Best Markets for Airbnb Investing in 2026: Short-Term Rental ROI

Airbnb and short-term rental (STR) investing can generate 2-3x the income of traditional long-term rentals—if you're in the right market with the right regulations.

The best Airbnb markets balance strong tourism demand, reasonable regulations, high average daily rates (ADR), and year-round occupancy. Here are the 15 best markets for Airbnb investing in 2026.

What Makes a Great Airbnb Market?

1. Average Daily Rate (ADR)

How much you charge per night. Higher ADR = higher revenue.

2. Occupancy Rate

Percentage of nights booked. 60%+ is good; 70%+ is excellent.

3. Revenue Per Available Room (RevPAR)

ADR × Occupancy Rate. This is your real metric.

Example:

ADR: $250
Occupancy: 70%
RevPAR: $175/night or $5,250/month

4. Regulations

Some cities ban or heavily restrict STRs. Others embrace them. Know the rules before you buy.

5. Seasonality

Year-round demand is ideal. Seasonal markets can work if you nail the peak season.

6. Property Prices

Lower entry costs = better ROI. Expensive markets need very high ADR to justify the investment.

7. Tourism Infrastructure

Attractions, events, conferences, beaches, mountains, national parks, etc.

Top 15 Airbnb Markets for 2026

1. Gatlinburg/Pigeon Forge, Tennessee

Best overall short-term rental market

The Smoky Mountains area is the king of STR investing. Year-round tourism, no local income tax, cabin demand, and STR-friendly regulations.

Average ADR: $280
Occupancy rate: 68%
RevPAR: $190/night (~$5,700/month)
Median property price: $450,000 (cabins)
Regulations: Very STR-friendly
Seasonality: Year-round (peak summer + fall)
Annual gross revenue: $60,000-90,000
Net ROI: 12-18%

Why it's #1: Consistent demand, high ADR, low taxes, and STR-friendly local government. Investors can buy cabins with mountain views and charge premium rates.

2. Gulf Shores/Orange Beach, Alabama

Best beach market

Alabama's Gulf Coast offers white-sand beaches, low property taxes (0.41%), and strong vacation rental demand.

Average ADR: $320
Occupancy rate: 62%
RevPAR: $198/night (~$5,950/month)
Median property price: $500,000 (condos), $650,000 (homes)
Regulations: STR-friendly (license required)
Seasonality: Peak summer, moderate winter
Annual gross revenue: $65,000-95,000
Net ROI: 10-15%

Why it's #2: Beach demand + low taxes = strong [cash flow](/blog/net-operating-income-guide). Less regulation than Florida beaches.

3. Scottsdale/Phoenix, Arizona

Best desert market

Scottsdale attracts snowbirds, spring training baseball fans, and year-round golf tourists.

Average ADR: $275
Occupancy rate: 65%
RevPAR: $179/night (~$5,370/month)
Median property price: $550,000
Regulations: STR-friendly (registration required)
Seasonality: Peak winter/spring
Annual gross revenue: $55,000-80,000
Net ROI: 8-12%

Why it's #3: Year-round weather, strong winter demand, and wealthy travelers who book longer stays.

4. Destin/30A, Florida

Best luxury beach market

The Emerald Coast (Destin, Santa Rosa Beach, 30A) commands some of the highest ADRs in the Southeast.

Average ADR: $380
Occupancy rate: 58%
RevPAR: $220/night (~$6,600/month)
Median property price: $700,000+
Regulations: Moderate (county permits required)
Seasonality: Peak summer
Annual gross revenue: $70,000-110,000
Net ROI: 7-11%

Why it's #4: Premium beach market with luxury clientele. Higher entry cost but strong ADR.

5. Breckenridge/Summit County, Colorado

Best ski market

Breckenridge offers year-round appeal: winter skiing, summer hiking/biking. High ADR year-round.

Average ADR: $350
Occupancy rate: 60%
RevPAR: $210/night (~$6,300/month)
Median property price: $750,000+
Regulations: STR-friendly (license required)
Seasonality: Dual season (winter ski, summer outdoor)
Annual gross revenue: $70,000-100,000
Net ROI: 6-10%

Why it's #5: Dual-season demand reduces risk. Wealthy travelers accept high ADR.

6. Joshua Tree/Palm Springs Area, [California](/blog/california-heloc-guide)

Best desert escape

Joshua Tree National Park area exploded during COVID and stayed strong. Unique properties (domes, modern cabins) command premium rates.

Average ADR: $300
Occupancy rate: 62%
RevPAR: $186/night (~$5,580/month)
Median property price: $500,000
Regulations: STR-friendly (varies by city)
Seasonality: Peak winter/spring
Annual gross revenue: $60,000-85,000
Net ROI: 8-13%

Why it's #6: Unique properties perform exceptionally well. Instagram-friendly = free marketing.

7. Asheville, North Carolina

Best mountain town

Asheville blends Blue Ridge Mountain tourism with a vibrant downtown, breweries, and arts scene.

