I’m from the city where you’re drenched in sweat when you go outside a couple of seconds (Houston, Texas). The first time I ever visited New Hampshire was in September of last year, and it was the biggest one ever wonderful the weather I have ever felt. I left and couldn’t wait to get back to enjoy the concrete sauna I lived in.
Fast forward to December The next one a year. I returned to New Hampshire with a couple of jackets, not knowing I was walking into the North Pole when I got off the plane. I thought my phone was broken, reading -4°F at one point, and that no one could survive this science experiment-like setting. The inside of my nose hardened as I walked outside, and I quickly learned that I wasn’t built for living in the Northeast (sorry to any of my friends there).
I tell this story to show the extremes of several that are very attractive STR markets. Annual markets may be the answer to year-round activity without extreme changes being necessary.
What is a Timeless Market?
A rare market that’s another one it is not usually the speed. These tend to have little variation in weather (compared to others) and enough events or stays to keep visitors coming all year round.
But slow down before you think all fair-weather markets are slam dunks. Some of the best markets in the country can generate enough income in as little as four to five months, allowing owners to see solid returns with little work.
When diving into the short-term rental market, it’s fun to daydream about cozy cabins and beach bungalows, but you can’t ignore the numbers. Well we have it AirDNA extracting important data points such as seasonality, average daily rate (ADR), and attendance.
Unless you’re buying in a city-only vacation market like Pigeon Forge, Tennessee, or Gulf Shores, Alabama, understanding all the exit strategies is essential to making a sound long-term investment. Using the BiggerPockets Market Finderyou can see the type of data you need to compare markets.
Let’s say you’ve needed to move away from STRs due to regulations or inefficiencies. If so, these long-term metrics like rent-to-price ratio (RTP), median home price, and affordability percentage will help you sleep at night, knowing you still have a high-quality investment.
Understanding Metrics
While both of these tools (AirDNA and Market Finder) are based on data estimates here, nothing the will compare with to target a market and to assess your competition in that market.
What are they to compare is it sold? What STR properties work best in the area? How can you overcome them with resources? What is the average long-term rent in the area? Ask any other question that will help give you a complete market image.
The standard of the season
You might think a season high number is bad, but here’s the twist—it’s not. The high seasonality means that demand remains constant throughout the year. If you’re looking at a high-value market, you’re less likely to sit through the slow months staring at a blank calendar. The higher the number, the slower the decline.
Average daily rate (ADR)
This is a good way to tell how much money you can make each night. A higher ADR means more money per booking, ie a good thing.
Occupancy rate
This is how people tend to live in your area. Even if your ADR is through the roof, if no one is booking your place, that money is just a dream.
Rent-to-price (RTP) ratio.
The median house price is divided by the median annual rent. Think of this as your return on investment. The higher the RTP ratio, the better profit you get compared to what you spent on the site.
Percentage of accessibility
This one is a little different. It tells you how much household income is needed to afford the median home price in that market. If this number is low, housing will be more expensive than people make. The top number? Your dream home just got a little more accessible.
Top 5
I want to say Las Vegas as a non-seasonal market in the US, but with strict regulations, I cannot recommend it as a great market to invest in. There are 13,000 active listings, so people apparently I was still working, but I was very nervous.
Let’s get into the top five!
5. Oklahoma City, Oklahoma
- Season level: 86 (Consistency, like a cowboy’s work ethic)
- Annual income: $23,400
- Daily average (ADR): $154.9
- Level of occupancy: 52%
- Median home price: $233,372
- Rent-to-price (RTP) ratio: 0.57%
- Accessibility percentage: 29.13%
Oklahoma City it keeps things simple and stable. With a seasonal average of 86, this city is not slowing down much. The ADR isn’t sky high, but at $154.9, combined with the low home price, you have a solid entry point for STRs. A 52% occupancy rate means you won’t be waiting forever to book, and your wallet won’t be crying when you buy that first place.
4. Tuscaloosa, Alabama
- Season level: 80
- Annual income: $44,100
- Average daily rate (ADR): $413
- Level of occupancy: 36%
- Median home price: $214,305
- Rent-to-price (RTP) ratio: 0.72%
- Accessibility percentage: 27.13%
Tuscaloosa? Oh yeah, that $413 ADR is not a typo. Football season is pure gold here, but the 36% occupancy rate tells you to buckle up in the offseason.
Alabama has been improving on its routes, as seen record tourism dollars five years ago. Still, with homes priced just over $200,000, you don’t need much to make a profit, especially if demand is high.
3. Columbia, South Carolina
- Season level: 72
- Annual income: $32,500
- Average daily rate (ADR): $208.1
- Level of occupancy: 53%
- Median home price: $246,082
- Rent-to-price (RTP) ratio: 0.61%
- Accessibility percentage: 25.8%
Columbia he is like that stable friend who is always there when you need him. With a season rate of 72, it is moderately consistent, and the rental-to-value ratio is one of the best. In addition, An affordable median home price means you don’t break the bank. You’ll see decent traffic year-round—it’s perfect if you just to begin with with STRs. Easy entry, strong return.
2. Flagstaff, Arizona
- Season level: 89 (Winter? Which winter?)
- Annual income: $50,200
- Average daily rate (ADR): $268.3
- Level of occupancy: 59%
- Median home price: $625,695
- Rent-to-price (RTP) ratio: 0.38%
- Accessibility percentage: 10.75%
FlagstaffThe standard of the season of 89 shows that this place does not know how to be lowered, even in winter. Actually, things might be fine, thanks to all those outdoor enthusiasts hitting the ski slopes.
Sure, the average home price might make you cringe a bit, but with an ADR approaching $270 and a solid occupancy, it’s not as intimidating as it looks. You just required bring your A-game (and maybe your savings account).
1. Shenandoah Valley (Harrisonburg), Virginia
- Season level: 93
- Annual income: $40,400
- Average daily rate (ADR): $262.9
- Level of occupancy: 47%
- Median home price: $317,509
- Rent-to-price (RTP) ratio: 0.52%
- Accessibility percentage: 21.05%
Shenandoah Valley (Harrisonburg), in Virginia, has a seasonal average of 93, meaning visitors are seen almost year-round—apparently, those mountain views never get old. With an ADR of $262.9, you’re charging premium prices for that clean air, and why not? And, with a median home price of $317,509, the barrier to entry isn’t too bad, so you can get in without breaking the bank. It’s like the perfect balance of high prices, low home costs, and nature that does all the marketing for you.
Final thoughts
Flagstaff should be at the top of your list if you follow the action year-round. In particular, this market can see improvement in winter monthsski fans flocked in. If budget-friendly markets are more your speed, the Shenandoah Valley, Columbia, and Oklahoma City offer solid benefits without breaking the bank. Then there’s Tuscaloosa, where high ADRs make for low attendance—just say “Roll Tide” when you get there, and you’ll be good to go.
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A Note About BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BiggerPockets.
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