Dreaming of owning a profitable vacation rental property in 2025? With rising demand for unique getaways, shifting traveler preferences, and evolving regulations, choosing the right location is key to maximizing your return on investment (ROI). This updated guide combines 2025 market trends, fresh data from AirDNA, VRBO, and local tourism boards, and actionable insights to help you identify the best U.S. markets for short-term rental (STR) investments.
Table of contents
Why Invest in Vacation Rentals in 2025?
The short-term rental market is projected to grow by 6.8% annually through 2025 (IBISWorld), driven by:
- Remote work flexibility: More travelers blending work and leisure (“workations”).
- Gen Z demand: 68% of Gen Z prefers vacation rentals over hotels (Expedia Group).
- Event-driven travel: Major events like the 2025 Solar Eclipse and FIFA World Cup spike bookings.
- Strong Rental Demand: Look for areas with consistent tourism, events, or natural attractions.
- Affordability: Markets where property prices align with potential rental income.
- Favorable Regulations: Cities that support short-term rentals without overly restrictive laws.
- Year-Round Appeal: Destinations with activities for every season to minimize vacancy gaps.
- Growth Potential: Emerging markets where property values and tourism are rising steadily.
Top 10 Vacation Rental Markets in 2025
We’ve analyzed occupancy rates, revenue growth, regulations, and home affordability to rank these top-performing markets.
1. Grays Harbor, WA
Nestled along Washington’s rugged Pacific Coast, Grays Harbor is a haven for nature lovers. With proximity to Olympic National Park and miles of unspoiled beaches, this region attracts hikers, storm watchers, and eco-tourists year-round.
| Metric | 2025 Data |
| Avg. Home Price | $335,000 (+8% YoY) |
| Occupancy Rate | 64% (67% summer peak) |
| Avg. Nightly Rate | 158(Cabins),158(Cabins),245 (Beachfront) |
| Regulations | STRs allowed; $150 annual license fee |
| Cap Rate | 7.5-9% |
Why Buy Here in 2025?
- Eco-tourism boom: 22% increase in park visitors to Olympic National Park.
- Low saturation: Only 15% of homes are STRs.
- 2025 Trend: Target “digital detox” travelers with off-grid cabins.
- Rental Appeal: Cozy cabins and beachfront homes cater to families and outdoor enthusiasts.
2. Gainesville, FL
Home to the University of Florida, Gainesville offers steady rental demand from students, sports fans, and visiting families. The city’s mix of college-town energy and Southern charm makes it a versatile investment.
| Metric | 2025 Data |
| Avg. Home Price | $295,000 (+7% YoY) |
| Occupancy Rate | 69% (85% on game weekends) |
| Avg. Nightly Rate | 135(Studios),135(Studios),275 (3-bed homes) |
| Regulations | Permitted; 7% tourist tax |
| Cap Rate | 8-11% |
2025 Opportunity
- Key Attractions: UF football games, Kanapaha Botanical Gardens, Paynes Prairie Preserve.
- Rental Appeal: Affordable 3-bedroom homes near campus are ideal for game-day rentals.
- 2025 Insight: A new innovation district is attracting tech startups, boosting business travel.
3. Oxford, MS
Oxford combines Southern hospitality with the electric energy of Ole Miss football. This literary hub (hometown of William Faulkner) draws book lovers, foodies, and sports fans alike.
| Metric | 2025 Data |
| Avg. Home Price | $315,000 (+6.7% YoY) |
| Occupancy Rate | 66% (95% on rivalry weekends) |
| Avg. Nightly Rate | $450 (Game weekends) |
| Regulations | No STR bans; minimal restrictions |
| Cap Rate | 10-13% |
- Key Attractions: Ole Miss tailgates, Square District dining, Rowan Oak historic site.
- Rental Appeal: Luxury homes with pools and outdoor kitchens command premium rates during football season.
- 2025 Insight: New direct flights from major cities are making Oxford more accessible.
