardwalk, First Landing State Park, Virginia Aquarium
2. Shenandoah Valley
For investors looking for a quieter, nature-focused market, Shenandoah Valley is an excellent choice. The region is known for its stunning mountain views, wineries, and outdoor recreational opportunities, making it a prime location for vacation rentals.
Cabins and cottages are particularly popular in this area, attracting travelers who want to escape the city and immerse themselves in nature. Hiking, wine-tasting, and visiting Luray Caverns are major draws. Investors who offer cozy, well-furnished cabins with amenities such as hot tubs, fire pits, and panoramic views can charge premium rates, particularly in the fall when tourists flock to the area for foliage season.
Key Data:
Average Daily Rate (ADR): $200
Annual Revenue Potential: $45,000
Popular Attractions: Skyline Drive, Luray Caverns, Shenandoah National Park
3. Richmond
As the capital of Virginia, Richmond offers a mix of business and leisure travel. The city’s rich history, thriving food scene, and cultural attractions make it a great location for short-term rentals. Popular areas for investment include The Fan District, Shockoe Bottom, and Scott’s Addition.
Richmond’s central location also makes it a convenient stop for travelers exploring the state. Business professionals, government workers, and tourists visiting the historic districts all contribute to strong occupancy rates. Investors should focus on stylish, well-located properties that appeal to both business and leisure travelers.
Key Data:
Average Daily Rate (ADR): $180
Annual Revenue Potential: $48,000
Popular Attractions: The Fan District, Shockoe Bottom, Virginia Museum of Fine Arts
4. Charlottesville
Home to the University of Virginia and a thriving wine country, Charlottesville is a strong short-term rental market. The influx of students’ families, wine tourists, and history enthusiasts creates consistent demand throughout the year.
Investors can benefit from properties near the university, downtown Charlottesville, or scenic vineyards. Luxury vacation homes and boutique-style rentals often perform well in this region, particularly those that offer unique experiences such as vineyard views or historic architecture.
Key Data:
Average Daily Rate (ADR): $220
Annual Revenue Potential: $50,000
Popular Attractions: University of Virginia, Monticello, Downtown Mall
5. Williamsburg
Williamsburg is a top destination for history buffs, attracting millions of visitors each year. The area's blend of historical sites and family-friendly attractions like Busch Gardens makes it a profitable STR market.
Investors who offer well-furnished, family-friendly homes with easy access to historical sites and theme parks can achieve high occupancy rates. Properties with colonial-style charm tend to be particularly appealing in this market.
Key Data:
Average Daily Rate (ADR): $210
Annual Revenue Potential: $52,000
Popular Attractions: Colonial Williamsburg, Busch Gardens, Jamestown Settlement
6. Alexandria
Alexandria, located just minutes from Washington, D.C., is a prime market for STR investors. The city’s historic Old Town, cobblestone streets, and waterfront dining make it a major draw for tourists. Additionally, Alexandria benefits from a steady stream of business travelers working in D.C. but looking for more affordable and charming accommodations. Many government officials, lobbyists, and corporate professionals prefer short-term rentals over hotels for extended stays. The demand for STRs remains high year-round, especially for well-furnished properties with modern amenities. Investors should consider listing their properties on both Airbnb and platforms like Furnished Finder to attract business travelers and long-term guests.
Key Data:
Average Daily Rate (ADR): $180 – $300
Occupancy Rate: 70% – 85%
Peak Season: Year-round with summer and fall peaks
Popular Attractions: Old Town Alexandria, Torpedo Factory Art Center, George Washington’s Mount Vernon, Waterfront Park
7. Roanoke
Roanoke, often referred to as the “Star City of the South,” is an ideal location for investors targeting adventure-seeking travelers and nature lovers. Nestled in the scenic Blue Ridge Mountains, the city attracts outdoor enthusiasts who visit for hiking, mountain biking, and exploring the Blue Ridge Parkway. Roanoke’s vibrant arts scene, craft breweries, and cultural events also make it a desirable destination. The demand for short-term rentals is particularly high in the fall, when leaf-peeping tourists flood the area. Investors can maximize their revenue by offering rustic cabins, eco-friendly lodges, and pet-friendly accommodations to cater to the growing demand for experiential travel.
