Starting an STR Business

Starting an STR Business

Industry Insights

Industry Insights

Best Cities for Airbnb Investment 2025

Short-term rentals have become a more profitable strategy than long-term rentals. If you plan to buy a rental property in the US, you will be interested in this article, prepared together with Mashvisor.

Best Cities for Airbnb Investment 2025
Best Cities for Airbnb Investment 2025

In the past decade, short-term rentals have become a more profitable strategy for most markets worldwide than renting property long term. But not all markets are created equal, so it’s crucial to study the property’s location to ensure it’s optimal for vacation rental investment.

If you plan to buy a short-term rental property in the US to make money from real estate this year, you will want to know where the best cities for Airbnb investment in 2025 are located.

Any effective investment strategy should be based on reliable data to help you make an informed decision, so you need actionable insights from a reliable source.

Mashvisor, a company that helps real estate investors find lucrative investment properties through an online AI analytics platform, has analyzed Airbnb data from the top US markets.

They have selected the best locations for Airbnb investment based on certain criteria using key Airbnb metrics, such as occupancy rate, daily rate, monthly rental income, and cash-on-cash return.

Let’s examine their findings to discover the best places to buy vacation rental property in the US in 2025.

Top 25 Cities by Airbnb Rental Income

Below is a table that provides data about the top 25 vacation rental investment locations in the US based on monthly rental income (as of March 2025).

State

City

County

Median Property Price

Monthly Rental Income

Cash on Cash Return (%)

Daily Rate ($)

Occupancy Rate (%)

HI

Kapolei

Honolulu

1 357 784

12 590

6.71

632

56

CA

Napa

Napa

3 024 967

11 531

3.68

493

70

CA

Sunset Beach

Orange

3 653 000

10 983

1.54

319

70

CA

Villa Park

Orange

2 969 600

10 713

2.07

230

84

CA

West Hills

Los Angeles

1 159 479

10 088

5.93

305

80

FL

Key West

Monroe

2 072 283

9 869

3.72

512

58

CA

Valley Village

Los Angeles

1 922 990

9 800

4.56

343

82

HI

KOLOA

Kauai

2 789 593

9 724

3.73

431

66

CA

Topanga

Los Angeles

2 114 571

9 647

3.15

305

65

CA

Westlake Village

Ventura

1 861 665

9 363

3.65

316

78

CA

Woodland Hills

Los Angeles

1 221 986

8 837

5.09

301

80

CA

Winnetka

Los Angeles

1 176 575

8 780

6.27

322

81

FL

St. George Island

Franklin

2 072 800

8 758

3.6

426

61

CA

Sonoma

Sonoma

2 942 500

8 719

2.71

606

53

CA

Windsor Hills

Los Angeles

1 646 244

8 438

2.97

232

81

CA

Santa Barbara

Santa Barbara

2 049 741

8 398

2.89

399

63

CA

San Rafael

Marin

1 653 632

8 334

3.31

213

69

CA

Ventura

Ventura

1 384 457

8 208

4.95

261

84

CO

Mt. Crested Butte

Gunnison

3 359 889

8 159

2.05

349

42

FL

Big Coppitt

Monroe

930 571

8 125

6.56

399

72

CA

Encinitas

San Diego

1 668 019

8 115

3.38

430

57

CA

Van Nuys

Los Angeles

1 050 157

8 058

5.89

340

83

CA

Dana Point

Orange

3 789 445

8 041

1.57

383

57

CA

Redondo Beach

Los Angeles

1 788 388

8 021

2.76

523

55

FL

Anna Maria

Manatee

2 965 857

8 005

1.32

517

51

Note that most cities with the highest monthly Airbnb income included on this list are in California. There are also seven cities in Hawaii and one city in Florida. There is a high demand for short-term rentals in these states.

As you can see, all the cities with the highest monthly Airbnb income have median property prices of a few million dollars. Such prices might be too high for aspiring Airbnb hosts.

That’s why Mashvisor also created a list of the cities based on the Airbnb cash-on-cash return. This metric is used to evaluate an investment property’s current or future profitability. It’s calculated by taking the total rental income generated by a property and dividing it by the initial cash investment made to buy that property.