4. College Station, TX
As Texas A&M University expands, College Station’s rental market thrives. The city’s family-friendly vibe and central Texas location make it a magnet for both academics and vacationers.
| Metric | 2025 Data |
| Avg. Home Price | $345,000 (+7.8% YoY) |
| Occupancy Rate | 72% (Move-in weekends, graduations) |
| Avg. Nightly Rate | $190 (3-bed homes) |
| Regulations | STRs allowed; $175 annual permit |
| Cap Rate | 7-8.5% |
- Key Attractions: Kyle Field football games, George H.W. Bush Presidential Library.
- Rental Appeal: Spacious homes near campus cater to families visiting students.
- 2025 Insight: The university’s new medical school is driving demand for corporate rentals.
5. Buffalo/Niagara Falls, NY
Niagara Falls remains a global tourism icon, drawing millions of visitors annually. With affordable property prices and cross-border appeal (thanks to its proximity to Canada), this market offers reliable returns.
| Metric | 2025 Data |
| Avg. Home Price | $230,000 (+9.5% YoY) |
| Occupancy Rate | 60% (Winter festivals boost off-season) |
| Avg. Nightly Rate | 175(Condos),175(Condos),325 (Waterfront cabins) |
| Regulations | Permitted; 5% occupancy tax |
| Cap Rate | 6.5-8% |
2025 Trend
- Key Attractions: Niagara Falls State Park, winter light festivals, Maid of the Mist tours.
- Rental Appeal: Waterfront condos and cabins near the Falls are popular with international travelers.
- 2025 Insight: Post-pandemic tourism recovery is boosting occupancy rates to pre-2020 levels.
- Cross-border travel: Canadian tourists account for 35% of bookings.
6. Las Vegas, NV
Las Vegas isn’t just for casinos—it’s a year-round hub for conventions, concerts, and major events like the 2025 FIFA World Cup. Properties outside the Strip offer high returns with fewer regulatory hurdles.
| Metric | 2025 Data |
| Avg. Home Price | $415,000 (+6.4% YoY) |
| Occupancy Rate | 76% (82% during Super Bowl 2025) |
| Avg. Nightly Rate | 265(Condos),265(Condos),700+ (Luxury villas) |
| Regulations | STRs allowed >1 mile from the Strip |
| Cap Rate | 8-12% |
2025 Opportunity
- FIFA World Cup 2025: Hotels are already booked; STRs will see 3x rates.
- Key Attractions: Super Bowl LVIII, F1 Grand Prix, Red Rock Canyon.
- Rental Appeal: Luxury villas with pools are in demand for group stays.
- 2025 Insight: The FIFA World Cup is expected to triple nightly rates for short-term rentals.
7. Augusta, GA
Augusta’s vacation rental market revolves around the Masters Golf Tournament, where a single week can generate 30% of a property’s annual income. The city’s Southern charm and affordability add to its appeal.
| Metric | 2025 Data |
| Avg. Home Price | $200,000 (+8% YoY) |
| Occupancy Rate | 75% (98% Masters Week) |
| Avg. Nightly Rate | $550+ (Peak tournament pricing) |
| Regulations | Permitted; 9% lodging tax |
| Cap Rate | 13-16% |
2025 Tip
- Key Attractions: Augusta National Golf Club, Savannah Riverwalk.
- Rental Appeal: Homes near the golf course rent for $1,000+ per night during the Masters.
- 2025 Insight: Bookings for the 2025 tournament are already filling up six months in advance.
- List early for Masters Week 2025; 70% of bookings occur 6+ months in advance.
8. San Antonio, TX
San Antonio’s rich history, vibrant culture, and family-friendly attractions (like the River Walk and Alamo) ensure steady tourism. The city’s growing tech sector is also attracting business travelers.
| Metric | 2025 Data |
| Avg. Home Price | $330,000 (+8.2% YoY) |
| Occupancy Rate | 67% (Spring Break, Fiesta San Antonio) |
| Avg. Nightly Rate | 175(Studios),175(Studios),375 (River Walk homes) |
| Regulations | Permitted; safety inspections required |
| Cap Rate | 6.5-8% |
2025 Growth Driver
- 2025 Total Solar Eclipse aftermath: 2025 sees 12% more repeat visitors.
