10 Recession-Proof Short-Term Rental Markets You Should Be Watching

In This Article

Ask one individual; we’re already deep right into a recession. Ask another person; the financial system’s superb—simply don’t verify your 401(ok). 

Reality is, whether or not we’re in a recession, heading towards one, or dodging it by a thread, many short-term rental traders are asking the identical factor: What sort of STR market holds up when cash will get tight? 

Now, I’m not right here to argue inflation stats or get political. That’s not my lane. What I’m right here to do is stroll you thru a couple of markets which are both tried-and-true mid-tier trip gems or rising stars which are shortly incomes their stripes, in keeping with precise information, not sizzling takes. So, whether or not you’re already internet hosting or simply procuring to your first property, this data helps you construct one thing that lasts, whether or not we’re in a recession or not. 

We use STR Information Professional, AirDNA, and Zillow’s median dwelling pricing information to look additional into these markets. AirDNA has a market rating that ranks areas on a number of standards to type a rating from 1 to 100, with one being the bottom (Park Metropolis, UT) or 100 being the cream of the crop (Joshua Tree, CA). All information is proven up or down yr over yr. 

What Makes a Market Recession-Proof for STRs?

Drive-to locations close to main cities

When folks cease flying, they begin driving. Areas one to 4 hours from giant metros are inclined to thrive throughout financial dips. Suppose weekend getaways from Atlanta, Dallas, or Washington, D.C.

Low price of entry

Decrease dwelling costs imply much less debt and higher cash-on-cash returns, which turns into much more vital when rates of interest or lending tighten.

Constant, year-round demand

Markets close to nationwide parks, school cities, or navy bases keep busy no matter season or financial situations.

Diversified demand

Markets that entice each vacationers and mid-term visitors, like journey nurses, distant staff, or relocations, are inclined to outperform single-use trip zones.

High STR Markets to Contemplate if a Recession Hits

1. Gatlinburg/Pigeon Forge, TN

AirDNA rating: 89/100

Median dwelling value (Zillow): $461,306 (? 5.9%)

STR information:

• Annual income: $71,600 (? 5%)
• Occupancy: 60% (? 5%)
• ADR: $361.59 (? 9%)
• RevPAR: $214.64 (? 4%)

Gatlinburg and Pigeon Forge are traditional recession-proof STR markets. The Smoky Mountains entice guests year-round, and folks will all the time discover cash for Dollywood, mountain views, and sizzling tubs. 

The trick right here? Keep away from the center:

• One-bedrooms earn round $42,000.
• One-to-four-bedrooms solely rise to ~$50,000.
• Nonetheless, four-to-eight bedrooms can earn $110,000+ with only a 2% occupancy dip in downturns, in comparison with increased dips in zero-to-four-bedroom locations.

The underside line: This market favors huge household cabins or romantic one-bedroom getaways—nothing in between.

2. Damaged Bow, OK

AirDNA rating: 94/100

Median dwelling value: $315,708 (? 5.9%)

STR information:

• Annual income: $67,600 (? 12%)
• Occupancy: 45% (? 5%)
• ADR: $439.35 (? 7%)
• RevPAR: $199.5 (? 1%)

Damaged Bow continues to dominate with its proximity to Dallas, Oklahoma Metropolis, and Tulsa. It’s a luxury-cabin hotspot with comparatively low dwelling costs, making it a uncommon combo of excessive ADR and low acquisition price. AirDNA has it highlighted as its solely major free marketplace for customers to get further premium information on, so the cat could also be out of the bag with this one.

Listings are up 8% yr over yr, which alerts development but in addition elevated competitors. Regardless of that, it stays a prime choose for Texans, who symbolize 4 of the most important STR feeder markets within the U.S. (Houston, San Antonio, Austin, and Dallas).

3. Crimson River Gorge, KY

AirDNA rating: 97/100

Median dwelling value (Stanton, KY): $167,000 (? 11%)

STR information:

• Annual income: $40,300 (? 3%)
• Occupancy: 50% (? 4 %)
• ADR: $245 (? 4 %)
• RevPAR: $121.7 (? 1%)

No STR on this area is anticipated to make over $100,000—however that’s the purpose. It’s a low-barrier, low-risk space the place a well-designed $65,000-$75,000 annual income property can shine.

Crimson River Gorge is dwelling to the Daniel Boone Nationwide Forest and Pure Bridge State Park, which hikers and climbers love. STRs right here have a tendency towards glamping, A-frames, and rustic-modern cabins.

Low competitors, robust outside enchantment, and year-round demand make this a sensible play.

Right here’s an instance STR pulling $65K in income.

4. St. Petersburg, FL (non-luxury zones)

AirDNA rating: 76/100

Median dwelling value: $360,627 (? 3.8 %)

STR information:

• Annual income: $55,600 (? 9%)
• Occupancy: 65% (? 5%)
• ADR: $297 (? 7%)
• RevPAR: $193.6 (? 12%)

St. Pete has quietly turn out to be considered one of Florida’s most compelling Airbnb markets. With its walkable allure, artwork, seashores, and breweries, this metropolis attracts robust ADRs, practically $300 an evening. 

Occupancy stays regular even in shoulder seasons, and RevPAR (income per out there room) development is outpacing the remainder of Florida. It’s a candy spot for higher-end STRs with out the Miami-level price ticket.

