8 Best Rental Markets for Vacation Homes in the Midwest

Looking to invest in a vacation rental property in the heartland? The Midwest might not be the first region that comes to mind, but it’s got some hidden gems that could make for lucrative investments. GOBankingRates spoke with industry experts to uncover some of the top rental markets for vacation homes in the Midwest.

Here are the eight best rental markets for vacation homes in the Midwest.

Also see six rental property mistakes that will cost you money.

Lavender Lloyd — property management training manager at Real Property Management, the largest residential rental property management franchise organization in North America — shared her thoughts about some of the smartest locations to invest your hard-earned cash in the Midwest rental market.

Lloyd described Door County as a top-tier destination. “Door County is often referred to as the ‘Cape Cod of the Midwest’ and is a top travel destination in the U.S.,” she said.

She also highlighted its diverse appeal. “It’s filled with picturesque lakeside views, charming small towns and plenty of outdoor activities like boating, hiking and fishing,” she said.

For investors, this translates to consistent demand. “The area’s strong tourism industry ensures a consistent demand for vacation rentals, especially during the summer and fall months,” Lloyd explained.

Traverse City offers a unique blend of natural beauty and cultural attractions. “Traverse City is renowned for its beautiful beaches, vineyards and outdoor recreation,” Lloyd noted.

And the area also sees regular visitors. “The region is famous for its cherries and hosts the National Cherry Festival annually, attracting visitors from all over the country,” she said.

The nearby national park is an additional draw. “Its proximity to Sleeping Bear Dunes National Lakeshore adds to its appeal, making it a desirable location for vacation homes,” Lloyd explained.

For those looking to tap into a more upscale market, Lake Geneva might be the ticket. Lloyd described its appeal, saying, “Lake Geneva is a popular getaway spot for residents of Chicago and Milwaukee, known for its clear lake waters, historic mansions and recreational activities like boating, golfing and hiking.”

This upscale atmosphere translates to strong rental potential. “The area’s upscale amenities and year-round attractions make it an attractive market for vacation rentals, especially for those looking for a luxurious retreat,” Lloyd said.

Branson’s entertainment scene makes it a standout choice. “Branson is a well-known entertainment hub with a wide array of shows, attractions and outdoor activities,” Lloyd said.

She highlighted its broad appeal, saying, “It draws tourists year-round, particularly for its family-friendly entertainment, proximity to Table Rock Lake and access to the Ozark Mountains.”

For investors, this means steady income potential. “Vacation homes in Branson benefit from the steady influx of visitors, ensuring high occupancy rates,” Lloyd said.

Thomas J. Brock, a CFA with over 20 years of experience in investments and an expert at Annuity.org, brought attention to an often-overlooked market. “The Quad Cities, a Midwest metropolitan area straddling the Mississippi River, is a very hot market for vacation rentals,” he said.

This market is attractive for rental homes for numerous reasons. “The rental market for vacation homes is booming in this area, largely due to its affordability and rich blend of cultural attractions and outdoor activities,” Brock said. “The region is known for its vibrant arts scene, historical museums and tremendous riverfront attractions, which include festivals, biking, hiking, fishing and boating.”

While Chicago might not be the first place you think of for a vacation rental, the data suggests it’s worth considering.

Beyond, a leader in revenue management for short-term rentals, reported that Chicago’s occupancy rate was 48.5% this year, down only slightly from 49.2% last year.

Minneapolis also shows potential as a vacation rental market.

According to Beyond’s data, the city had an occupancy rate of 46.6% this year, down slightly from 47.7% last year.

Wisconsin Dells stands out as a market on the rise. Beyond’s data shows that occupancy increased from 43.6% last year to 46.4% this year.

The Midwest is a great place for vacation rental opportunities, but, as always, make sure to do your own research before investing.