Best places to invest in short-term rentals are rarely the markets making the biggest headlines. The strongest returns often come from cities with steady demand, reasonable home prices, and regulations that support responsible hosts.
This guide compares 15 U.S. short-term rental markets using key investment metrics including rental revenue potential, occupancy, cap rate, and housing affordability.
You’ll also learn how to interpret the rankings, compare markets based on your presupuesto, and avoid common mistakes that can turn a promising investment into a disappointing one.
How We Ranked the Best Short-Term Rental Markets
No single metric can tell you whether a market is a good investment. A city with a high average daily rate may also have expensive homes, while an affordable market may struggle with low occupancy.
To build this ranking, we compared markets using four factors that have the biggest impact on long-term returns:
| Factor | Por qué es importante |
|---|---|
| Tasa de capitalización | Measures the property’s potential return relative to its purchase price. Higher is generally better, but only when supported by stable demand. |
| Tasa de ocupación | Indicates how consistently properties are booked throughout the year. Markets with steady occupancy usually produce more predictable cash flow. |
| Tarifa diaria promedio (ADR) | Shows how much guests are willing to pay per night. Higher ADR can offset lower occupancy when demand remains healthy. |
| Median Home Price | Determines your upfront investment and significantly influences cash-on-cash returns. |
Our rankings combine market performance data from ADN aéreo, Beyond Pricing, Zillow, and other publicly available industry sources. We also considered local demand drivers and housing affordability rather than relying on a single metric alone.
Tener en mente: The “best” market is not necessarily the one with the highest cap rate. The best investment is the market that matches your budget, risk tolerance, and investment strategy. A market with slightly lower returns but stronger year-round demand may outperform a higher-risk market over the long run.
Best Places to Invest in Short-Term Rentals in the US
The markets below combine strong earning potential, reasonable acquisition costs, and relatively healthy demand, based on the latest available public data.
Keep in mind that no ranking is permanent. Local regulations, home prices, and travel demand change every year. Use this list as a starting point, then verify current numbers before investing.
| Rank | Mercado | Estimated Cap Rate | Median Home Price | Ocupación | ADR | Mejor para |
|---|---|---|---|---|---|---|
| 1 | Jackson, MS | 15.95% | $84,672 | 57% | $118 | Maximum cash flow |
| 2 | Abilene, TX | 14.01% | $201,493 | 82% | $171 | Stable year-round income |
| 3 | Akron, OH | 11.66% | $139,633 | 61% | $133 | First-time investors |
| 4 | Montgomery, AL | 11.64% | $143,500 | 59% | $141 | Affordable entry |
| 5 | Port Arthur, TX | 10.38% | $124,353 | 67% | $96 | Business travel |
| 6 | Springfield, IL | 10.09% | $159,667 | 62% | $129 | Conservative investors |
| 7 | Charleston, WV | 9.80% | $158,399 | 59% | $131 | Long-term stability |
| 8 | Fredericksburg, TX | ~9.5% | ~$350K | ~65% | ~$225 | Lifestyle investment |
| 9 | Lebanon, PA | 8.68% | $281,650 | 60% | $203 | Higher nightly rates |
| 10 | Chattanooga, TN | ~8.5% | ~$250K | ~63% | ~$195 | Balanced growth |
| 11 | Lake Charles, LA | 8.41% | $212,333 | 59% | $151 | Energy-sector demand |
| 12 | Gatlinburg, TN | ~8.0% | ~$300K | ~64% | ~$210 | Cabin vacation rentals |
| 13 | Kissimmee, FL | ~7.5% | ~$340K | 50% | $193 | Disney tourism |
| 14 | Saint Paul, MN | 6.84% | $289,137 | 58% | $170 | Urban rentals |
| 15 | San Diego, CA | ~4.5% | ~$850K | 63% | $318 | Appreciation potential |
1. Jackson, Mississippi
Best for investors focused on cash flow
Jackson ranks first because of one simple reason: extremely low acquisition costs. The median home price is below $85,000, making it one of the most affordable STR markets in the country. Combined with an estimated 15.95% cap rate, it offers outstanding income potential relative to purchase price.
The trade-off is occupancy. At roughly 57%, you should expect noticeable seasonality and plan for slower months. Investors who rely on consistent monthly income may find stronger options elsewhere.
If your priority is maximizing return on invested capital rather than long-term appreciation, Jackson deserves serious consideration.
2. Abilene, Texas
Best overall balance of occupancy and profitability
Abilene combines something surprisingly rare: high occupancy with strong investment returns.
Occupancy approaches 82%, among the highest reported by AirDNA, while median home prices remain around $200,000. Demand comes from several independent sources, including Dyess Air Force Base, three universities, healthcare, and regional business travel. That diversification helps reduce seasonal swings.
Although home prices are higher than Jackson, many investors may prefer Abilene because cash flow tends to be more predictable throughout the year.
