Top U.S. Cities for Airbnb Investment

02/10/2025

Industry Insights

Investors in 2025 are eyeing U.S. cities where high travel demand intersects with hospitable regulations and solid real estate fundamentals. From cosmopolitan urban centers to leisure getaways, these destinations pair lifestyle appeal with pro-investor governance. Sophisticated buyers – luxury brokers, development executives, and high-net-worth individuals – are targeting markets that offer not just strong rental income, but also long-term appreciation in value. Below we explore leading urban hotspots, resort towns, and emerging second-tier metros that exemplify this balance, with an emphasis on jurisdictions that welcome short-term rentals.

Urban Tourism Hotspots with Favorable Policies

Major urban destinations can be short-term rental goldmines, provided local laws allow investors to tap their immense visitor volumes. The ideal city combines year-round tourism – conventions, business travel, and leisure events – with a regulatory framework that permits non-owner-occupied rentals or at least offers workable licensing. High-growth Sun Belt metros are especially attractive: many have pro-business climates and soaring populations fueling real estate appreciation. By contrast, some large cities (like New York or San Francisco) draw millions of travelers but impose strict primary-residence rules or outright bans, underscoring the importance of focusing on landlord-friendly jurisdictions. Below are top urban markets marrying visitor appeal with relatively flexible short-term rental (STR) regulations:

Miami, Florida

Why It’s Attractive: Miami is an iconic global hub that welcomes over 24 million visitors each year ( BNBcalc ). Tourists and executives alike flock to its beaches, nightlife, and cultural festivals (Art Basel, Miami Food & Wine, etc.), keeping demand high even in summer off-peak. The city’s travel infrastructure – a major international airport and world-class cruise port – feeds a steady stream of guests. Regulatory Climate: Florida’s state legislature has long shielded short-term rentals from onerous local bans. In fact, a 2011 law prohibits cities from outlawing vacation rentals outright ( Avalara ). Recent state measures in 2022 reinforced this, restricting local governments from any blanket bans on STRs ( BNBcalc ). While Miami Beach enforces its own zoning restrictions (largely limiting rentals in quiet residential areas), the broader Miami metro remains full of areas where luxury condos and villas can legally operate as short-term rentals . This supportive environment gives Miami a clear edge over other global cities that have shut out Airbnb. Investor Outlook: High-net-worth investors are drawn not only to Miami’s cash-flow potential (helped by high occupancy – area hotels averaged ~75% full recently ( BNBcalc ) ) but also its robust property market. South Florida real estate has appreciated dramatically in recent years amid a population and wealth influx. It’s no accident that four of the top five U.S. short-term rental markets for 2024 were in Florida ( List with Clever ) – Miami’s blend of glamour, growth, and relatively permissive rules personifies that trend.

Austin, Texas

Why It’s Attractive: Austin has exploded as both a tech-driven economy and a cultural capital. The city draws over 30 million visitors per year ( BNBcalc ) thanks to major events like SXSW and Austin City Limits, a vibrant live music and foodie scene, and its status as a burgeoning corporate hub. This year-round mix of festival-goers, tourists, and business travelers keeps short-term occupancy rates high (hotels averaged mid-70s% occupancy in recent years ( BNBcalc ). Regulatory Climate: Texas leans heavily in favor of property owners. Austin has relatively few local restrictions on short-term rentals, and a 2021 Texas state law limits cities from imposing new onerous rules on STR operations. Unlike some municipalities that cracked down, Austin still allows non-owner-occupied rentals in many areas, making it one of the most landlord-friendly large cities in the state . Investors should still mind Austin’s licensing requirements, but overall the city fosters a hospitable environment for STRs. Investor Outlook: Austin’s housing market has been on fire – median home prices nearly doubled from 2014 to 2023 ( Austin ). This meteoric appreciation (almost +87% in a decade ) reflects Austin’s robust population and job growth, and it bodes well for long-term equity gains on top of rental income. High-net-worth investors see Austin as offering the best of both worlds: strong short-term cash flow potential and a stake in one of the nation’s fastest-growing real estate markets. State-level support for STRs further de-risks the investment, insulating owners from the regulatory reversals seen in less friendly cities.

