The ROI of beauty: do these 31 markets only earn more money from appearance?

Short -term rental (Strs) have a clear advantage: cash flow” valuationAnd the added advantage of possessing a home in a place that you like to visit. However, as every experienced host knows, the postcard view does not always translate into the profit.

Regulations, seasonal, real estate tax and nocturnal tariff caps can significantly influence your deal. That is why we have analyzed 31 of the most beautiful cities in America, a list directly from Condé Nast TravelerAnd ran the figures as an investor would do.

We have investigated median house prices of Zillow, estimated annual strokes with predicted averages using Mashvisor, Rabbu, Airbtics, and PricelabsAnd calculated a simple yield (gross income divided by price). Then we added the crucial layer that omits the most “best cities” lists: local str rules.

The results show a mix of possible winners with double digits and friendlier policy, big-budget prestige cities where return is small, and non-investment destinations where moratoriums or outright prohibited str’s make anything but impossible.

The figures first

Here are the information about prices, revenues, classifications and regulatory comments for all 31 cities we have investigated:

Difficult but possible

• Bar Harbor, me: $ 677K houses$ 97k turnover, 14% yield. VR-2-rent homes are limited at 9% and require a minimum of four nights.
• Ketchikan, and: $ 399k houses$ 44k turnover, 11% yield. Zoning permit and parking space required.
• Lake Geneva, Wi: $ 399k houses$ 68k turnover, 17% proceeds. License needed, 180-day cap, two nights min.
• Lake Placid, NY: $ 358k houses$ 53k turnover, 15% yield. New non -needed str’s are forbidden; be a hosted strs Capped in neighborhoods.

Potential

• Beaufort, SC: $ 410k houses$ 44k turnover, 11% yield. 6% cap per neighborhood.
• Camden, me: $ 674K houses$ 58k turnover, 9% yield. 150-license cap.
• Deadwood, SD: $ 445k houses$ 35k turnover, 8% yield. Strs are prohibited In residential areas Except during the Sturgis Motorcycle Rally.
• Eureka Springs, AR: $ 311k houses$ 23k turnover, 7% proceeds. New strs are prohibited In residential areas.
• Gatlinburg, TN: $ 411k houses$ 54k turnover, 13% yield. Strs forbidden In some zones, but allowed in most.
• Harpers Ferry, WV: $ 396k houses$ 38k turnover, 10% yield. Registration and taxes.
• Hudson Valley, NY, $ 437K houses$ 53k turnover, 12% yield. Must be Registered and payment costs.
• Jekyll Island, go: $ 875k houses$ 77k turnover, Application process.
• Lewes, from: $ 605k houses$ 52k turnover, 9% yield. License and local contact.
• Mackinac Island, Mi: $ 490k houses$ 37K turnover, 7.6% yield. Rent <30 days treated as hotels.
• Montpelier, VT: $ 437K houses$ 34k turnover, 8% yield. Rental registration and taxes.
• Rockport, Mon: $ 869k houses$ 61K turnover, 7% yield. State STR -registration and taxes.
• St. Augustine, FL: $ 441K houses$ 52k turnover, 12% yield. Strict destination rules.
• St. Michaels, MD: $ 730k houses$ 79k turnover, 11% yield. License and inspections.
• Sedona, AZ: $ 904k houses, $ 71k turnover, 8% yield. Registration and taxes.
• Sincerely, nm: $ 449k houses$ 45k turnover, 10% yield. 120 permit cap.
• Whitefish, size: $ 858k houses$ 70k turnover, 8% yield. Only Certain zones are allowed.
• Woodstock, vt: $ 712K houses$ 54k annual strokes, 7.6% yield. City Ordinance with Petten.

Great budget

• Block Island, RI: $ 1.8 million houses$ 84k turnover, 5% yield. Annual registrationTwo ppl/bedroom.
• Carmel, Ca: $ 2.36 million houses$ 125k turnover, 5% yield. Strs are prohibited in R-1 zones (the single-family district).
• Jackson, we: $ 1.9 million house$ 79k turnover, 4% yield. Strs limited Up to three stay/60 nights in residential.
• Snowmass Village, CO: $ 2.1 million houses$ 130k turnover, 6% yield. Annual permit, Minus of four nights.

Do not invest

• Cannon Beach, or: $ 890k houses$ 69k turnover, 8% yield. 14-day rules.
• Friday Harbor, wa: $ 887k houses$ 37k turnover, 4% yield. Registration and taxes.
• Magnolia Springs, all: $ 403k houses$ 29k turnover, 7% yield. Str Moratorium.
• Craftsmildner, .com: $ 1.3 million house$ 92k turnover, 7% yield. Str Moratorium.
• Portsmouth, NH: $ 776K houses$ 50k turnover, 6.5% yield. Strs are illegal In residential areas.
• Woodstock, vt: $ 712K houses$ 53k annual strokes, 7.6% return, Town ordinance with caps.

Breakthrough

Now that we have the figures in hand, we let these markets analyze further.

