Houston, renowned for its scorching heat, bustling traffic, and delectable cuisine, is now gaining recognition as a prime destination for short-term rental property investment. AirDNA, a software company, recently ranked the hottest short-term rental cities in the United States for 2023, with Houston securing the impressive third position.
The report indicates a substantial 20 percent increase in short-term rental supply in 2022, and this growth trend continues year after year, culminating in an impressive 1.3 million listings. But what places Houston so high on this coveted list?
The Bayou City’s distinction as the “Energy Capital of the World” plays a pivotal role in its ranking. With its status as the headquarters for numerous major oil and gas companies, Houston enjoys a robust economy, further fueling its success in the short-term rental market.
These prominent companies frequently require the services of consultants and temporary workers, contributing to the strong local demand for short-term rentals. In 2022, Houston led the nation with the addition of 3,200 new listings.
Another factor contributing to Houston’s appeal is its relatively affordable housing market. The report reveals that the average home price in Houston hovers around $270,000, making it an attractive prospect for investors.
Houston isn’t the sole Texas city on this esteemed list. Dallas claims the second spot, boasting an affordable housing market with an average cost of approximately $350,000. This affordability renders Dallas a popular choice for investors seeking opportunities in the short-term rental sector.
San Antonio, securing the fifth position, is the only other Texas city within the top 10. Its inclusion is partly attributed to its substantial military presence and numerous military bases. Given the need for lodging for visiting military family members, there is a substantial demand for short-term rentals. San Antonio offers an affordable investment option, with homes averaging $300,000 and an expected yield of 11.5 percent. The report also highlights its remarkable 43.1 percent growth among suburban homes and an impressive 28 percent year-over-year growth in listings.
While Houston shines as a short-term rental investment hub, the top spot on the list is claimed by the Phoenix/Scottsdale metro area in Arizona. This region stands out for its exceptional year-over-year supply increase, with listings surging by 60 percent. A 52 percent growth in demand for short-term rentals in 2022 and nearly 13,000 additional listings contribute to its popularity.
Rounding off the top 10 list are:
- No. 4: St. Louis, Missouri
- No. 6: St. Petersburg, Florida
- No. 7: Charlotte, North Carolina
- No. 8: Tampa, Florida
- No. 9: Columbus, Ohio
- No. 10: Raleigh/Durham, North Carolina.
Houston’s ascent in the world of short-term rentals showcases the diverse opportunities that exist within the real estate market, making it an enticing prospect for investors seeking solid returns.