3. Akron, Ohio
Best value for first-time investors
Akron offers a relatively low purchase price without sacrificing demand. Homes remain affordable compared with many U.S. metro areas, while visitors are drawn by nearby Cuyahoga Valley National Park, historic attractions, and easy access to Cleveland.
An estimated 11.66% cap rate y 61% occupancy create a balanced investment profile. It may not produce the highest ADR, but it also avoids the premium prices seen in larger tourist destinations.
For investors buying their first vacation rental, Akron provides a practical mix of affordability, stable demand, and manageable competition.
4. Montgomery, Alabama
Best for affordable entry with steady demand
Montgomery offers one of the more accessible entry points among the top-ranked STR markets. With median home prices around $140,000 and an estimated 11.64% cap rate, the city provides attractive return potential without requiring a large upfront investment.
Demand is supported by several sources, including state government activity, Maxwell Air Force Base, healthcare, and tourism related to civil rights history. This mix creates more consistent demand than markets that depend entirely on seasonal vacation travelers.
However, investors should not overlook local regulations and neighborhood-level differences. A low purchase price does not automatically guarantee success. Properties close to major attractions, hospitals, government offices, or business districts are more likely to outperform the city average.
5. Port Arthur, Texas
Best for business-travel-focused STR investors
Port Arthur stands out because its short-term rental demand comes from a different source than traditional vacation markets.
The city is home to one of the largest petrochemical and industrial areas in the United States, creating steady demand from contractors, project workers, and business travelers. This helps support an estimated 67% occupancy rate, even though its ADR is lower than many tourism-driven markets.
With median home prices around $125,000 and an estimated 10.38% cap rate, Port Arthur offers attractive numbers for investors who understand the local economy.
The main limitation is revenue growth. Industrial demand can provide stability, but it may not generate the same pricing upside as a destination market with growing tourism.
6. Springfield, Illinois
Best for conservative investors seeking stability
Springfield is a good example of a market where consistency matters more than explosive growth.
As the state capital of Illinois and the home of major Abraham Lincoln attractions, Springfield benefits from a combination of government travel, historical tourism, conferences, and regional business activity. These multiple demand sources help support relatively stable occupancy throughout the year.
With an estimated 10.09% cap rate, median home prices below $160,000, and occupancy around 62%, Springfield offers a balanced risk profile.
It may not deliver the highest nightly rates in the country, but investors looking for predictable demand and lower acquisition costs may find it appealing.
7. Charleston, West Virginia
Best for affordable markets with diversified demand
Charleston combines affordability with several reliable demand drivers.
As West Virginia’s capital city, Charleston attracts government travelers, healthcare visitors, business professionals, and outdoor enthusiasts exploring the surrounding Appalachian region.
The market’s estimated 9.80% cap rate is supported by relatively low property prices, with median homes around $158,000. While occupancy is not among the highest on this list at approximately 59%, the lower entry cost helps maintain attractive returns.
Investors should evaluate individual neighborhoods carefully, as performance can vary significantly between properties. In smaller cities, location selection often matters more than the overall market ranking.
8. Fredericksburg, Texas
Best for lifestyle investors and premium vacation homes
Fredericksburg represents a different type of STR investment. Unlike low-cost cash flow markets, this Texas Hill Country destination attracts travelers willing to pay higher nightly rates for unique experiences.
Known for wineries, historic downtown, festivals, and nearby outdoor attractions, Fredericksburg has developed into one of Texas’s most recognized leisure destinations. Properties with strong design, amenities, and guest experiences can command premium pricing.
The estimated numbers show approximately 65% occupancy, around $225 ADR, and roughly 9.5% cap rate. However, higher property prices mean investors need stronger operations to achieve these returns.
This market is better suited for buyers who understand hospitality and are willing to compete on experience, not just price.
9. Lebanon, Pennsylvania
Best for higher ADR without major-market pricing
Lebanon benefits from its location between several major Pennsylvania attractions, including Hershey, Lancaster, and Harrisburg.
The market’s strongest feature is revenue potential. With an ADR around $200+ and annual revenue estimates above $40,000, properties can generate meaningful income without the acquisition costs seen in major tourist destinations.
The estimated 8.68% cap rate is lower than some smaller markets on this list, but the higher nightly rates provide room for revenue optimization through better design, pricing strategies, and guest experience.
For investors who want a balance between affordability and stronger booking revenue, Lebanon is worth evaluating.
10. Chattanooga, Tennessee
Best for investors seeking growth potential
Chattanooga has transformed from a traditional manufacturing city into one of the Southeast’s most attractive lifestyle destinations.
The city benefits from multiple demand drivers, including outdoor recreation, the Tennessee River, festivals, universities, and a growing technology sector. This diversity helps reduce reliance on a single tourism season.
