Lawton, Oklahoma, is the Best Market For New Short-Term Rentals? That’s What the Data Says

As a native Texan, I never thought that I would declare Oklahoma the winner over us in almost anything. But that time has finally come. New short-term rental investors need to hear about this market, and it breaks my heart that it is just north of the Texas border.

Finding the best market for new short-term rental investors has proven more daunting in recent years. Interest rates and insurance premiums are rising, and competition is increasing due to the sheer supply in the short-term market. There was even a rumor of an Airbnb bust, but that may have just been for the hosts thinking Grandma’s old house was the perfect short-term rental.

We all know the heavy hitters for STR markets: The Smokies, Joshua Tree, Whitefish, etc. These markets also come with heavy price tags that push out most new investors. What if I told you there are still areas that can bring in nearly as much income for half of the start-up costs?

The Market Finder

I like to utilize a few tools when researching these new markets that are less popular but may hit my potential “buy box”: The BiggerPockets Market Finder and utilizing specific STR data (e.g., AirDNA, Pricelabs). 

These markets may not be in your backyard (not mandatory but helpful for beginners), but when run properly, you can see significant returns on your investment. Short-term rentals typically have the biggest cash flow but require more work for good reason: More money, more problems. 

Your systems, teams, and tech stacks must be in place to succeed even with just one rental. The core team (agent, lender, cleaner, handyperson, inspector, etc.) will be invaluable in your investment areas. Systems to help automate your rentals, such as cleaning and operations (e.g., Turno, Breezeway), property management software (e.g., Hospitable), marketing, and more, will allow your STR to thrive without being on call 24/7. We all dread the thought of two guests showing up simultaneously because you double-booked your rental.

I have been searching the southern region of the U.S. (sorry, Northeast; I am not built for the cold) for my next investment, and I have been back and forth between Oklahoma and Arkansas. Anytime I enter a potential market to build unique experiences, I like to use my 60/30/10 rule as one part of my decision (among many factors): 

• 60 minutes from a major city (at least 500,000 residents)
• 30 minutes from a national, regional, or state attraction
• 10 minutes from some type of civilization (gas station at a minimum, but hoping for a Dollar General as a starting point)

How Did I Nominate Lawton?

While Lawton may not have the highest appreciation rate or be near some major national parks that others value highly, it has some fantastic metrics that can work for investors at a lower entry price point: 

• You are near major, growing feeder cities (Dallas/Fort Worth and Oklahoma City).
• You are near major regional attractions (three state parks, Mt. Scott, casinos, and more).
• The median price is $135,069. Yes, you read that correctly.
• You have a great backup plan for mid- and long-term rental (Fort Sill Army facility, Goodyear Tires, and Oklahoma National Guard nearby).

When I started my research, I was not even aware of Lawton precisely, and I’m sure most of you weren’t, either. Market Finder lists 25 expertly curated areas showing many of the significant metrics investors seek. 

After crunching some numbers and drinking too much coffee, I went through different ZIP codes I was targeting for short-term rentals and realized something: Nothing compared to Lawton. 

As a short-term rental investor, I take this information and pinpoint what would bring guests to the market. The sheer number of feeder cities, regional attractions, and lack of properties that dominate the market have my gears spinning.

AirDNA listed the Best Vacation Rental Markets in the Next 5 Years, and their winners are based on the population and income growth of major cities nearby. They also combed through reviews on Airbnb to see what cities were mentioned the most as places people traveled from  (I have no idea how they did that, but I am impressed). 

Lawton is a prime candidate to benefit from these major feeder cities’ population growth over the next five years.

Broken Bow vs. Lawton

Broken Bow, Oklahoma, has been one of the hottest STR markets for the past two to three years, but these two have some major glaring differences. 

According to Realtor.com, the median listing home price for Broken Bow is a staggering $695,000, while Lawton’s sat at $165,000. This means a Lawton mortgage with today’s interest rates could cost you around $1,278, and Broken Bow could be $4,669. You may not have $100,000+ ready for a down payment, but $15,000+ is something feasible for the newer investor to strive for. 

Let’s compare data on similar 3-4 bedroom and 2-3 bathroom rentals in these markets.

If you know anything about the Broken Bow market, the occupancy rate is astonishing. Some top single performers are hitting 90% consistently on their rates, so how can it be only 41%? 

Both markets have increased by 23% for active listings over the last three years. The difference is that Lawton has 473 active listings, and Broken Bow has 4,600 active listings. Briefly scrolling through Airbnb listings in these markets, you will quickly see where professional hosts have dominated the market and where the opportunity truly lies. Each place will have regulations to check for in specific areas, and as always, never trust a HOA.

I knew I had hit the jackpot when the top five performing properties in the market did not even utilize professional photos (if you don’t take anything else away from this, please spend the $200-$1,000 for professional pictures). The top performers average around a 68% (highest 83%) occupancy rate, with a clear opportunity to provide an authentic experience to guests.  

I’m sure many people are waving their fists and screaming at the screen after hearing me announce Lawton as the best short-term rental market for new investors. The key word here is “new.” Lawton is a safe market for new short-term rental investors as they search to see if they even enjoy running the business side of it. The mid-term, long-term, or flipping exit strategies are profitable for the price range and should leave investors feeling OK…lahoma (I’ll see myself out on that one). 

Dive into the Market Finder today and see what short-term rental markets could become a long-term success for you.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.