Southwest Harbor makes top 10 list of US markets for short-term rental investing
File photo / Laurie Schreiber
Recreational and commercial fleets are part of the draw in Southwest Harbor. Seen here is Dysart’s Great Harbor Marina at dawn.
With a population of less than 2,000 and a downtown of just a few blocks, the small town of Southwest Harbor has made a big-time ranking of the best U.S. markets for short-term rental investment.
The town, on the appropriately named “quiet side” of Mount Desert Island, was No. 10 among 265 markets on the list, released this week by AirDNA, a Denver provider of data and analytics for the nation’s $140 billion short-term rental industry.
Southwest Harbor had the highest occupancy rate of the top 25, at 76%, according to a news release. The report said seaside cottages in the town are valued at $399,000 on average, while guests pay an average daily rate of $330.
Average annual revenue in the Southwest Harbor short-term rental market is $73,000.
According to the report, Southwest Harbor has benefited from an expansion of its peak season, with guests visiting earlier and staying later in the season than before.
Nearby markets with high investment potential and slightly lower price points, the report said, include the village of Bernard, nearby on Mount Desert Island, and the city of Ellsworth.
Metrics used for the study include revenue growth and rental demand.
Overall, the report said, 2021 was the best on record for short-term rental performance. On average, U.S. short-term rentals had 62% occupancy, which is up 5% compared with 2020 and 10% higher than 2019.
U.S. short-term rentals are earning an average of 39% more annually than they were prior to the pandemic, benefiting from significantly higher average daily rates and occupancy, as well as fewer competitive listings in many areas.
The 2022 list was dominated by small and mid-sized cities, as it was in 2021.
In fact, the revenue potential of small city and rural areas in the U.S. has risen 55% since the start of the pandemic, followed closely by mountain and lake destinations and mid-sized cities.
No. 1 through No. 9 on the list were Maui, Hawaii; Kenai Peninsula, Alaska; Chattanooga, Tenn.; Gulfport-Biloxi, Miss.; Slidell, La.; Crystal River, Fla.; Joshua Tree, Calif.; Charleston, S.C.; and Galena, Ill.
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