With an estimated 8.5% cap rate, median home prices around $250,000, and occupancy near 63%, Chattanooga offers a middle ground between affordable cash-flow markets and expensive destination markets.
Investors should pay close attention to neighborhood selection. Properties near downtown, outdoor attractions, and high-demand areas typically have stronger revenue potential than properties competing mainly on price.
Chattanooga is best suited for investors who want a market with both current rental income and long-term growth potential.
11. Lake Charles, Louisiana
Best for investors targeting business and industrial demand
Lake Charles demonstrates why not all STR investments are driven by tourism.
The city’s economy is strongly connected to energy, manufacturing, and industrial projects, creating consistent demand from contractors, business travelers, and extended-stay guests.
With median home prices around $210,000, occupancy close to 60%, and an estimated 8.4% cap rate, Lake Charles offers a relatively affordable entry point compared with many traditional vacation destinations.
The main consideration is demand concentration. Industrial-driven markets can perform well when local economic activity is strong, but they may have less upside from leisure tourism.
Investors considering Lake Charles should analyze local employment trends and major projects before purchasing.
12. Gatlinburg, Tennessee
Best for vacation cabin investors
Gatlinburg represents the classic vacation rental model: a destination where guests travel specifically for leisure.
Located near Great Smoky Mountains National Park, one of the most visited national parks in the United States, the area attracts families, couples, and outdoor travelers throughout the year.
The market typically commands higher nightly rates, with ADR estimates around $200+, but competition is also significantly higher than in smaller cities. Successful properties usually differentiate through amenities such as mountain views, hot tubs, unique designs, and family-friendly features.
With estimated occupancy around 64% and cap rates near 8%, Gatlinburg may not offer the highest percentage returns on paper, but it benefits from proven tourism demand.
This market works best for investors who understand hospitality and are willing to compete on guest experience.
13. Kissimmee, Florida
Best for investors targeting major tourism demand
Kissimmee is one of the most recognizable short-term rental markets in the United States because of its proximity to Walt Disney World and Orlando’s theme park ecosystem.
The market benefits from massive visitor volume and strong ADR potential. However, popularity also creates challenges. Competition is intense, supply is high, and many properties compete for the same family vacation guests.
Estimated figures show around $190+ ADR, but occupancy is closer to 50% in some analyses, highlighting the importance of property positioning and pricing strategy.
Kissimmee can work well for investors who understand vacation-home operations, marketing, and guest experience. Simply buying a property near Disney does not guarantee strong returns.
14. Saint Paul, Minnesota
Best for urban STR investors
Saint Paul provides a different investment profile compared with traditional vacation destinations.
As part of the Twin Cities metropolitan area, the city benefits from business travel, universities, healthcare facilities, government activity, and major events. This creates a more diversified demand base than many seasonal markets.
With median home prices around $290,000, occupancy near 58%, and an estimated 6.8% cap rate, returns are lower than some smaller markets, but demand is supported by a large metropolitan economy.
Urban STR markets require careful attention to local regulations, neighborhood restrictions, and licensing requirements. Investors should confirm whether the specific property location allows short-term rentals before purchasing.
15. San Diego, California
Best for investors prioritizing premium demand and appreciation
San Diego represents the opposite end of the investment spectrum from low-cost markets like Jackson.
The city offers one of the strongest tourism ecosystems in the country, with beaches, attractions, conventions, and year-round outdoor activities supporting consistent demand. ADR can exceed $300, making it one of the highest-revenue markets on this list.
However, the investment math is much tighter. With median home prices approaching $850,000 and estimated cap rates around 4–5%, investors are paying a premium for location quality.
San Diego is generally better suited for investors who value long-term appreciation, portfolio diversification, or premium vacation rental positioning rather than maximum cash flow.
How to Choose the Right Short-Term Rental Market for Your Strategy
A market that works well for one investor may be a poor fit for another. Someone looking for monthly cash flow may prefer an affordable Midwest market, while another investor may accept lower returns in exchange for long-term appreciation or a personal vacation property.
Before choosing a market, decide what outcome matters most to you.
| Investment Goal | Markets That May Fit | What to Prioritize |
|---|---|---|
| Maximize cash flow | Jackson, MS; Akron, OH; Montgomery, AL | Low purchase price and strong cap rate |
| Build predictable income | Abilene, TX; Port Arthur, TX | Occupancy and demand stability |
| Own a vacation destination | Gatlinburg, TN; Fredericksburg, TX; Kissimmee, FL | Tourism strength and guest experience |
| Balance growth and returns | Chattanooga, TN; Springfield, IL | Affordability plus diversified demand |
| Focus on appreciation | San Diego, CA and major metro markets | Long-term real estate fundamentals |
1. Cash flow investors should look beyond the highest cap rate
High-return markets often attract the most attention, but a strong cap rate does not automatically mean a better investment.
