Looking to expand your short-term rental portfolio or dive into your first property? The world of STRs is constantly evolving, and some markets are quietly offering huge opportunities for savvy hosts and investors. From underrated U.S. destinations to sun-soaked international hotspots, the right location can mean higher yields, less competition, and happier guests. In this article, I break down 6 U.S. markets and 4 worldwide locations that are emerging (or already thriving) as prime STR opportunities, with detailed pros, cons, and investment insights for each.
Later this month my husband and I are going to explore the Dominican Republic, and maybe you will find it’s a great market for your next STR investment, too!
United States Markets
1. Shenandoah Region, Virginia
Why it stands out:
The Shenandoah region (near Shenandoah National Park and the Blue Ridge foothills) is increasingly being cited as one of the most underrated U.S. STR markets for 2025. It offers affordable entry prices (average home price ~ $255,593) and strong yield potential (yield ~16.4 %) for STRs. (biggerpockets.com) With proximity to natural attractions, national park access, and a growing travel‑market appeal (hiking, nature retreats, weekend getaways for nearby metro areas), it checks many of the “good STR market” boxes.
Pros:
- Lower purchase prices relative to coastal or large metro STR markets = higher upside in yield and lower entry cost.
- Nature‑based tourism continues to grow in popularity (good for mid‑week and off‑peak bookings).
- Moderate competition compared to overheated STR markets.
Cons: - Seasonality risk: Many guests will travel in peak seasons (spring/summer) so occupancy may drop off in shoulder months.
- Some rural/regional locations may lack high‑end amenities, property management infrastructure, or easy access for guests.
- Regulation could change: rural counties may adopt STR rules as volumes increase.
Investment takeaway: For hosts ready to manage logistics (property maintenance, guest experience) and willing to target nature‑tourism, Shenandoah offers a high‐yield, lower‐entry alternative to major city/tourist‑beach STRs.
2. Columbia, South Carolina
Why it stands out:
Columbia, South Carolina is a midsized city with a diversified base: students (University of South Carolina), state capital business travellers, recreation nearby, and growing tourism. Its average house price (~$232,153) and 14.6 % yield figure make it attractive. (biggerpockets.com) The fact that STRs are currently allowed (though see regulatory caveat below) also adds to the appeal.
Pros:
- Urban destination with multiple travel demand vectors: business, students, events, tourism.
- Relatively modest entry price means lower capital risk.
- Good yield potential with larger homes aimed at families or groups.
Cons: - Regulation warning: Columbia recently imposed a moratorium on new STR permits in residentially zoned districts (though existing STRs are still permitted) until June 2026. (strprofitmap.com) This means expansion is limited for now and potential buyers must check zoning/permit status.
- The city is less of a “destination vacation” market (compared to beach or ski resorts), so marketing may need to be more strategic.
Investment takeaway: Columbia is an appealing market for value‑focused investors, but you’ll need to carefully check permit status and zoning, and target properties that appeal to both leisure and business/travel markets for resilience.
3. The Poconos, Pennsylvania
Why it stands out:
The Pocono Mountains region (Northeastern Pennsylvania) remains a favorite for nature escapes, ski trips, lake and mountain recreation. Recent data show typical ADR (average daily rate) of ~$329 and annual revenue around $55K for active STRs. (Airbtics | Airbnb Analytics) It ticks many boxes: tourism demand, relatively affordable real estate (compared with major resorts), and growth upside.
Pros:
- Strong appeal for leisure travellers: families, groups, outdoor‑activity seekers, ski/winter guests.
- Pricing upside: Large homes with hot tubs, game rooms, etc., command premium rates in certain pockets.
- Entry cost lower than high‑end resorts, so opportunity for value‑add hosts.
Cons: - Strong seasonality: Summer and winter peaks dominate; spring/shoulder months may be weaker. (Live Free Listings)
- Some communities/townships are implementing or tightening regulations (license caps, zoning amendments) in response to STR growth. (PoconoVacationHomeSales)
- Higher maintenance and guest service expectations: big homes, amenities (hot tubs, lake/river access) often require more upkeep and smarter operations.
Investment takeaway: The Poconos is a high‑potential market for hosts who can manage seasonal swings and deliver guest experience. It’s less “plug and play” than some, but with active management it offers strong upside.
4. Rockford, Illinois
Why it stands out:
According to data, Rockford, Illinois combines affordability with performance: median home price ~$171,000, occupancy ~56.9 %, ADR $281.93, annual revenue ~$58,553. (Lodgify) It’s not a flashy coastal resort, but that can be part of the appeal: less competition, lower entry cost, strong yield potential.
Pros:
- Low barrier to entry and strong yield metrics for what you pay.
- Opportunity to dominate smaller local market with standout quality and guest experience.
- Less hype means less inflated purchase prices and less supply saturation.
Cons: - Lower tourist draw compared to major resort or beach markets; you’ll likely rely on regional travel, weekend bookings, or niche guests rather than international tourists.