Best Cities for Airbnb Investment in the US

Here is a list of the top 25 US cities with the highest Airbnb cash-on-cash return rate, according to Mashvisor’s data.  

Table2. Top 25 Cities by Airbnb COC Return

State

City

County

Median Property Price ($)

Monthly Rental Income

Cash on Cash Return (%)

Daily Rate ($)

Occupancy Rate (%)

PA

Brighton Heights

Allegheny

240 883

2 825

7.45

162

49

LA

Marrero

Jefferson

356 738

3 860

7.43

239

56

MO

Columbia

Boone

412 065

2 615

7.34

167

52

NV

Silver Springs

Lyon

321 745

3 394

7.3

187

60

FL

Zephyrhills

Pasco

339 905

3 861

7.26

132

68

WI

Wisconsin Dells

Adams

426 908

4 602

7.24

311

45

FL

Sweetwater

Miami-Dade

515 129

5 418

7.21

194

70

NC

Almond

Graham

326 880

3 537

7.19

238

49

OH

Geneva

Ashtabula

364 800

3 920

7.17

239

41

MI

Hazel Park

Oakland

258 644

3 088

7.16

172

53

OK

Warr Acres

Oklahoma

225 880

2 645

7.1

154

45

SC

Cayce

Lexington

309 522

3 105

7.05

144

52

FL

Bonifay

Holmes

461 765

4 469

7.01

265

49

VA

Madison Heights

Amherst

292 644

2 768

6.99

141

53

KY

Bowling Green

Warren

467 020

4 110

6.93

132

45

CA

Visalia

Tulare

443 544

4 523

6.9

164

86

FL

Winter Haven

Polk

395 815

4 019

6.86

162

77

FL

Destin

Okaloosa

339 241

3 362

6.82

279

52

FL

Hialeah Gardens

Miami-Dade

541 000

5 039

6.8

166

67

LA

Gretna

Jefferson

350 993

3 631

6.79

263

45

TX

River Oaks

Tarrant

307 009

3 411

6.78

204

58

SC

West Columbia

Lexington

310 604

3 123

6.76

163

53

WV

Fayetteville

Fayette

386 338

3 556

6.74

209

47

HI

Kapolei

Honolulu

1 357 784

12 590

6.71

632

56

FL

Sun City Center

Hillsborough

300 281

3 235

6.67

246

56

Mashvisor emphasizes that although these cities have a lower rental income range than those included in the previous list, they have low median property prices. That makes vacation rental properties in these cities accessible for beginner investors.

Moreover, the high cash-on-cash returns (or the cash flow divided by the amount of cash initially invested) mean the investors can recoup their investments faster.

The higher the cash-on-cash return, the healthier the property investment. That’s why the top 25 cities by Airbnb COC return can be considered the best cities for Airbnb investment in the US.

Things to Consider When Choosing the Best Markets to Invest in Airbnb Rental Property

Of course, these lists provide only a broad view based on average values. So it’s essential to consider more specific factors when deciding whether you should buy property in any of the top vacation rental investment locations in the US.

Essential factors to consider are supply and demand and competition. Let’s look at this table that showcases the ten states with the highest number of active Airbnb listings.

Table 3. 10 States with the Highest Airbnb Saturation

State

Median Property Price

Number of Listings

Monthly Rental Income ($)

Cash on Cash Return (%)

Cap Rate (%)

Daily Rate ($)

Occupancy Rate (%)

FL

752 903

104 308

3 553

3.26

3.31

220

58

CA

1 207 812

55 441

5 008

3.06

3.08

263

61

TX

482 978

47 749

2 866

3.49

3.56

193

51

NC

533 967

35 634

3 152

4.07

4.13

181

56

NY

884 144

27 319

4 418

3.12

3.16

290

47

CO

972 920

22 542

3 627

3.36

3.4

299

54

AZ

719 091

20 912

3 234

3.39

3.44

192

56

SC

503 392

20 382

3 000

3.85

3.91

263

48

WA

690 383

18 763

3 484

3.15

3.19

195

62

TN

523 783

17 559

2 853

3.87

3.93

266

51

The interesting thing to note here is that these US states have lower cash-on-cash returns. Mashvisor explains that it’s because their markets are oversaturated. So it’s always important to analyze the market data before making an investment decision instead of just looking at whether an area gets a lot of tourists.