Low-cost markets can generate excellent percentage returns, but they may also come with challenges such as:
- Lower ADR growth potential
- Higher dependence on local economic conditions
- Smaller guest pools
- Greater variation between neighborhoods
For these markets, successful investors usually win by controlling expenses, choosing the right property, and operating efficiently.
2. Lifestyle investors need to evaluate more than revenue
Vacation destinations such as Gatlinburg and Fredericksburg can be attractive because the property may also serve as a personal getaway.
However, personal use affects investment performance. Blocking high-demand weekends for your own stays can reduce annual revenue significantly.
If you choose a lifestyle market, evaluate:
- Peak-season pricing
- Competencia local
- Property amenities guests expect
- Whether personal usage fits your financial goals
3. Always verify regulations before making an offer
Market rankings provide a starting point, but regulations can change the investment equation completely.
Before purchasing, confirm:
- Whether short-term rentals are allowed at the property address
- Whether permits are required
- Whether there are annual limits or registration requirements
- Whether HOA or neighborhood rules restrict STR activity
A strong market with restrictive regulations may create more risk than a smaller market with clear operating rules.
Preguntas frecuentes
What is the best city to invest in short-term rentals in 2026?
There is no single best city for every investor. The right market depends on your investment strategy, budget, and risk tolerance.
For investors prioritizing cash flow, markets like Jackson, Mississippi, Akron, Ohio, y Montgomery, Alabama stand out because of their lower property prices and strong potential returns.
For investors looking for more stable demand, Abilene, Texas is attractive because of its high occupancy and multiple demand drivers.
For those focused on vacation rentals and long-term appreciation, established destinations such as Gatlinburg, Tennessee y San Diego, California may be better fits.
Are high cap rate short-term rental markets always the best investments?
No. A high cap rate is helpful, but it does not tell the entire story.
Some high-cap-rate markets have lower home prices but may also have:
- Lower occupancy rates
- Smaller tourism demand
- Limited revenue growth potential
- Greater dependence on local economic conditions
Investors should evaluate cap rate together with occupancy, ADR, demand sources, competition, and regulatory stability.
A slightly lower cap rate in a stronger market may provide more predictable long-term performance.
Should I invest in a tourist destination or a business-travel market?
Both models can work, but they have different advantages.
Tourist destinations such as Gatlinburg and Fredericksburg often provide higher ADR and strong seasonal demand. They usually require better guest experience, marketing, and property design to compete.
Business-travel markets such as Port Arthur or Abilene may offer more consistent weekday demand and less dependence on peak vacation seasons.
The better choice depends on whether you prefer maximizing nightly rates or building more stable occupancy.
Should I invest in a short-term rental market where I do not live?
Yes, but remote investing requires stronger systems.
Many successful STR investors own properties outside their local area. However, they usually rely on:
- Reliable cleaning teams
- Local maintenance contacts
- Comunicación automatizada con los huéspedes
- herramientas de precios dinámicos
- Real-time performance tracking
A strong operating system is especially important when you cannot personally handle guest issues or property problems.
How accurate are short-term rental market rankings?
Market rankings are useful for identifying opportunities, but they should not replace property-level research.
Most rankings rely on historical performance data such as occupancy, ADR, revenue, and home prices. These metrics can change because of:
- New regulations
- Increased competition
- Economic shifts
- Changes in travel behavior
Before buying, verify current rental rules, analyze comparable listings, and estimate your own property’s expected revenue.
What data should I use to evaluate a short-term rental market?
Professional investors usually combine multiple sources instead of relying on one platform.
Common data sources include:
- ADN aéreo for STR revenue estimates, occupancy, ADR, and market trends
- Beyond Pricing for pricing and demand insights
- Zillow, Redfin, or Realtor.com for property prices
- Local government websites for STR regulations
- Tourism boards for visitor trends and demand drivers
Combining rental data with real estate and regulatory information gives a more complete picture of investment potential.
Is it better to buy a short-term rental in an affordable market or an expensive destination?
It depends on your investment goals.
Affordable markets usually offer better cash flow because the purchase price is lower relative to rental income. They can be attractive for investors focused on monthly returns.
Expensive destinations often have stronger tourism demand and appreciation potential but usually produce lower cap rates because property prices are already high.
The best choice is the market where the expected return matches your financial goals and risk tolerance.
What should I check before buying a short-term rental in a new market?
Before purchasing, review five key areas:
- Local STR regulations: Confirm permits, licensing requirements, and operating restrictions.
- Revenue potential: Analyze comparable listings, occupancy, ADR, and seasonality.
- Property-level expenses: Include insurance, taxes, utilities, maintenance, cleaning, and management costs.
- Demand drivers: Look for tourism, business travel, universities, healthcare, or major employers.
- Competition level: Understand how many listings already operate in the area and what successful properties offer.
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