Nashville, Tennessee

Why It’s Attractive: Nashville hits the sweet spot as a mid-sized city with outsize tourist appeal. Over 16 million people visited Nashville in 2022 ( BNBcalc )to experience its legendary music scene (from the honky-tonks of Broadway to the Grand Ole Opry) and a growing menu of festivals and sporting events. Leisure travel and convention business keep demand steady year-round – evidenced by hotel occupancies often topping 75%. The city’s lively entertainment districts and new sports venues (including MLS and NHL teams) draw big crowds and support a healthy short-term rental market. Regulatory Climate: Nashville did impose some restrictions in recent years – for example, tighter limits on non-owner occupied rentals in certain residential zones. However, enforcement has been inconsistent, and many vacation rental properties continue operating especially in tourist-centric neighborhoods . Crucially, Tennessee has not implemented any statewide ban on STRs, and local officials recognize the economic importance of tourism. In practice, investors who focus on permitted zones or choose properties with existing short-term rental permits have found ample opportunity in Nashville. Investor Outlook: The city’s rapid growth (it consistently ranks among the top U.S. metros for population and job gains) has fueled housing appreciation and rental demand. Home values in Greater Nashville rose over 130% in the last 10 years ( WSMV ) , placing it in the top 10 nationwide for decade-long price increases. That appreciation upside, combined with Nashville’s enduring tourist magnetism, continues to lure sophisticated investors – even as they navigate permit requirements. So long as one stays compliant, Nashville offers a dynamic, high-reward urban STR environment.

Resort & Vacation Destinations Embracing Short-Term Rentals

Beyond the big cities, many pure vacation markets present ideal conditions for short-term rental investments. These are the beach towns, ski resort areas, and leisure destinations that thrive on tourism – often with local economies built around accommodating visitors. In such markets, local governments tend to be more receptive to STRs (since tourism is an economic lifeblood), though regulations like licensing and occupancy taxes still apply. Seasonality is a key factor: some resort areas see huge summer or winter peaks and slower off-seasons. The top picks are those with either year-round appeal or a peak season so strong that annualized returns remain compelling. Investors also seek destinations with solid long-term property value trends, not just quick rental yields. Below are a few leading resort markets combining traveler appeal, friendly governance, and investment upside:

Orlando, Florida

Why It’s Attractive: Orlando is arguably the vacation rental capital of the U.S. – a perennial family playground drawing over 75 million visitors per year in pre-pandemic times (and rebounding strongly again). Home to Walt Disney World, Universal Studios, and a constellation of theme parks and golf resorts, Greater Orlando guarantees a massive and constant tourist base. The demand for lodging is tremendous and not just confined to hotels; thousands of visitors prefer renting villas or condos for more space on their Disney vacation. Regulatory Climate: Orlando and surrounding Orange County are known for being extremely accommodating to short-term rentals. The city places virtually no special restrictions on STR properties ( BNBcalc )– there are no minimum stay requirements or caps on licenses in Orlando . This laissez-faire approach (backed by Florida’s state preemption of rental bans) means investors can legally operate everything from downtown condos to suburban vacation homes, as long as they register and pay the standard tourist taxes. Many master-planned vacation communities have sprung up near Disney specifically to serve the short-term rental market, with local authorities supportive of these projects. Investor Outlook: Orlando real estate has appreciated impressively, buoyed by both population growth and investor demand. Home values jumped roughly 62% in the last five years ( List With Clever ), and the metro remains relatively affordable compared to other top tourist cities. Rental returns are among the highest in the country – an average Orlando rental earned over $50K annually, with some large pool homes grossing far more in peak season ( BNBcalc ). With travel to Orlando showing no signs of abating and pro-STR policies locked in at the state level, this market offers a rare combination of high yield and long-term stability for vacation rental investors.