Finding a location that is not too saturated with vacation rentals is crucial. Before you buy a rental property for your STR business, you should study recent Airbnb data and analytics and research the Airbnb regulations regarding licensing and taxing in the city of your choice. Make sure that it’s legal to rent out on Airbnb in this city.

Then you need to perform a neighborhood comparison to determine areas that have the potential to generate high income monthly. You should look for neighborhoods that fit your budget and consider such statistical data as Airbnb rental income, occupancy rate, and cash-on-cash return.

When you find the area where Airbnb is most profitable in the city, you can start searching for an investment property that offers high ROI when rented on a short-term basis.

What’s Next?

Making money on Airbnb starts with buying a property in a market profitable for short-term rentals. If you want to join the millions of successful Airbnb hosts, we hope our article will help you better understand where to look for a top-performing rental property to maximize your ROI.

But no matter which of the best cities for Airbnb investment 2025 you choose for buying your next STR property, it’s critical to prepare it for the rental business. Our free guide will give you hands-on advice and save you from unnecessary operational expenses.

As a host, you’ll have a lot of responsibilities, so you’ll need powerful vacation rental software to automate your processes and increase the efficiency of your business.

Hospitable does everything you would expect from vacation rental management software and can help you automate almost every aspect of your STR business. We’ll protect you from double bookings, keep your pricing in sync between multiple platforms, schedule messages based on triggers and events, streamline team management, and help you create your own direct booking website in minutes.

Still, we have a few unique features to surprise you:

With Hospitable, you can simplify your hosting routine, streamline your operations, manage all your listings in one place hassle-free, and save tons of time. It’ll be easier to become a successful Airbnb host, provide guests an excellent experience, and scale your short-term rental business faster than your competitors.

Final Thought

The United States offers many opportunities for aspiring real estate investors, although not all locations are optimal for investing in short-term rentals. That’s why it’s essential to do thorough research to find areas that are best for investing in Airbnb.

Hopefully, the list of the best cities for Airbnb investment in the US will help you find the right property in the right location. When doing your research, you should also ensure that your preferred city is a popular tourist destination and check the other metrics, such as monthly rental income, occupancy rate, and cash-on-cash return.

9 Solutions to Reduce Operational Costs

Discover the simple solutions to prepare your place for short-term rentals and reduce operational costs in your business.

Ebook cover

9 Solutions to Reduce Operational Costs

Discover the simple solutions to prepare your place for short-term rentals and reduce operational costs in your business.

Ebook cover

9 Solutions to Reduce Operational Costs

Discover the simple solutions to prepare your place for short-term rentals and reduce operational costs in your business.

Ebook cover
Continue reading
airbnb statistics by city

Industry Insights

Mar 20, 2025

Airbnb Statistics by City in the US 2025
airbnb statistics by city

Industry Insights

Mar 20, 2025

Airbnb Statistics by City in the US 2025
airbnb statistics by city

Industry Insights

Mar 20, 2025

Airbnb Statistics by City in the US 2025
Airbnb investment

OTAs

Starting an STR Business

Jun 17, 2025

Airbnb Investment: 101 Guide
Airbnb investment

OTAs

Starting an STR Business

Jun 17, 2025

Airbnb Investment: 101 Guide
Airbnb investment

OTAs

Starting an STR Business

Jun 17, 2025

Airbnb Investment: 101 Guide

Table of contents

Top 25 Cities by Airbnb Rental Income
Best Cities for Airbnb Investment in the US
Things to Consider When Choosing the Best Markets to Invest in Airbnb Rental Property
What’s Next?
Sign up for our monthly newsletter
Sign up for our monthly newsletter
Sign up for our monthly newsletter

Subscribe for updates

Get insightful content delivered direct to your inbox. Once a month. No spam – ever.

Subscribe for updates

Get insightful content delivered direct to your inbox. Once a month. No spam – ever.

Subscribe for updates

Get insightful content delivered direct to your inbox. Once a month. No spam – ever.