Top U.S. Vacation Rental Markets for Real Estate Investors In 2025
More choices, emerging hotspots, and new market data are shaping the landscape for vacation rental investors this year. As consumer preferences evolve and remote work becomes a lasting norm, real estate investors and vacation rental managers are re-evaluating where—and how—they deploy their capital.
Key Takeaways
- Investors find promising yields in up-and-coming vacation destinations.
- Markets with moderate home prices and rising tourism are attracting new buyers.
- Data-driven selection has never been more important, with occupancy, ADR, and regulation all in flux.
Market Overview: Where the Numbers Lead
Recent industry reports and analytics platforms reveal a shifting mosaic of opportunity. While former juggernauts like major coastal metros still command attention, yield compression and regulatory crackdowns are shifting investor interest inward and upward toward secondary and tertiary cities, mountain towns, and Sunbelt retreats.
The average daily rate (ADR) in top U.S. leisure markets clocked in at around $278 in 2023. If you’re looking for a good starting point in your search, here are its hottest markets as of late in terms of RevPAR gains, as reported by Key Data:
- Mid-Atlantic (+11 per cent)
- New England (+10 per cent)
- Rocky Mountains (+9 per cent)
- Hawaiian Islands (+6 per cent)
Across the board, the average short-term rental occupancy rate in the U.S. is currently 54.3%
Why These Markets?
Rising home prices in major metros are pushing investors toward unheralded destinations, eager for higher cap rates and better cashflow. Asheville, for example, offers a blend of affordability, year-round tourism, and landlord-friendly regulations. Boise’s recent push into arts, food, and recreation draws younger, mobile renters, while Gulf Coast locales continue to attract snowbirds and family vacationers.
Regulatory Watch: Threat or Opportunity?
2025’s market is marked by a patchwork of new rules. Investors are flocking to regions with predictable or supportive short-term rental policies. For instance, areas in Texas and Tennessee have reaffirmed rental rights, while popular California and New York cities impose new licensing and tax compliance rules.
Astute investors are advised to vet local policies before buying—a market with favorable regulation and enforcement clarity can yield more predictable returns and less operational friction.
Actionable Investment Tips
- Prioritize local demand volatility: Look for data on hotel occupancy, event calendars, and seasonality.
- Get granular with neighborhood profiles: Even within “hot” markets, profit vastly differs street by street.
- Build relationships with local service providers: The right team helps you manage at a distance.
- Hedge against regulation: Diversify holdings across multiple states or countries.
The Bottom Line
“Where should I buy?” always leads the list of investor questions. In 2025, the smart money targets markets with resilient tourism, legal clarity, and enough value-add potential to ride out economic cycles. While headline metros cool off, smaller destinations with unique, authentic visitor experiences are hitting their stride. Data-driven diligence, measured optimism, and a clear read on regulation are the watchwords for the new investment cycle.