Destin & Florida’s Emerald Coast

Why It’s Attractive: Florida’s Emerald Coast – including Destin, Panama City Beach, and neighboring Gulf Coast communities – has surged as a luxury vacation rental haven. Destin, for example, now sees over 4.5 million visitors annually despite its small size ( ( Up My Booking ). Drawn by sugar-white beaches, fishing and golf, and family-friendly attractions, roughly 80% of those visitors opt to stay in vacation rentals over hotels . The region enjoys a long summer high season and a secondary peak during spring break, giving investors a solid booking calendar. Regulatory Climate: Local governments on the Emerald Coast largely encourage short-term rentals, which have been part of the fabric of these beach towns for decades. Destin’s city government requires simple STR registration and has been cracking down on unlicensed operators – but notably as a way to ensure compliance, not to stifle rentals. The regulatory framework is focused on safety and managing noise or parking, while still “supporting sustainable tourism and responsible STR ownership” in the community( Up My Booking ) . In other words, as long as investors follow the rules (e.g. obtain the city permit, observe occupancy limits), they can count on a stable operating environment. Importantly, Florida’s statewide pro-STR stance underpins local policies here as well. Investor Outlook: The Emerald Coast has seen property values climb steadily, thanks to heavy buyer interest in vacation homes. Even in 2024, Destin rentals appreciated around 6% year-on-year, reflecting a healthy market. High-end beachfront homes and condos command top nightly rates (e.g. a 3-bedroom Gulf-front property can gross $100–150K+ annually ( Up My Booking ). ). For investors and developers, the Panhandle offers relatively lower acquisition costs than South Florida, yet strong cash flow and solid appreciation. As travel demand to these beach towns remains robust, the outlook is one of continued growth – underpinned by a tourism-friendly local governance that sees rentals as a cornerstone of the economy.

Smoky Mountains (Gatlinburg/Pigeon Forge, TN)

Why It’s Attractive: The Great Smoky Mountains area of eastern Tennessee has become a powerhouse short-term rental market, especially for cabin-style vacation homes. Anchored by Great Smoky Mountains National Park – the most visited national park in the country, with about 12–14 million visits each year Nps – towns like Gatlinburg, Pigeon Forge, and Sevierville enjoy a nearly year-round tourism cycle. Families and groups flock here for hiking, fall foliage, Dollywood theme park, and year-round attractions, driving occupancy rates that rival beach markets in peak seasons. Regulatory Climate: Sevier County and its towns have generally embraced the vacation rental industry, given how central it is to the local economy. Zoning in and around Gatlinburg/Pigeon Forge broadly permits short-term rentals in tourist commercial areas and even many residential areas by permit. There are permit and inspection requirements, and Tennessee mandates collection of hotel taxes, but outright restrictions are minimal in the core tourist zones. Unlike some mountain destinations out West that capped STR permits or banned them in residential neighborhoods, the Smokies region has kept a welcoming stance to encourage tourism spending. Investor Outlook: The cabin rental business in the Smokies is well-established and lucrative. Even as more rental cabins have been built over the past few years, demand has kept pace – the national park logged a record 13.3 million visits in 2023 , and local visitor spending continues to climb. Property prices for cabins surged during the 2020–2022 boom (many out-of-state investors bought vacation homes here), but have since leveled, offering a more reasonable entry point in 2025. Well-located cabins can generate impressive cap rates, especially when capitalizing on peak seasons like summer and October leaf-peeping. For high-net-worth investors, the Smoky Mountains offer an attractive diversification play: a relatively affordable vacation market with enduring appeal, underpinned by a lenient regulatory setting in tourist towns.

Rising Second-Tier Metros and Emerging Markets

Not all top STR investment cities are obvious tourist meccas. A number of mid-size and up-and-coming U.S. cities are carving out a niche as desirable short-term rental markets. These often pair a unique regional appeal or specific driver (be it a historical downtown, a university, a tech scene, or natural attractions) with a local government eager to attract visitors and real estate investment. In many cases, these cities have learned from the regulatory battles of larger metros and are taking a more balanced, investor-friendly approach from the start. For high-net-worth investors, such markets can offer lower competition and acquisition costs alongside solid growth potential. Here are a few notable examples:

