There are many attractions to launch short-term rental businesses at buzzy destinations such as Destin and Bale in Colorado, but new reports show that all of America and some of the medium-sized cities are the best places to start It might be.
January, Air Donna We released a report ranking the best places to invest in short-term rentals, finding small cities and rural areas have increased by 16%. Short-term rental lists, medium-sized cities, increased by 10.3%.
“We have to look at geographical diversity,” said Jamie Lane, Airdna's SVP of Analytics and who tells CNBC Make. “There are investment opportunities across the US and we don't have quarantined in one region, but we can dig into different markets.”
To rank cities, Airdna analyzed over 540,000 properties for sale as of January 1, 2025 and calculated the potential rental income for each property compared to the list price.
Some of the other factors considered were revenue growth per short-term rental list over the past year and number of rentals booked.
“If you dig into the best places to invest, they tend to be areas where there are not many hotels in stock,” Lane said. “We have seen the occupation or average rentals that short-term rentals can make money as people search for new areas to travel to continue to increase.”
Illinois and Ohio both show minimal high housing values, with two cities in each state ranking in Airdna's top 10 list.
“There are areas in these markets in particular that tend to have large industries like healthcare, which are very positive for short-term rental demand,” says Lane. “It helps drive the demand for temporary housing in these areas, doctors, nurses, and even patients.”
Peoria, Illinois is the perfect place to invest in short-term rentals
Average revenue potential: $31,131
Airdna ranked Peoria, Illinois as the best place to invest in short-term rentals. Midwest cities' short-term rental list growth from 2023 to 2024 was 21.1% with a total yield of 15.3%. Peoria also occupies 58.9%.
Peoria is where the average list earns more than last year, Lane says.
“The market is still insufficient and there is more supply coming in. That supply can be absorbed into the market,” he adds.
“People are still renting them, but they're not causing any negative impact on existing operators.”
Peoria, Illinois
Dave5957 | istock | Getty Images
Peoria is considered relatively inexpensive and has sub-average costs such as transportation and utilities. US news and global reports.
According to 2024, it also has the highest property tax in the country compared to the market value of a home. SmartAsset Report. Homeowners pay 2.64% of the value of their homes at the highest annual property tax in the country.
The median amount spent on property taxes by the owners on homes occupied was $4,455 a year, while the median home value in Peoria was $168,900.
10 Best Places to Invest in Short-Term Rentals
- Peoria, I'm sick.
- Fairbanks, Alabama.
- Akron, Ohio
- Columbus, Georgia.
- Crescent City, California.
- Shreveport, LA.
- Page, Aliz.
- Rockford, sick.
- Dayton, Ohio
- Frankfort, Kentucky.
Fairbanks, Alaska ranks second best place to invest in short-term rentals.
The average revenue chance is $49,459, but the total yield is 15.1% and the occupancy rate is 66.5%.
Fairbanks, Alaska
Walter Bibikow | DigitalVision | Getty Images
Lane says Fairbanks has multiple demand drivers. There are many tourism in the summer, especially directed towards the state's national parks. There are also many different industries in the city.
“The oil and gas market is big, so many workers have come in for several months, which is where short-term rentals are very popular for workers,” he says.
“Temporary housing can be offered in the short term [rental] It's an industry, essentially, it allows you to rent for several months at a time, as opposed to people staying at a company that brings hotels or trailers. ”
Fairbanks is Alaska's second largest city. During the winter, it is a hot spot for those who want to see the Northern Lights.
The city features Fairbanks University, the University of Alaska, and an international airport.
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