“`html

Top 10 Best U.S. Cities to Invest in Short-Term Rentals

Investing in short-term rentals through platforms like Airbnb and Vrbo continues to be a profitable strategy for real estate investors. Whether you’re looking for a vacation rental or a steady stream of passive income, choosing the right location is crucial. In 2025, several cities in the U.S. stand out as top markets for short-term rental investment.

According to new data from AirDNA, these cities offer the best combination of high occupancy rates, strong nightly rates, and growing traveler demand. Below, we’ll explore the top 10 U.S. cities to invest in short-term rentals in 2025.

1. Phoenix, Arizona

Phoenix has become one of the best markets for short-term rentals, thanks to its warm climate, steady tourism, and booming real estate market. With major events like spring training and a growing population, short-term rentals see consistent demand year-round.

Why Invest in Phoenix?

• High occupancy rates due to year-round sunshine and sporting events.
• Affordable property prices compared to other major U.S. cities.
• Increasing demand from both business and leisure travelers.

2. Nashville, Tennessee

Known for its vibrant music scene and cultural attractions, Nashville remains a hotspot for short-term rental investors. With tourism at an all-time high, demand for vacation rentals remains strong.

Why Invest in Nashville?

• Music and entertainment draw millions of tourists each year.
• Thriving short-term rental market despite regulatory challenges.
• Growing corporate presence increasing business travel demand.

3. Orlando, Florida

As the theme park capital of the world, Orlando consistently ranks as one of the most profitable cities for vacation rentals. With year-round tourism and family-friendly attractions, occupancy rates remain high.

Why Invest in Orlando?

• Consistently strong demand due to major attractions like Disney World and Universal Studios.
• Competitive average daily rates compared to other vacation destinations.
• Short-term rental-friendly policies in surrounding areas.

4. Austin, Texas

Austin’s reputation as the “Live Music Capital of the World” and its growing tech industry make it a great city for short-term rentals. With consistent events and festivals, occupancy rates remain high throughout the year.

Why Invest in Austin?

• Strong event-based tourism including SXSW and ACL Festival.
• Thriving tech industry bringing an influx of business visitors.
• Relaxed short-term rental regulations in some areas.

5. San Diego, California

San Diego’s perfect weather, stunning beaches, and strong vacation rental demand make it an excellent investment choice for Airbnb hosts.

Why Invest in San Diego?

• Year-round tourism driven by beaches, theme parks, and outdoor activities.
• High average daily rates due to luxury coastal properties.
• Consistent demand from international travelers.

6. Charleston, South Carolina

Charleston is a Southern gem known for its historic charm and beautiful waterfront. Visitors flock to its cobblestone streets and historical sites, making rentals highly desirable.

Why Invest in Charleston?

• Steady tourism growth thanks to its rich history and beach proximity.
• Rising nightly rates as the city’s popularity increases.
• Limited hotel supply allows short-term rentals to flourish.

7. Denver, Colorado

With a strong mix of adventure tourism and business travelers, Denver is a great place to invest in short-term rentals. Nearby ski resorts also drive guest demand.

Why Invest in Denver?

• Growing tech hub leading to increased business travel.
• Outdoor adventure tourism attracting year-round visitors.
• Competitive short-term rental rates with solid profitability.

8. Miami, Florida

Miami is one of the hottest short-term rental markets in the U.S., with its beaches, nightlife, and international appeal ensuring high occupancy rates.

Why Invest in Miami?

• Rising demand for vacation homes due to warm weather and entertainment.
• Luxury rental market allowing for premium nightly rates.
• International visitor appeal, especially from South America and Europe.

9. Gatlinburg, Tennessee

Gatlinburg, nestled in the Smoky Mountains, is a vacation rental hotspot due to its proximity to one of the most visited national parks in the U.S.

Why Invest in Gatlinburg?

• Tourism driven by Great Smoky Mountains National Park.
• Strong profitability on cabin-style accommodations.
• Limited hotel competition, allowing short-term rentals to thrive.

10. Myrtle Beach, South Carolina

Myrtle Beach remains a tourist favorite, making it an excellent place to invest in a vacation rental. Its famous boardwalk and golf courses bring in millions of visitors each year.

Why Invest in Myrtle Beach?

• Affordable real estate prices compared to other beach destinations.
• High seasonal demand during summer months.
• Growing vacation rental market as travelers seek alternatives to hotels.

Final Thoughts

Investing in short-term rentals can be highly profitable if you choose the right city. The best markets tend to have high demand, strong occupancy rates, and attractive property prices.

Whether you’re looking to invest in a bustling urban center like Nashville or a scenic retreat like Gatlinburg, these ten cities offer some of the best opportunities for Airbnb and Vrbo hosts in 2025.

Before purchasing a short-term rental property, always check local regulations, analyze potential profitability, and consider the costs of property management. With the right strategy, these cities can offer a lucrative investment for years to come.

“`