Average ADR: $250
Occupancy rate: 64%
RevPAR: $160/night (~$4,800/month)
Median property price: $450,000
Regulations: Moderate (permit required, some restrictions)
Seasonality: Year-round (peak fall foliage)
Annual gross revenue: $50,000-75,000
Net ROI: 9-13%

Why it's #7: Consistent demand, strong local culture, and reasonable property prices.

8. Myrtle Beach, South Carolina

Best budget beach market

Myrtle Beach attracts families looking for affordable beach vacations. High volume, moderate ADR.

Average ADR: $200
Occupancy rate: 68%
RevPAR: $136/night (~$4,080/month)
Median property price: $350,000
Regulations: STR-friendly (license required)
Seasonality: Peak summer, quiet winter
Annual gross revenue: $45,000-65,000
Net ROI: 10-14%

Why it's #8: Lower entry cost and strong occupancy make up for lower ADR.

9. Nashville, Tennessee

Best urban market

Nashville's music scene, bachelorette parties, and conventions create year-round demand.

Average ADR: $240
Occupancy rate: 66%
RevPAR: $158/night (~$4,750/month)
Median property price: $450,000
Regulations: Restricted (permit moratorium in some areas; check current rules)
Seasonality: Year-round
Annual gross revenue: $50,000-75,000
Net ROI: 8-12%

Why it's #9: Year-round demand and strong ADR, but regulations are tightening. Buy where permits are still allowed.

10. Moab, Utah

Best national park market

Moab is the gateway to Arches and Canyonlands National Parks. Outdoor enthusiasts drive demand.

Average ADR: $280
Occupancy rate: 62%
RevPAR: $174/night (~$5,220/month)
Median property price: $500,000
Regulations: STR-friendly (license required)
Seasonality: Peak spring/fall, moderate summer/winter
Annual gross revenue: $55,000-80,000
Net ROI: 8-12%

Why it's #10: National park proximity = consistent demand. Outdoor recreation is recession-resistant.

11. San Antonio (near River Walk), Texas

Best Sunbelt urban market

San Antonio's River Walk, Alamo, and convention center create steady STR demand.

Average ADR: $210
Occupancy rate: 67%
RevPAR: $141/night (~$4,230/month)
Median property price: $320,000
Regulations: STR-friendly (Type 2 license required)
Seasonality: Year-round
Annual gross revenue: $45,000-65,000
Net ROI: 10-14%

Why it's #11: Affordable entry, year-round demand, and landlord-friendly Texas laws.

12. Sedona, Arizona

Best luxury desert market

Sedona's red rocks attract high-end travelers looking for spa retreats and outdoor adventure.

Average ADR: $330
Occupancy rate: 58%
RevPAR: $191/night (~$5,730/month)
Median property price: $700,000+
Regulations: STR-friendly (permit required)
Seasonality: Year-round (peak spring/fall)
Annual gross revenue: $60,000-90,000
Net ROI: 6-10%

Why it's #12: Premium market with wealthy clientele. High ADR justifies higher property prices.

13. Branson, Missouri

Best family entertainment market

Branson is the "Las Vegas of the Ozarks"—family shows, Silver Dollar City, and Table Rock Lake.

Average ADR: $180
Occupancy rate: 64%
RevPAR: $115/night (~$3,450/month)
Median property price: $280,000
Regulations: Very STR-friendly
Seasonality: Peak summer/holidays
Annual gross revenue: $38,000-55,000
Net ROI: 11-15%

Why it's #13: Very affordable entry and strong occupancy. Family market is stable.

14. Outer Banks, North Carolina

Best East Coast beach market

The Outer Banks offer miles of beaches, historic sites, and strong vacation rental demand.

Average ADR: $320
Occupancy rate: 58%
RevPAR: $186/night (~$5,580/month)
Median property price: $600,000
Regulations: STR-friendly (county permits)
Seasonality: Peak summer
Annual gross revenue: $60,000-85,000
Net ROI: 7-11%

Why it's #14: Established vacation rental market with strong summer demand.

15. Lake Tahoe, California/Nevada

Best dual-season lake market

Lake Tahoe offers skiing in winter and lake activities in summer. Premium ADR year-round.

Average ADR: $380
Occupancy rate: 55%
RevPAR: $209/night (~$6,270/month)
Median property price: $900,000+
Regulations: Strict (limited permits in some areas)
Seasonality: Year-round (winter ski, summer lake)
Annual gross revenue: $65,000-95,000
Net ROI: 5-8%

Why it's #15: Premium market with dual-season appeal, but high entry cost and regulations are challenging.

Airbnb Regulations: What to Know

STR-Friendly Markets:

Gatlinburg, TN
Gulf Shores, AL
Scottsdale, AZ
Branson, MO
Myrtle Beach, SC

Characteristics: Simple licensing, minimal restrictions, local governments support tourism.

Moderate Regulation Markets:

Asheville, NC (permit required, some zoning restrictions)
Destin, FL (county registration)
Breckenridge, CO (license and occupancy limits)

Characteristics: Permits required, some zoning rules, but STRs are allowed.

