Ask one individual; we’re already deep right into a recession. Ask another person; the financial system’s fantastic—simply don’t test your 401(okay).
Fact 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 can be both tried-and-true mid-tier trip gems or rising stars which can be shortly incomes their stripes, in accordance with precise knowledge, not scorching takes. So, whether or not you’re already internet hosting or simply purchasing on your first property, this info helps you construct one thing that lasts, whether or not we’re in a recession or not.
We use STR Information Skilled, AirDNA, and Zillow’s median house pricing knowledge 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 knowledge is proven up or down 12 months over 12 months.
What Makes a Market Recession-Proof for STRs?
Drive-to locations close to main cities
When individuals cease flying, they begin driving. Areas one to 4 hours from massive metros are inclined to thrive throughout financial dips. Suppose weekend getaways from Atlanta, Dallas, or Washington, D.C.
Low value of entry
Decrease house costs imply much less debt and higher cash-on-cash returns, which turns into much more essential when rates of interest or lending tighten.
Constant, year-round demand
Markets close to nationwide parks, school cities, or army bases keep busy no matter season or financial circumstances.
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.
Prime STR Markets to Think about if a Recession Hits
1. Gatlinburg/Pigeon Forge, TN
AirDNA rating: 89/100
Median house value (Zillow): $461,306 (? 5.9%)
STR knowledge:
- Annual income: $71,600 (? 5%)
- Occupancy: 60% (? 5%)
- ADR: $361.59 (? 9%)
- RevPAR: $214.64 (? 4%)
Gatlinburg and Pigeon Forge are basic recession-proof STR markets. The Smoky Mountains entice guests year-round, and other people will all the time discover cash for Dollywood, mountain views, and scorching 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 larger 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 house value: $315,708 (? 5.9%)
STR knowledge:
- 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 house costs, making it a uncommon combo of excessive ADR and low acquisition value. AirDNA has it highlighted as its solely main free marketplace for customers to get further premium knowledge on, so the cat could also be out of the bag with this one.
Listings are up 8% 12 months over 12 months, which indicators development but in addition elevated competitors. Regardless of that, it stays a prime decide for Texans, who characterize 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 house value (Stanton, KY): $167,000 (? 11%)
STR knowledge:
- 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 house 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, sturdy outside attraction, 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 house value: $360,627 (? 3.8 %)
STR knowledge:
- Annual income: $55,600 (? 9%)
- Occupancy: 65% (? 5%)
- ADR: $297 (? 7%)
- RevPAR: $193.6 (? 12%)
St. Pete has quietly develop into certainly one of Florida’s most compelling Airbnb markets. With its walkable appeal, artwork, seashores, and breweries, this metropolis attracts sturdy ADRs, almost $300 an evening.
Occupancy stays regular even in shoulder seasons, and RevPAR (income per accessible 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 house value: $473,790 (? 3%)
STR knowledge:
- 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, house to Appalachian State College. It’s had a tough 12 months—it was hit exhausting by a hurricane and noticed an 11% drop in energetic listings, but it surely stays a prime vacation spot for in-state journey, mountain climbing, and wellness retreats.
Its twin attraction as a vacationer and mid-term housing market (because of the college) makes it price watching. Pricing could dip briefly, providing a considerable entry alternative.
6. Luray, VA
AirDNA rating: 95/100
Median house value: $284,530 (? 5.3%)
STR knowledge:
- 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 preserve tempo with the close by sights.
7. Branson, MO
AirDNA rating: 57/100
Median house value: $255,251 (? 3%)
STR knowledge:
- Annual income: $40,500 (? 6%)
- Occupancy: 51% (? 1%)
- ADR: $248.35 (? 5%)
- RevPAR: $128.14 (? 6%)
Branson is commonly missed. It’s a family-friendly Midwest staple with many theater exhibits, lake sights, and a large church/bus tour market. Listings surged 21% after Airbnb referred to as it a prime fall vacation spot in 2023, positioning it as a Midwest vacation spot to look at. Laws have tightened right here for the reason that 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 possibly can obtain varies, relying on the facilities and placement you possibly can present. Sizzling tubs generate a mean income of $33K/12 months, in comparison with swimming pools, which create a mean income of $22.8K/12 months.
8. Logan, OH (Hocking Hills)
AirDNA rating: 99/100
Median house value: $237,362 (? 3.3%)
STR knowledge:
- 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 completely different A-frame clusters. Excessive ADR, low lodge competitors, and a nature-driven visitor base make it a top-tier glamping or trendy cabin location.
Guarantee your design stands out—this market rewards aesthetics and distinctive stays.
9. Faculty cities (throughout the U.S.)
Faculty 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: Large Bear, Idyllwild
These spots are perfect for households downsizing holidays however nonetheless wanting to flee the town. They normally permit STRs when the massive metropolis bans them, and demand stays strong from city escapees.
Search for “Twin Menace” Properties
Need actual recession safety? Then cease eager 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 of us coping with insurance coverage claims. These visitors don’t want a scorching 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 take a seat empty. You simply change gears, replace your itemizing technique, and preserve the money flowing. It’s like having a second security internet constructed into your property. That flexibility provides you room to breathe when individuals panic-list their properties on Zillow.
The underside line: Twin-use properties provide you with choices—which, in unsure markets, are every thing.
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 appear like. However right here’s what I do know: Uncertainty tends to hit luxurious STR markets the toughest (sorry, Breckenridge). When individuals 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 monitor document of staying sturdy, even in a downturn. So, as a substitute of chasing flash, give attention to 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 together with your offense.
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