5. Boone, NC

AirDNA rating: 53/100

Median dwelling value: $473,790 (? 3%)

STR information:

• Annual income: $44,300 (? 3%)
• ADR: $303 (? 5%)
• Occupancy: 47% (0%)
• RevPAR: $142 (? 5%)

Boone is a small school city within the Blue Ridge Mountains, dwelling to Appalachian State College. It’s had a tough yr—it was hit arduous by a hurricane and noticed an 11% drop in lively listings, nevertheless it stays a prime vacation spot for in-state journey, climbing, and wellness retreats.

Its twin enchantment as a vacationer and mid-term housing market (due to the college) makes it price watching. Pricing could dip quickly, providing a considerable entry alternative.

6. Luray, VA

AirDNA rating: 95/100

Median dwelling value: $284,530 (? 5.3%)

STR information:

• Annual income: $49,900 (? 5%)
• Occupancy: 50% (? 2%)
• ADR: $293 (? 5%)
• RevPAR: $143.86 (? 4%)

Nestled close to Shenandoah Nationwide Park, Luray is good for glamping and unplugged cabin retreats. It’s only a few hours from Washington D.C., Richmond, and Virginia Seashore, making it a key escape route for East Coasters. Listings have risen by 5% YoY on this space, however demand ought to maintain tempo with the close by sights. 

7. Branson, MO

AirDNA rating: 57/100

Median dwelling value: $255,251 (? 3%)

STR information:

• Annual income: $40,500 (? 6%)
• Occupancy: 51% (? 1%)
• ADR: $248.35 (? 5%)
• RevPAR: $128.14 (? 6%)

Branson is usually ignored. It’s a family-friendly Midwest staple with many theater exhibits, lake sights, and an enormous church/bus tour market. Listings surged 21% after Airbnb known as it a prime fall vacation spot in 2023, positioning it as a Midwest vacation spot to look at. Rules have tightened right here because the explosion, so do your due diligence find a location that works.

This isn’t a luxurious vacation spot—it’s about nostalgia and affordability. The ADR you may obtain varies, relying on the facilities and site you may present. Sizzling tubs generate a median income of $33K/yr, in comparison with swimming pools, which create a median income of $22.8K/yr. 

8. Logan, OH (Hocking Hills)

AirDNA rating: 99/100

Median dwelling value: $237,362 (? 3.3%)

STR information:

• Annual income: $65,500 (? 7%)
• Occupancy: 53% (? 1%)
• ADR: $363.47 (? 6%)
• RevPAR: $194 (? 6%)

Logan is the gateway to Hocking Hills, one of many Midwest’s most picturesque, Instagram-worthy spots. This market has exploded with nature-first, design-forward stays like The Cliffs at Hocking Hills and totally different A-frame clusters. Excessive ADR, low lodge competitors, and a nature-driven visitor base make it a top-tier glamping or fashionable cabin location.

Guarantee your design stands out—this market rewards aesthetics and distinctive stays.

9. School cities (throughout the U.S.)

School cities are mid-term rental machines. Throughout downturns, professors relocate, households go to, and soccer season fills weekends.

Versatile zoning in smaller cities generally permits STRs to pivot into mid-term stays (30+ days) with little friction, making these a wonderful recession hedge.

10. Suburban STR-friendly pockets close to main cities

• Austin: Dripping Springs, Bastrop
• Dallas: Granbury, Waco
• Atlanta: Blue Ridge, Helen
• Los Angeles: Huge Bear, Idyllwild

These spots are perfect for households downsizing holidays however nonetheless wanting to flee town. They often permit STRs when the large metropolis bans them, and demand stays strong from city escapees.

Search for “Twin Menace” Properties

Need actual recession safety? Then cease enthusiastic about your short-term rental as a one-trick pony. 

Probably the most clever traders I do know are shopping for dual-use properties: locations that may crush it as a short-term rental however pivot seamlessly into mid-term housing if the market shifts. Suppose journey nurses, contractors, households between properties, or people coping with insurance coverage claims. These visitors don’t want a sizzling tub and a hammock—they want a clear, furnished area for 30+ days and can pay good cash for it.

So, if tourism dips, your Airbnb doesn’t have to sit down empty. You simply swap gears, replace your itemizing technique, and maintain the money flowing. It’s like having a second security internet constructed into your property. That flexibility offers you room to breathe when folks panic-list their properties on Zillow. 

The underside line: Twin-use properties offer you choices—which, in unsure markets, are the whole lot.

Last Ideas

Look, I’d love a crystal ball, identical to everybody else, to see precisely the place the market’s headed and what the following 12 months will seem like. However right here’s what I do know: Uncertainty tends to hit luxurious STR markets the toughest (sorry, Breckenridge). When folks tighten their budgets, these high-end trip leases are sometimes the primary to really feel it.

However don’t get it twisted; these aren’t the one markets that may win. Home journey has a confirmed observe report of staying robust, even in a downturn. So, as a substitute of chasing flash, concentrate on fundamentals. Search for drive-to locations close to main cities, areas with built-in sights (nature, tradition, school cities, and many others.), and properties that provide the flexibility to pivot: short-term, mid-term, or someplace in between. 

Recession-proofing your portfolio isn’t about taking part in protection. It’s about being sensible along with your offense.