The 10 Best Short-Term Rental Markets Under $500K That Cash Flow

Short-term rental investing isn’t about grabbing the cheapest fixer-upper and hoping guests magically appear. It’s about choosing the right markets with strong demand, flexible rules, and the potential to push revenue past six figures. In places where hot tubs and pet-friendliness move the needle, the difference between a dud and a standout often comes down to the extras.

This list ranks the top 10 STR markets under $500K based on revenue potential, guest demand, investability, and the power of value-adding features. Each one includes insights on the type of travelers it attracts, what makes it special, and how much you can realistically earn. We pulled median home prices from Zillow as of May 2025 to help you frame expectations.

Just remember: Median means middle. If you aim for top-tier income, expect to buy an above-average property. That extra investment is often what unlocks the serious cash flow. I list the current STR regulations available online for each market, and every investor should be sure to thoroughly understand these before seriously investing in a property anywhere.

1. Lancaster, PA

Median home price: $360,383

Top-performing properties: $120,000/year (3 BR+, hot tub, pet-friendly)

• Occupancy rate: 56%
• ADR: $212.57
• RevPAR: $119.46

Lancaster is one of the most overlooked STR opportunities in the Northeast. While the average listing brings in just over $38K, properties that combine the correct layout with amenities like a hot tub and pet-friendliness can reach $120K annually. Guests are typically families, couples, and weekenders from nearby metros like Philly, Baltimore, and D.C., visiting Amish Country, exploring antique shops, and attending seasonal fairs.

Submarkets like Christiana and Conestoga offer rural charm with STR-friendly zoning and relatively low competition. Revenue growth and occupancy are climbing steadily, and with a solid ADR and increasing demand, Lancaster offers one of the best ROI stories in the region.

Regulation snapshot

• STR registration is required in approved zoning districts.
• Local 24/7 contact required (use your cleaner or handy person if you ask me *shrug*)
• Safety inspections mandatory
• Lancaster STR info

2. Panama City Beach, FL

Median home price: $416,972

Top-performing properties: $110,000/year (4 BR w/ hot tub + pet-friendly)

• Occupancy rate: 57%
• ADR: $319.21
• RevPAR: $181.65

Panama City Beach has gone from spring break capital to a family-friendly coastal STR powerhouse. While the average home brings in $52.7K, smart operators who combine a four-bedroom layout with a pool, hot tub, and pet-friendly access can reach six figures. Guests here are mostly families and multigenerational travelers coming for the beach, state parks, and water activities. Bahama Beach and El Centro Beach are top submarkets for their walkability and more relaxed regulatory enforcement.

This market thrives on volume and amenities. ADRs have risen 14% year over year, signaling pricing strength despite increased inventory. With the right combo of amenities and licensing in place, Panama City Beach delivers exceptional cash flow for a sub-$500K investment.

Regulation snapshot

• STR license is required from the city and state.
• Local contact required within 30 minutes.
• The license number must appear in all listings.
• Panama City Beach STR info.

3. Logan, OH

Median home price: $242,034

Top-performing properties: $106,000/year (4-BR home)

• Occupancy rate: 54%
• ADR: $353.21
• RevPAR: $189.06

Logan is the gateway to Hocking Hills, one of the most visited natural destinations in the Midwest. That alone fuels steady STR demand from nature lovers, hiking groups, and couples on romantic escapes. The average STR earns $64K/year, and a four-bedroom home easily clears $100K. ADRs are strong thanks to the area’s rural charm and limited high-quality accommodations.

Guests in Logan are looking for peace, seclusion, and nature-integrated experiences. Think cabins, hot tubs under the stars, and fire pits. Listings have surged by 13%, but revenue growth is still climbing, showing that the market is far from saturated.

Regulation snapshot

• Registration varies by county.
• Lodging tax collection is required.
• Septic and fire code requirements for new builds.
• Logan STR regulations.

4. Columbia, SC

Median home price: $232,153

Top-performing properties: $108,000/year (5 BR w/ pool)

• Occupancy rate: 55%
• ADR: $565.67
• RevPAR: $314.74

Columbia is quietly one of the best value STR markets in the Southeast. With median property prices just above $230K and high-yielding five-bedroom homes generating $94K to $108K, the numbers pencil out fast. Add a pool, and you’re well into six-figure gross revenue territory. The guest base is a mix of university visitors, military families (Fort Jackson), and road-trippers between Atlanta and Charleston.

Demand is growing faster than supply (10% vs. 8%), and the market has strong seasonality and revenue growth factors. Top submarkets include West Columbia, Arcadia Lakes, and the downtown corridor.

Regulation snapshot

• STR permit and business license required.
• Local contact required if the owner lives >45 miles away.
• Max occupancy and parking rules are enforced.
• Columbia STR info.

5. Fredericksburg, TX

Median home price: $496,229

Top-performing properties: $102,000/year (3 BR+ w/ hot tub + pet-friendly)

• Occupancy rate: 44%
• ADR: $362.97
• RevPAR: $158.53

Fredericksburg is a design-led, experience-driven market that caters to high-spending couples and small groups. While average revenue sits around $54K, adding a hot tub and pet-friendliness pushes that over $100K. This is one of the few Texas wine country destinations allowing STRs in the right zones.

