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magine owning a vacation home abroad that not only offers a personal getaway but also generates steady income. In recent years, a growing number of Americans have turned to overseas short‑term rentals as a way to diversify their portfolios and tap into markets that can deliver higher returns than the domestic scene.
**Why the shift?**
During the pandemic, U.S. home prices surged, making it difficult for many investors to find profitable cash‑flow opportunities at home. Jamie Lane, chief economist at AirDNA, notes that this has led to a surge in Americans purchasing properties abroad. “We’re seeing more people consider short‑term rentals overseas because it’s hard to find good cash flow stateside,” Lane explains. The appeal lies in lower purchase prices, favorable local regulations, and strong tourism demand.
**Popular destinations**
Costa Rica and Tulum, Mexico, are among the most attractive for U.S. buyers. Real‑estate agent Dennis J. Easters, who lives in Florida, says his partnership owns several rentals in Costa Rica. “The country’s regulations are business‑friendly, occupancy rates are high, and the ROI potential is solid,” he says. Their smaller units pull in about $24,000 a year, while a top performer can earn up to $80,000.
Another success story is Daria Kulachek, a millennial from Los Angeles who felt priced out of the local market. After extensive research, she purchased a short‑term rental in Spain for $98,000—an amount that would be unheard of in L.A. She now runs a consultancy helping others invest abroad, emphasizing that overseas property offers a tangible asset: a place to stay, rent out, or retire to.
**Top 10 global markets (Dec 2024–Nov 2025)**
AirDNA’s latest analysis, limited to markets with at least 1,000 active listings, highlights the following destinations as the most lucrative for short‑term rentals:
- Saint Barthélemy – $523,947 average annual revenue per host
- Providenciales & West Caicos, Turks & Caicos – $254,082
- Mykonos, Greece – $104,972
- Cabo San Lucas, Mexico – $91,599
- Saint‑Martin – $88,665
- San Michele al Tagliamento, Italy – $79,999
- Whitsunday, Australia – $74,940
- Sorrento, Italy – $73,508
- Canmore, Canada – $67,882
- Queenstown, New Zealand – $65,925
Lane points out that these locations are among the world’s most sought‑after vacation spots, featuring premium villas that drive the high revenue figures. However, he cautions that some of these markets, especially in Canada, impose strict short‑term rental restrictions. “Before you commit, you need to understand local regulations, permit requirements, and whether those permits are even available,” he advises.
**Research is essential**
The potential for high returns is tempered by several factors. In some high‑revenue markets, housing costs are also elevated, which can erode profitability. Kulachek stresses the importance of due diligence: “Check the rules, the permits, and the actual cost of the property before you invest.” Crunching the numbers—considering purchase price, operating expenses, occupancy rates, and regulatory hurdles—is crucial to avoid a scenario where the rental fails to deliver the expected income.
**Bottom line**
Investing in short‑term rentals abroad offers a compelling alternative for U.S. investors seeking higher yields and diversification. Destinations like Costa Rica, Tulum, and Spain provide affordable entry points and strong tourism demand. The AirDNA top‑10 list showcases the most profitable markets, but investors must navigate local restrictions and cost structures carefully. With thorough research and a clear understanding of the regulatory landscape, overseas short‑term rentals can become a lucrative addition to an investment portfolio.
