Last updated: January 2025
Introduction
Midwest, often referred to as America’s heartland, is known for its rich cultural history, diverse landscapes, and thriving industries. This region, which includes states like Michigan, Ohio, Indiana, Minnesota, and Wisconsin, offers a wealth of opportunities for short-term rental investors. The Midwest is home to bustling cities, scenic small towns, and stunning natural attractions that draw a steady stream of tourists throughout the year. As we dive into the best Airbnb rental markets in the Midwestern US, we’ll explore data collected until January 2025 to highlight the top destinations sorted by gross yield. These markets combine strong investment potential with appealing tourist experiences. Our latest tool, Chalet Intel, provides comprehensive insights and strategies tailored to investors at all experience levels. It includes a calculator, regulation overview, and much more for each market discussed. Links will be provided for each market, allowing you to conduct a more detailed analysis on your own.
1. Cleveland, OH
Cleveland, OH, located on the shores of Lake Erie, continues to attract visitors with its iconic Rock and Roll Hall of Fame and a thriving theater district.
The city has seen a notable increase in home values by 9.33%, with the average price now at $109,341. Cleveland boasts an Average Daily Rate (ADR) of $161.45 and an occupancy rate of 56.76%, leading to an impressive annual revenue of $32,252 from 1,079 active rentals.
With a gross yield of 29.50% and a cap rate of 17.70%, this market stands out as an excellent opportunity for short-term rental investors. While the property tax rate is higher at 2.33%, the potential returns make Cleveland a competitive and rewarding market for those looking to invest.
Check out our Cleveland STR Market Insights for a deeper dive into our analysis of this short-term rental market.
2. South Bend, IN
South Bend, IN, home to the prestigious University of Notre Dame, blends collegiate charm with rich historical landmarks, making it a compelling destination for short-term rental investors.
The city has experienced a 5.66% increase in home values, with the average price now at $180,057. South Bend’s market demonstrates strong potential, with an Average Daily Rate (ADR) of $347.91 and an occupancy rate of 54.32%, generating annual revenues of $50,749 from 456 active rentals.
Boasting a gross yield of 28.19% and a cap rate of 16.91%, along with a modest property tax rate of 0.94%, South Bend offers an enticing combination of affordability and high returns for investors.
Check out our South Bend STR Market Insights for a deeper dive into our analysis of this short-term rental market.
3. South Haven, MI
South Haven, MI, a picturesque lakeside destination, is celebrated for its stunning beaches, charming downtown, and lively festivals.
The city has experienced a 4.73% increase in home values, with the average home price now at $340,092. South Haven stands out with an impressive Average Daily Rate (ADR) of $498.54 and an occupancy rate of 57.83%, generating annual revenues of $56,588 from 256 active rentals.
With a gross yield of 16.64% and a cap rate of 9.98%, this market offers a promising opportunity for short-term rental investors. While the property tax rate is slightly higher at 1.41%, the potential for high returns makes South Haven a desirable market for investment.
Check out our South Haven STR Market Insights for a deeper dive into our analysis of this short-term rental market.
4. Cincinnati, OH
Cincinnati, OH, a vibrant city known for its rich history, beautiful riverfront, and diverse cultural attractions, continues to be an attractive market for short-term rental investors.
The city has experienced a 4.10% increase in home values, with the average home price now at $236,319. Cincinnati offers a steady Average Daily Rate (ADR) of $154.70 and an occupancy rate of 54.35%, leading to an annual revenue of $37,406 from 1,253 active rentals.
With a gross yield of 15.83% and a cap rate of 9.50%, this market provides a solid opportunity for investors. While the property tax rate is slightly higher at 1.75%, Cincinnati’s growing popularity and strong returns make it a compelling choice for those looking to invest in short-term rentals.
5. Columbus, OH
Columbus, OH, the state capital and a hub for arts, education, and business, presents an enticing market for short-term rental investors.
The city has seen a 3.48% increase in home values, with the average home price now at $241,872. Columbus thrives with an Average Daily Rate (ADR) of $170.94 and an occupancy rate of 55.19%, translating to an annual revenue of $36,085 from 1,711 active rentals.
With a gross yield of 14.92% and a cap rate of 8.95%, the market offers promising opportunities for steady returns. While the property tax rate is 1.82%, Columbus’s growing appeal and diverse attractions make it a standout choice for investors seeking to maximize their portfolios.
Check out our Columbus STR Market Insights for a deeper dive into our analysis of this short-term rental market.