Guests are weekend warriors from Austin, San Antonio, and Houston. Think girls’ trips, romantic getaways, and luxury birthday weekends. Homes that lean into aesthetics and curated experiences win big.

Regulation snapshot

• STR permit required with annual inspections.
• Zoning caps in residential areas.
• Local emergency contact within one hour required.
• Fredericksburg STR info.

6. Joshua Tree, CA

Median home price: $362,049

Top-performing properties: $98,200/year (3 BR w/ hot tub)

• Occupancy rate: 52%
• ADR: $337.76
• RevPAR: $176.86

Joshua Tree remains the poster child for design-focused desert STRs. The average home earns $58.5K/year, but a three-bedroom with a hot tub and group-friendly layout earns close to $100K. Guests come for the national park, stargazing, and spiritual escapes. Many also seek influencer-inspired architecture like domes, A-frames, and micro-villas.

This market thrives on aesthetic differentiation. The guest base includes LA creatives, couples, yoga retreats, and friend groups looking to disconnect in style.

Regulation snapshot

• STR permit through San Bernardino County.
• 24/7 local contact required within 30 miles.
• Strict guest caps and advertising rules.
• Joshua Tree STR guide.

7. Pensacola, FL

Median home price: $257,567

Top-performing properties: $100,000+/year (4 BR w/ pool and pet-friendly)

• Occupancy rate: 60%
• ADR: $328.70
• RevPAR: $197.92

Pensacola is one of the most substantial value plays on the Gulf Coast, offering low buy-in prices and top-tier revenue growth. While the average STR earns around $58K annually, larger properties with a pool and pet-friendly setup can push into six figures. Guests include beach-going families, military visitors, and snowbirds seeking a warm-weather escape.

Top submarkets like Pensacola Beach, Navarre Beach, and Perdido Key offer high demand and relaxed vibes with strong occupancy rates. With rising ADRs, Pensacola combines affordability with upside, primarily for investors focused on long-term appreciation and strong short-term returns.

Regulation snapshot

• Registration is required for all STRs.
• Limits on the number of guests and cars.
• Local contact required for emergency response.
• Pensacola STR info.

8. Seaside, OR

Median home price: $481,317

Top-performing properties: $81,000/year (hot tub property)

• Occupancy rate: 58%
• ADR: $328.81
• RevPAR: $191.48

Seaside and neighboring Cannon Beach remain coastal Oregon’s best STR regions. The average property earns $60.8K, but hot tubs boost revenue by over $20K. Guests are a mix of Portlanders, nature lovers, and families seeking mild-weather getaways.

The landscape favors scenic escapes, walkable downtowns, and beach proximity. Seasonality is lower here, so returns are stable across the year.

Regulation snapshot

• STR permit and inspection required.
• Local contact in Clatsop County required.
• Max occupancy rules enforced.
• Seaside STR info.

9. Savannah, GA

Median home price: $322,222

Top-performing properties: $124,000 (4+ bedroom, pool, pet friendly)

• Occupancy rate: 59%
• ADR: $328.57
• RevPAR: $195.27

Savannah offers strong ADR and occupancy, but revenue growth has plateaued. The average STR earns $63K/year. Guests visit for weddings, food and culture, ghost tours, and historic charm. Best bets are in White Marsh and Isle of Hope, where properties cater to small groups and wedding parties. As is typical, having a pool and being pet-friendly are massive selling points in this area.

Regulation snapshot

• STR certificate required by the city.
• Non-owner STRs capped by zone.
• Local contact required.
• Savannah STR info.

10. Houston, TX

Median home price: $267,854

Top-performing properties: $100,800/year (5 BR w/ pool)

• Occupancy rate: 51%
• ADR: $608.57
• RevPAR: $312.32

Houston might not be the first city you think of for STRs, but it’s one of the highest-yielding urban markets in the country for the right kind of property. A five-bedroom home near downtown with a pool can top $100K/year. Guests include business travelers, medical patients (MD Anderson), sports fans, and event-goers.

Top submarkets include Houston Heights, Downtown, and La Porte. Pet-friendly homes earn 13% to 25% more. Regulation is light but changing; the city passed its first STR ordinance in 2025, requiring registration by 2026.

Regulation snapshot

• STR registration and a $275 fee are required (starting in 2026).
• Local contact and safety posting requirements.
• Noise/event use restrictions.
• Houston STR ordinance overview.

Final Thoughts

Just because these markets have strong potential doesn’t mean the perfect deal will appear the first day you start looking. The climate is still competitive. Interest rates are high, and many sellers are pricing like it’s 2022. 

But that’s no reason to sit on the sidelines. Good deals are out there. The key is staying patient, doing the reps, and knowing your numbers. 

You want to recognize a solid opportunity when it hits the market because you’ve already spent hours studying the area. Understand the regulations inside and out. Know which submarkets to watch. Build relationships with a trusted agent and lender, so you’re ready to move when the right one appears.

If you’re chasing a valid value deal, be prepared to put some money into the property. A turnkey short-term rental usually costs more, but that might be the right path, depending on your goals. Real estate is flexible like that. Your strategy should reflect where you want to be five, 10, or even 20 years from now.