- Key Attractions: Fiesta San Antonio, Six Flags Fiesta Texas, Pearl District.
- Rental Appeal: Downtown lofts and River Walk townhomes appeal to urban explorers.
9. Jersey City, NJ
Jersey City offers stunning Manhattan skyline views at a fraction of NYC prices. Its walkable neighborhoods and easy transit access make it a favorite for budget-conscious travelers.
| Metric | 2025 Data |
| Avg. Home Price | $500,000 (+6% YoY) |
| Occupancy Rate | 73% (Year-round business travel) |
| Avg. Nightly Rate | $240 (1-bed condos) |
| Regulations | 60-day min. stays in Jersey City |
| Cap Rate | 5-6.5% |
2025 Trend
- NYC tourism rebound: 45 million visitors expected, driving overflow demand.
- Key Attractions: Liberty State Park, proximity to Manhattan, diverse dining scene.
- Rental Appeal: High-rise condos near the PATH train station attract business travelers.
- 2025 Insight: Post-pandemic tourism rebounds are pushing occupancy rates to 73%.
10. Panama City, FL
Panama City’s sugar-white beaches and turquoise waters rival Destin and Miami but with lower prices. Recent infrastructure upgrades have made it more resilient to seasonal storms.
| Metric | 2025 Data |
| Avg. Home Price | $355,000 (+7.5% YoY) |
| Occupancy Rate | 70% (Spring Break surge) |
| Avg. Nightly Rate | 270(Condos),270(Condos),450+ (Beach houses) |
| Regulations | Permitted; 6% tourist tax |
| Cap Rate | 7-8.5% |
2025 Opportunity
- Post-hurricane upgrades: New boardwalks and attractions boost bookings.
- Key Attractions: St. Andrews State Park, Shell Island, Gulf World Marine Park.
- Rental Appeal: Beachfront condos are ideal for families and spring breakers.
- 2025 Insight: New coastal boardwalks and dining spots are drawing younger travelers.
2025 Vacation Rental Revenue Hotspots
| Market | 2025 Revenue Growth | Key Drivers |
| Las Vegas, NV | +25% YoY | Super Bowl, FIFA World Cup |
| Austin, TX | +18% YoY | Corporate relocations, tech conferences |
| Gatlinburg, TN | +15% YoY | Great Smoky Mountains tourism rebound |
| Myrtle Beach, SC | +12% YoY | Family travel demand |
2025 Regulatory Changes Impacting STR Investors
Stay ahead of these updates:
- New Orleans, LA: STR ban in residential zones (effective Jan 2025).
- Denver, CO: 90-day annual rental cap for non-owner-occupied properties.
- Hawaii: 3% STR tax to fund affordable housing.
Is 2025 the Right Time to Invest?
Absolutely. With travel demand stabilizing post-pandemic and younger generations embracing vacation rentals over hotels, well-chosen properties can deliver both income and personal enjoyment. Focus on markets with diversified tourism (e.g., college towns, event hubs, and nature destinations) to mitigate risk.
Contact us and lets invest you money with Brownstone Vacations.
FAQs for Vacation Rental Investors
Q: Is 2025 a good year to invest in vacation rentals?
A: Yes! With post-pandemic travel demand stabilizing and Gen Z embracing STRs, markets with strong tourism infrastructure offer reliable ROI.
Q: What are the most Airbnb-friendly cities in 2025?
A: Top deregulated markets include Grays Harbor, WA; Oxford, MS; and Panama City, FL.
Q: How do I calculate cap rate for a vacation rental?
A: Use the formula: (Annual Rental Income – Expenses) / Property Price x 100. Aim for 8%+ in 2025.
Final Takeaway
In 2025, the best vacation rental markets combine affordable entry points, year-round demand, and lax regulations. Prioritize cities with event-driven tourism (Las Vegas, Augusta) or untapped natural beauty (Grays Harbor, Traverse City). Always verify local STR laws and use tools like AirDNA’s MarketMinder or Rentastic to model cash flow.
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