Difficult but possible

These are the markets that make the palms of investors sweaty. The yields are incredible on paper. We are talking about 14% to 17% in places such as Lake Geneva, Wi and Bar Harbor, me.

But here is the catch: you don’t just buy a home; You buy a number of rules that force you to work differently.

Take the lake from Geneva. Yes, a yield of 17% looks like mailbox money, but the city appears on 180 days and maintains distance rules between stays. That means that you do not really have it all year round; You have a seasonal machine. Anyway, if You are priced From the mountains or beach markets, Lake Geneva is one of the few Midwest cities where the cash flow on the big names competition.

Bar Harbor is another where the rules seem painful, but scarcity is your friend. Non-owner Str’s are covered at 9% of the packages and require minima of four nights. Most investors see that as a dealbreaker. I see it as a canal. Once you get in, there is less chance of a race to the bottom at nightly rates.

Lake Placid, NY, also fits this mold. The yield of 15% is realistic, but “not -geostwerde” Str’s are prohibited In most neighborhoods. That is not a spreadsheet problem; That is a strategy problem. You play the hosted game, find a commercial area or wait until a grandfather permit becomes available.

Bottom Line: If you are willing to circumvent limitations, these markets will bear fruit. The rules are casual hosts, who can leave more room for pros.

Potential

This Is the most huge bucket – Markets where the figures work, but the local rules are more like guardrails than roadblocks.

Gatlinburg, TN, is the headline act here. You get a yield of 13% and a market that is bulletproof thanks to the Smokies. The only catch is zoning plans. Buy in the wrong district (such as R-1a or R-2a), and you are in a non-continuous flowing holiday home. Buy in the right district and you have a str.

Then you have markets such as Taos, NM and Beaufort, SC, where caps limit the offer. Taos only spends 120 and allows Beaufort Caps Strs with 6% per neighborhood in the entire city. Both rules sound scary, but think of the canal they create. Fewer permits mean less competition, which means a higher occupation and price force if you already have one.

The northeast is a mixed bag. Hudson Valley, NY, yields 12%, but only if you follow the rules and zoning plans of the owner occupation. Camden, Me, Limited Licenses and Rockport, MA, Punts to registration and taxes over the entire state. In other words, you can earn in all three money, but you must accept the paperwork as part of your insurance.

Some places in this layer are more niche. Eureka Springs, AR, forbidden new Str’s in residential zones, which is growing, but protects existing operators. Deadwood, SD, is only really logical if you benefit from the Sturgis Motorcycle Rally (which takes place in August) or outside the city limits. Whitefish, MT, requires you to buy in the right zone. If you can live with those peculiarities, the figures apply.

Investors must view these cities in the same way as a home with postponed maintenance. The bones are good, but you must manage the risk to unlock the value.

Great budget

This category is where the figures are no longer useful from a pure cash flow perspective.

Jackson, we, is the classic example. Houses have on average almost $ 2 million, and even with strong nocturnal rates, your return hardly breaks 4%. Add the three-stay/60-night cap in residential zones and you are essentially boasting rights, no cash flow.

Carmel-by-the-Sea, Ca, tells a similar story. Beautiful city, insane question, but strs are prohibited In R-1 zones. Unless you are on a legal non -conforming unit, you look at a $ 2.3 million house that no cash flow is not cash.

Snowmass Village, Co, seems more lucrative in terms of income, with $ 130k per year, but again, with $ 2 million house prices and a heavy permit, your return is only 6%. Good if you want a ski house to pay his bills. Not great if you try to scale up.

These are not a cash flow play. They are Trophy assets. You can buy here for appreciation, for inheritance, or because you can afford it. For most investors these are the markets “Look by Don’t Touch”.

Do not invest

And then there are the markets where maths looks good, but the rules actually close the door. Most will still allow Str’s in specific commercial zones or out -of -town boundaries, but you never know when they will break down more.

Portsmouth, NH, is the clearest: Str’s are illegal in residential zones, full stop.

Paia, Hi and Magnolia Springs, already, have both moratoriums in place. That is the government that tells you that they do not want you on their market for the time being.

Cannon Beach, or is a case study in strangling a market: limiting stays up to once every 14 days results in a collapse of the occupancy rate. The yield is 8%on paper. In reality you run half empty.

Friday Harbor, WA, has a 337-external cap and a moratorium on new applications. That is a closed store unless someone else gives them.

This Is the category where you look at the numbers and think: “To be true.” And in most cases you would be right.

Last thoughts

What really shows this list is that you cannot only invest from proceeds. The 31 most beautiful cities in America are not necessarily the 31 best strmarkets. Some will make you rich. Some will drive you crazy. And some don’t let you in at all.

As an investor you must not only endorse the building, but also politics. Rules change. Caps are forced. Moratoria appear.

If you are already on one of these markets, you probably have a canal. If you try to come in, the best plays in the “tough but possible” and “potential” layers – places with demand, strong yields and rules that cause barriers for access to brick walls.