Key Data:
Average Daily Rate (ADR): $140 – $220
Occupancy Rate: 60% – 75%
Peak Season: Fall (leaf-peeping season) and summer
Popular Attractions: Blue Ridge Parkway, Mill Mountain Star, Taubman Museum of Art, Roanoke Rail Walk
8. Fredericksburg
Fredericksburg is a charming city known for its rich Civil War history, colonial architecture, and vibrant downtown filled with boutique shops, restaurants, and antique stores. It serves as a halfway point between Washington, D.C., and Richmond, making it a convenient stop for road trippers and weekend travelers. The city attracts history buffs visiting its well-preserved battlefields, as well as wine enthusiasts exploring its surrounding vineyards. Additionally, Fredericksburg’s picturesque Rappahannock River offers kayaking and scenic outdoor experiences, making it a well-rounded destination. Investors should consider properties within walking distance of downtown, as well as those that offer historic charm with modern conveniences.
Key Data:
Average Daily Rate (ADR): $130 – $200
Occupancy Rate: 60% – 75%
Peak Season: Spring and Fall
Popular Attractions: Fredericksburg & Spotsylvania National Military Park, Chatham Manor, Rappahannock River, Hugh Mercer Apothecary
9. Harrisonburg
Harrisonburg is a thriving college town, home to James Madison University (JMU), which brings a steady influx of visitors throughout the year. Parents visiting students, alumni attending events, and prospective students on campus tours drive consistent demand for short-term rentals. Beyond the university, Harrisonburg has a strong tourism appeal due to its proximity to Shenandoah National Park, local breweries, and farm-to-table dining experiences. The city has a growing reputation as a foodie destination, with numerous farm-to-fork restaurants that attract weekend travelers. Investors should consider properties near the JMU campus, downtown Harrisonburg, or the scenic outskirts, where vacationers seek cozy retreats close to nature.
Key Data:
Average Daily Rate (ADR): $120 – $180
Occupancy Rate: 55% – 70%
Peak Season: School year and summer tourism
Popular Attractions: James Madison University, Shenandoah National Park, Edith J. Carrier Arboretum, White Oak Lavender Farm.
10. Norfolk
Norfolk, home to the world’s largest naval base, is a vibrant coastal city with a mix of military personnel, business travelers, and tourists. Its waterfront location and cultural attractions, such as the Chrysler Museum of Art and Norfolk Botanical Garden, draw visitors year-round. The city is also a major cruise port, making it a frequent stop for travelers exploring the East Coast. Additionally, the presence of Old Dominion University and numerous corporate headquarters contributes to a steady demand for short-term rentals. Investors should focus on waterfront properties, modern condos, and business-friendly rentals that cater to both leisure and corporate travelers.
Key Data:
Average Daily Rate (ADR): $150 – $250
Occupancy Rate: 65% – 80%
Peak Season: Spring and Summer
Popular Attractions: Chrysler Museum of Art, Norfolk Naval Station, Waterside District, Norfolk Botanical Garden
Conclusion
Virginia’s short-term rental market presents a lucrative opportunity for investors looking to capitalize on the state’s thriving tourism industry, diverse traveler demographics, and year-round demand. By choosing the right location, staying compliant with regulations, and optimizing property management strategies, investors can generate significant returns. Whether investing in a beachfront rental in Virginia Beach, a mountain retreat in Shenandoah Valley, or an urban property in Richmond, Virginia offers ample opportunities for success in the short-term rental space.
With careful planning, market research, and strategic pricing, investors can turn their short-term rental properties into profitable assets, ensuring sustainable revenue in Virginia’s growing vacation rental market.