Richmond, Virginia

Why It’s Attractive: Virginia’s capital is emerging as a dark-horse favorite for rental property investors. Richmond offers a blend of historical tourism (Civil War sites, a vibrant arts scene, craft breweries) and business travel (it’s a state government and banking hub) that keeps visitor numbers healthy. Its East Coast location also makes it a convenient stop for travelers, boosting weekend getaway traffic. Regulatory Climate: Richmond stands out for its proactive, business-friendly stance on short-term rentals. The local government openly acknowledges the economic value STRs bring ( Hostaway ). In fact, recent moves by state and city officials are aimed at loosening previously restrictive rules – Governor Glenn Youngkin proposed amendments to make Virginia’s STR regulations more flexible and uniform, signaling a welcoming environment for Airbnb investors. Richmond imposes basic registration and safety requirements, but does not cap licenses in most areas and has avoided draconian measures. For investors, this means a relatively predictable regulatory situation, especially compared to many similarly sized cities that are still figuring out their STR policies. Investor Outlook: Richmond’s housing market is on a steady upswing, without the extreme price spikes seen in Sun Belt boomtowns. That offers a more accessible entry point, and the market is not yet saturated – meaning new high-end STR properties can still differentiate themselves. Occupancy rates are respectable (hovering in the high-50% range on average ( Hostaway ) , and higher in prime locations), and the unsaturated supply suggests room for growth. As more travelers discover Richmond’s charm and as Virginia coalesces around clearer state-level rules, investors here could see both robust cash flows and appreciation in a city that’s hitting a positive stride.

Fort Worth, Texas

Why It’s Attractive: Often overshadowed by Dallas, its glitzier neighbor, Fort Worth has come into its own as a destination and investment market. The city shares the Dallas–Fort Worth (DFW) metro’s huge visitor pool – over 32 million people traveled to DFW in 2022 ( BNBcalc ) for its sports events, conferences, and attractions – yet Fort Worth delivers a more manageable, Old Texas charm that many tourists love (think renowned museums, the historic Stockyards, and a growing culinary scene). It’s also directly adjacent to DFW International Airport, making access effortless for out-of-towners. Regulatory Climate: Fort Worth’s leadership has charted a noticeably more STR-friendly course than Dallas. While Dallas has debated stricter limits, Fort Worth has actively welcomed responsible operators. The city recently issued 85 new short-term rental permits in a single batch ( Hostaway ), underscoring its willingness to bring STRs into the regulated mainstream rather than push them out. This history of “business-friendly regulations” gives Fort Worth a pro-investor reputation. Investors still must adhere to zoning (STRs tend to be permitted in designated districts) and obtain a license, but there isn’t the hostile climate or capricious enforcement that some big cities have shown. Investor Outlook: Fort Worth presents a compelling opportunity to ride the coattails of DFW’s growth while avoiding some of Dallas’s headaches. The metroplex has seen some of the nation’s highest home price appreciation – Dallas home prices jumped 142% in the last decade Austin , and Fort Worth’s growth isn’t far behind. Yet Fort Worth’s property values and competition levels remain a bit lower than Dallas proper, meaning investors can find attractive cap rates. With the city eager to cultivate tourism and its relative lack of rental saturation, new upscale STR projects (boutique rental homes, downtown lofts, etc.) have room to thrive. It’s a prime example of a rising metro where choosing the right jurisdiction – Fort Worth over stricter neighbors – can make all the difference in an STR investment’s success.

Other second-tier markets are also drawing attention. In the Southeast, cities like Savannah, GA and St. Augustine, FL leverage their history and charm to attract year-round travelers; both have permitting frameworks that allow short-term rentals in tourist zones, balancing heritage preservation with investor interest. In the West, Scottsdale, AZ has become a top Airbnb market thanks to its upscale resort lifestyle and Arizona’s state law preventing local STR bans ( Sacks Tierney ). Even midwestern and mountain cities (from Kansas City to Boise) are seeing upticks in STR demand as remote work and “workcation” trends spread travel beyond the coasts. The common thread is that local governments in these rising markets generally see the upside of short-term rentals and have avoided heavy-handed crackdowns. For savvy investors, getting in early in an emergent STR-friendly city can mean strong cash flow today and significant property appreciation as the market matures.