Heavily Restricted Markets (Avoid or Buy Carefully):

New York City (illegal except in specific circumstances)
San Francisco (strict caps, lottery system)
Los Angeles (strict rules, enforcement)
Austin, TX (Type 2 licenses frozen in many areas)
Nashville, TN (permit moratorium in some neighborhoods)

Characteristics: Limited permits, heavy enforcement, risk of rule changes.

How to Research Local Regulations:

Check city/county websites for STR ordinances
Call local planning departments and ask directly
Use AirDNA or Rabbu to see active listings (if there are hundreds, it's likely allowed)
Join local STR investor groups on Facebook
Hire a local [real estate attorney](/blog/how-to-build-real-estate-team) for big purchases

How to Calculate Airbnb ROI

Example: Gatlinburg Cabin

Purchase:

Property price: $450,000
Down payment (25%): $112,500
[Closing costs](/blog/homebuying-closing-process): $13,500
Furniture/setup: $25,000
Total cash invested: $151,000

Financing:

Loan: $337,500
Interest rate: 7.5%
Monthly P&I: $2,358

Income (Annual):

ADR: $280
Occupancy: 68% (248 nights)
Gross revenue: $69,440

Expenses (Annual):

Mortgage: $28,296
Property tax (0.64%): $2,880
Insurance: $2,500
Utilities: $3,600
Cleaning (@ $100 x 100 turnovers): $10,000
Supplies/toiletries: $2,000
Maintenance: $4,000
[Property management](/blog/property-management-complete-guide) (20%): $13,888
HOA: $0
Total expenses: $67,164

Cash Flow:

Gross revenue: $69,440
Expenses: $67,164
Annual cash flow: $2,276

ROI Calculation:

Cash flow: $2,276
Principal paydown: ~$4,500
[Appreciation](/blog/home-appreciation-explained) (3%): $13,500
Total return: $20,276
ROI on $151,000: 13.4%

Not bad! And if you self-manage, you save $13,888/year (bringing ROI to 22.6%).

Tips for Airbnb Success

1. Unique Properties Outperform

Cabins, domes, A-frames, modern designs, treehouses, etc. command 20-40% higher ADR than generic homes.

2. Invest in Professional Photos

Spend $500-1,000 on professional photography. It pays back immediately.

3. Target Dual-Season Markets

Year-round demand = stable income. Purely seasonal markets are risky.

4. Automate Everything

Smart locks (no key exchanges)
Automated messaging (check-in instructions, etc.)
Dynamic pricing tools (PriceLabs, Wheelhouse)

5. Offer Unique Amenities

Hot tub ($5,000 investment, +$50/night ADR)
Fire pit
Game room
High-end coffee setup
Fast WiFi (Starlink if remote)

6. Respond Fast

Airbnb rewards hosts who respond within 1 hour with better search rankings.

7. Get Reviews Early

First 5-10 reviews are critical. Offer small discounts to early guests in exchange for honest reviews.

8. Price Dynamically

Use PriceLabs or Wheelhouse to adjust pricing based on demand. Don't set-it-and-forget-it.

9. Hire Local Cleaners

You need reliable cleaners for turnover. Budget $80-150 per clean depending on size.

10. Know Your Peak Season

Block personal use during peak season. Maximize revenue when demand is highest.

Airbnb vs. Long-Term Rental Income

Example Property: $400,000 home

Long-Term Rental:

Rent: $2,200/month
Annual income: $26,400
Occupancy: 95%
Expenses: Lower (no cleaning, less turnover)

Airbnb:

ADR: $250
Occupancy: 65% (237 nights)
Annual income: $59,250
Expenses: Higher (cleaning, supplies, turnover)

Net income comparison (after expenses):

Long-term rental: ~$18,000/year net
Airbnb: ~$30,000/year net

Airbnb generates 1.7x the income but requires more work.

Markets to Avoid

Oversaturated Markets:

Miami (too much supply)
Orlando (hotel competition)
Vegas (casino hotels dominate)

Heavily Regulated Markets:

NYC (mostly illegal)
SF (lottery system for permits)
LA (strict enforcement)

Declining Tourism:

Rust Belt cities (Detroit, Buffalo)
Post-industrial towns

Final Thoughts

The best Airbnb markets in 2026:

Best overall: Gatlinburg, TN Best beach: Gulf Shores, AL or Destin, FL Best ski: Breckenridge, CO Best desert: Scottsdale, AZ or Joshua Tree, CA Best budget entry: Branson, MO or Myrtle Beach, SC

Key factors:

Regulations – Make sure STRs are allowed
Demand – Year-round > seasonal
ADR – Target $200+ for most markets
Occupancy – 60%+ is good, 70%+ is excellent
RevPAR – This is your real metric (ADR × occupancy)

Research regulations first, run the numbers carefully, and invest in unique properties with great photos. Airbnb can generate serious income, but it's more work than long-term rentals.

If you're willing to put in the effort, the returns can be 2-3x higher than traditional rentals.

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Best Markets for Airbnb Investing in 2026 - Short-Term Rental ROI

Key Takeaways