Tuesday, September 27, 2022

15 Best Cities to Own a Vacation Rental


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Editor’s Note: This story originally appeared on LawnStarter.

Thanks to vacation rental marketplaces like Airbnb and Vrbo, anyone can earn extra cash by renting out their spare room, mother-in-law suite, or entire home to tourists.

In the U.S., short-term rental hosts can rake in an average of over $44,000 per year, according to market analysis firm AllTheRooms. But as with all real estate investments, your income potential depends heavily on where you buy your vacation rental property.

To help you find the right spot for your future B&B, LawnStarter ranked 2022’s Best Cities to Own a Vacation Rental.

We compared nearly 190 of the biggest U.S. cities based on revenue potential, initial investment costs, and average expenses. We also factored in entertainment options for guests, public safety, and climate.

Check out the top cities to own a vacation rental below.

1. Miami, FL

meunierd / Shutterstock.com

Overall score: 67.18

Revenue potential rank: 1

Initial investment rank: 138

Overhead rank: 22

Entertainment rank: 7

Safety rank: 146

Climate rank: 46

2. New York, NY

Snowy weather in Manhattan Times Square
kmichal / Shutterstock.com

Overall score: 66.98

Revenue potential rank: 4

Initial investment rank: 154

Overhead rank: 115

Entertainment rank: 1

Safety rank: 68

Climate rank: 56

3. New Orleans, LA

New Orleans, Louisiana at night
f11 photography / Shutterstock.com

Overall score: 60.49

Revenue potential rank: 7

Initial investment rank: 99

Overhead rank: 39

Entertainment rank: 10

Safety rank: 109

Climate rank: 55

4. Cincinnati, OH

Cincinnati
Anne Kitzman / Shutterstock.com

Overall score: 59.20

Revenue potential rank: 2

Initial investment rank: 88

Overhead rank: 51

Entertainment rank: 41

Safety rank: 120

Climate rank: 96

5. Las Vegas, NV

Las Vegas, Nevada
Kobby Dagan / Shutterstock.com

Overall score: 58.99

Revenue potential rank: 26

Initial investment rank: 81

Overhead rank: 70

Entertainment rank: 4

Safety rank: 18

Climate rank: 163

6. Dayton, OH

Dayton Ohio
Alex Balanov / Shutterstock.com

Overall score: 58.53

Revenue potential rank: 9

Initial investment rank: 29

Overhead rank: 12

Entertainment rank: 105

Safety rank: 51

Climate rank: 102

7. Tampa, FL

Tampa, Florida
Ilya Images / Shutterstock.com

Overall score: 57.57

Revenue potential rank: 14

Initial investment rank: 63

Overhead rank: 94

Entertainment rank: 24

Safety rank: 15

Climate rank: 57

8. Knoxville, TN

Knoxville, Tennessee
Kevin Ruck / Shutterstock.com

Overall score: 57.56

Revenue potential rank: 49

Initial investment rank: 25

Overhead rank: 7

Entertainment rank: 50

Safety rank: 78

Climate rank: 68

9. Orlando, FL

Orlando, Florida
songquan-deng / Shutterstock.com

Overall score: 57.29

Revenue potential rank: 53

Initial investment rank: 37

Overhead rank: 41

Entertainment rank: 8

Safety rank: 143

Climate rank: 71

10. Augusta, GA

Sean Pavone / Shutterstock.com

Overall score: 57.18

Revenue potential rank: 20

Initial investment rank: 16

Overhead rank: 15

Entertainment rank: 118

Safety rank: 69

Climate rank: 119

11. Virginia Beach, VA

Virginia Beach, Virginia at night.
Jon Bilous / Shutterstock.com

Overall score: 56.24

Revenue potential rank: 6

Initial investment rank: 66

Overhead rank: 146

Entertainment rank: 43

Safety rank: 19

Climate rank: 52

12. Nashville, TN

Nashville, Tennessee
jdross75 / Shutterstock.com

Overall score: 56.14

Revenue potential rank: 8

Initial investment rank: 95

Overhead rank: 81

Entertainment rank: 19

Safety rank: 126

Climate rank: 99

13. Hialeah, FL

Hialeah, Florida
tome213 / Shutterstock.com

Overall score: 56.12

Revenue potential rank: 51

Initial investment rank: 138

Overhead rank: 2

Entertainment rank: 178

Safety rank: 96

Climate rank: 46

14. Winston-Salem, NC

Winston-Salem, North Carolina
Sean Pavone / Shutterstock.com

Overall score: 56.04

Revenue potential rank: 33

Initial investment rank: 80

Overhead rank: 37

Entertainment rank: 83

Safety rank: 11

Climate rank: 80

15. Eugene, OR

Eugene, Oregon
Sean Pavone / Shutterstock.com

Overall score: 56.02

Revenue potential rank: 10

Initial investment rank: 120

Overhead rank: 67

Entertainment rank: 74

Safety rank: 48

Climate rank: 45

Methodology

Planning trip with paper map
gpointstudio / Shutterstock.com

For each of the 200 biggest U.S. cities, we gathered publicly available data on the factors listed below.

We then grouped those factors into six categories: Revenue Potential, Initial Investment, Overhead, Entertainment, Safety, and Climate.

We eliminated all cities — 11 total — lacking critical data, which resulted in a final sample of 189 cities.

Next, we calculated weighted scores for each remaining city in each category. Finally, we averaged the scores for each metro across all categories.

The city that earned the highest average score was ranked “Best” (No. 1), while the city with the lowest was ranked “Worst” (No. 189).

These are the factors we considered:

  • Occupancy Rate in Past 12 Months
  • Average Daily Short-Term Rental Rate in Past 12 Months
  • Revenue in Past 12 Months
  • Median Listing Price per Square Foot
  • 1-Year Change in Median Listing Price per Square Foot
  • Median Annual Property Taxes
  • Average Per-Household Spending on Housekeeping Services
  • Average Per-Household Spending on Lawn and Garden Services
  • Average Per-Household Spending on Home Improvements
  • Average Per-Household Spending on Utilities, Fuel, and Public Services
  • Number of Attractions
  • Crime Index
  • Natural Hazards Index
  • Historical Average Annual Number of Extremely Hot Days
  • Historical Average Annual Number of Extremely Cold Days

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.



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