- Regulation/market conditions still need due diligence (local zoning/STR policies) though it appears more permissive than major metros.
Investment takeaway: For hosts prioritizing yield and cost control over glamorous destinations, Rockford may offer a strong alternative and diversification outside major coastal/urban STR markets.
5. Panama City Beach, Florida
Why it stands out:
According to recent rankings, Panama City Beach, Florida was named Florida’s top STR market in 2025: attractive beach destination, strong tourism year‑round, high nightly rates, and relatively modest acquisition cost compared to other Florida coastal cities. (The Coffey Group)
Pros:
- Classic beach vacation destination with broad appeal (families, groups, beach tourists).
- Strong ADR and occupancy potential due to consistent demand.
- Potential for year‑round bookings (though still peak in warm months) and familiar management models.
Cons: - Coastal regulatory risk: Many beach destinations are now under ever‑increasing scrutiny from local governments due to housing/crowd concerns. Monitoring entry and ongoing compliance is important.
- Weather/natural‑disaster risk: Hurricanes, coastal erosion, flood zones may raise insurance or maintenance costs.
Investment takeaway: Panama City Beach is a strong “classic” vacation rental market with proven demand, but you’ll need to factor in region‑specific risks and tighter competition among hosts.
6. Springfield / Peoria / Midwest Value Market (Illinois)
Why it stands out:
Markets such as Peoria, Illinois and Springfield are pointing to high yields with lower property values: e.g., Peoria listing price ~$202,930, gross yield ~15.3 %. (Time Out Worldwide) While not first‑tier vacation destination, they represent value markets where STR demand is emerging or under‑penetrated.
Pros:
- Very affordable entry cost, which lowers financial risk and capital outlay.
- Growing recognition of STR viability in smaller markets for weekend getaways, regional travel, business/travel stays.
- Potential to dominate supply in lesser‑known markets.
Cons: - Requires careful marketing and guest‑experience differentiation; you won’t have automatic beach‑or‑ski demand.
- Regulation may still evolve: smaller towns/midsized markets often implement STR rules later, but they increasingly do.
- Scaling may require more operational savvy since guest demand may be less predictable (though consistent if you target the right audience).
Investment takeaway: If your investment strategy prioritizes entry cost and yield, these Midwest/secondary markets can be compelling, but they demand solid operations and marketing rather than relying solely on destination appeal.
International/Worldwide Markets
7. Dominican Republic (Punta Cana / Las Terrenas)
Why it stands out:
According to Global Property Guide, the Dominican Republic ranks as a top country for STR investment in 2025: low property prices, high tourism demand (especially U.S./Canada travellers), and relatively light regulation in key areas. (globalpropertyguide.com) Regions like Punta Cana and Las Terrenas offer strong rental yield potential.
Pros:
- Year‑round warm climate and resort/beach demand make occupancy more stable than some seasonal markets.
- Lower maintenance/labor costs in many Caribbean markets, increasing net cash‑flow.
- Attractive lifestyle/investment combination; many buyers are drawn by both vacation use and income.
Cons: - Foreign ownership and local legal/permit frameworks must be studied carefully: you’ll need trusted local partners and clarity on STR regulations, taxes, and repatriation of profits.
- Property management and guest services may require reliable local firms, which can be less predictable than U.S. ops.
- Currency, economic/political risk may be higher; exit/liquidity may be less seamless than U.S. markets.
Investment takeaway: If you’re comfortable with international investing and management logistics, the Dominican Republic offers a strong high‑yield, beach‑resort STR play. Due diligence is essential.
8. Greece (Athens + Greek Islands)
Why it stands out:
The Greece market (particularly Athens and tourist islands like Mykonos, Santorini, Crete) remains highly popular for travel and digital‑nomad stays. Global Property Guide lists Greece among the best countries for STR investment in 2025. (globalpropertyguide.com)
Pros:
- Strong tourism demand (international travellers, charter flights, digital nomads) and attractive cultural/holiday appeal.
- Real estate values (especially outside top‑tier islands) can be reasonable relative to revenue potential.
- Potential for diversification of audience (holiday travellers, remote‑work guests).
Cons: - Regulation can be complex: island zoning, local tourist tax regimes, licensing/permit requirements vary considerably.
- Seasonality remains strong: summer dominates in many locations, and winter occupancy may be far lower.
- Property management across islands/logistics can be more challenging (ferries, maintenance, supplies).
Investment takeaway: For hosts comfortable with international logistics and guest‑experience differentiation, Greece offers a blend of holiday/resort and longer‑stay demand. But you’ll want to carefully pick location, check local STR laws, and compensate for seasonality.
9. Mexico (Tulum / Puerto Vallarta / Cabo San Lucas)
Why it stands out:
Mexico continues to highlight as a top STR investment region: areas like Tulum, Puerto Vallarta and Cabo San Lucas are experiencing robust tourism, U.S./Canada demand, and favorable yield conditions (including favorable exchange‑rate dynamics). (globalpropertyguide.com)
Pros:
- Large and growing flow of U.S./Canadian travellers, making marketing easier from North America.
- Real estate valuations in certain zones still favorable relative to revenue in peak seasons.
- Infrastructure and property‑management ecosystem (especially in popular resort towns) are well‑developed.
Cons: - Some resort zones have rising property prices and competition; the “entry cost discount” may be narrowing.
- Regulations around STRs, foreign ownership, local zoning, condo/HOA rules need careful review.
- Seasonality and local economic/political shifts may impact demand/quality of service.
Investment takeaway: Mexico is one of the best international “near‑shore” markets for U.S. hosts/investors seeking resort/beach demand with relatively easier management logistics (compared to more remote markets). Strong pick if location and regulatory diligence are executed.
10. Costa Rica (Tamarindo / Jaco / Quepos)
Why it stands out:
The Costa Rica market (specifically beachfront areas like Tamarindo, Jaco and Quepos) continues to draw tourists and digital‑nomad stays, and is often cited for favorable conditions for STR investors. (globalpropertyguide.com)
Pros:
- Strong demand from international travellers, eco‑tourism, surf/digital‑nomad lifestyle, and retirement visitors, which equals a broad audience.
- Lower competition in certain zones and potential for niche positioning (eco‑luxury, boutique, nature‑immersive stays).
- Lifestyle and investment blend make it appealing for hybrid owner/guest use.
Cons: - Foreign investor logistics: property rights, tax residency, local management and guest‑service quality must be vetted.
- Infrastructure may be less robust in remote zones; higher maintenance and guest‑service demands.
- Some risk of regulatory change as tourism growth and local community pressures increase.
Investment takeaway: If you’re open to travel/international management and guest segmentation (eco/surf/digital nomad), Costa Rica offers strong upside, especially as remote‑work and “stay where you vacation” trends deepen.
Key Comparative Insights & Criteria Review
When evaluating these 10 markets, let’s revisit what criteria I choose for a “good” STR market:
- Little to no government regulation (or at least manageable regulation). Many markets remain permissive, but hosts must always check local rules.
- Strong or growing tourism/popular (or semi‑popular) with attractions. Every market listed above has tourism drivers (nature, resort, culture, events).
- Good real estate value or investment upside. Many U.S. markets above offer entry prices below coastal‑resort alternatives.
- Investment incentives (yields, affordability, room for value add). Markets like Shenandoah, Columbia, Rockford, Dominican Republic, Mexico show strong yield/potential relative to cost.
But beyond that, here are some general observations:
- Secondary markets are increasingly attractive. The “mega–tourist resort” markets (major beaches, big ski towns) are priced up and regulations tightening; value may be in the “next tier” markets.
- International “near‑shore” markets (Caribbean, Mexico, Central America) offer appealing yield for U.S. investors, but require extra operational/logistical diligence.
- Seasonality matters. Many markets listed rely heavily on peak seasons. Use dynamic pricing, diversify guest types (mid‑term stays, business travellers) to improve occupancy outside of peak.
- Regulation risk is real and rising globally. Even permissive markets can change quickly as communities react to STR growth (see Poconos regulation note, Columbia moratorium).
- Guest experience and property quality differentiate. Especially in lower‑cost markets, hosts must deliver standout experiences to compete and achieve strong yields. Value entry alone isn’t enough if property is sub‑par.
Final Takeaways for Hosts & Investors
- Before buying, engage in local due diligence: zoning/STR permit rules; nights‑cap history; tax/tourism fee regime; HOA restrictions (if applicable).
- Build in contingency for regulation changes: even the best markets may tighten; consider exit strategy or ability to convert to long‑term/rentals.
- As I always say, focus on operational excellence: guest‑service standards, marketing, amenities, responsive management (especially in smaller or non‐destination markets).
- Use data to screen markets: ADR, occupancy rate, annual revenue, yield vs. purchase cost.
- Consider diversification: across geography, property size, guest segment (families, business, digital‑nomads, mid‑term stays) to balance risk.
- Plan for long‑term property value: beyond rental income, consider appreciation potential, local development, infrastructure improvements.
- Build strong local partnerships: reliable property managers, maintenance service providers, guest‐communication systems; especially vital in out‑of‑town or international markets.
For hosts and investors who move with speed and precision – who pick the right market, execute the right operation, and adapt to regulation – the STR sector remains very much alive with opportunities. Whether you prioritize yield, lifestyle, diversification or value entry, the 10 markets above offer a compelling mix of those factors.
And, if you ask me, the Dominican Republic, Mexico, and Greece all are markets I wouldn’t mind taking a little vacation in my own property!
Which markets are you looking at currently?
Read more industry news in my latest article “October 2025 Short-Term Rental & Real Estate Recap.”
