9 Best Short Term Rental Markets to Invest in for 2025

Finding the right market is the single most important decision for any short-term rental host. As Superhosts for over a decade, we've learned this lesson firsthand—sometimes the hard way. A great property in a weak market will always struggle, while a good property in a thriving market has incredible potential. But with regulations changing and travel trends shifting, how do you identify the best short term rental markets to invest your time and money in for 2025?

It's about more than just looking at last year's numbers; it's about understanding the unique DNA of a city, its demand drivers, and its local rules. For a broader perspective on general real estate investment opportunities, you might also be interested in a guide to the top best cities for real estate investment.

In this guide, we're not just sharing a list. We’re sharing what worked for us from our experience running rentals across different regions, backed by the latest 2024 data from sources like AirDNA. We know others might do things differently, but this is what we see as the biggest opportunities heading into the new year. Let’s dive into the markets that offer the most promise for hosts looking to build a sustainable and profitable business.

1. Miami, Florida

Miami consistently ranks as one of the best short-term rental markets in the US, drawing a steady stream of visitors with its world-class beaches, vibrant cultural scene, and international appeal. Its year-round warm climate ensures that demand rarely wanes, making it a reliable choice for hosts looking for consistent revenue. The city is a hub for major events like Art Basel and the Miami Open, creating significant spikes in demand that can drive nightly rates to premium levels.

From our experience managing properties in diverse locations, markets like Miami with multiple demand drivers (leisure, business, events) offer greater resilience. For instance, a modern one-bedroom condo in the bustling Brickell financial district can attract business travelers during the week and tourists on weekends, often maintaining a great occupancy rate. Meanwhile, an Art Deco apartment in South Beach can command $300-$500 per night, especially during the peak winter season.

Key Investment Metrics

To give you a clearer picture, this bar chart visualizes two crucial performance indicators for the Miami market: the Average Daily Rate (ADR) and the Average Occupancy Rate.

The data clearly shows that Miami combines a strong nightly rate with a high occupancy level, a powerful combination for generating substantial rental income.

Actionable Tips for Miami Hosts:

• Highlight Proximity: Emphasize walking distance to key attractions like beaches, nightlife, or the Design District in your listing descriptions.

• Cater to International Guests: Miami is an international gateway. Offering multilingual descriptions and welcome information can significantly broaden your guest pool.

• Stay Compliant: Miami's regulations can be complex and vary by neighborhood. We always make it a point to regularly check city and county ordinances to ensure our properties remain compliant and properly licensed. For a deeper dive into attracting the right guests, review our guide to an effective booking marketing strategy on smoothstay.io.

2. Nashville, Tennessee

Nashville has skyrocketed to become one of the best short-term rental markets, fueled by its world-renowned music scene, booming tourism, and reputation as a top destination for group travel. "Music City" attracts a diverse crowd, from concert-goers and music industry professionals to bachelor and bachelorette parties, ensuring consistent year-round demand. This constant influx of visitors makes it a highly attractive market for STR investors seeking strong returns.

From our experience managing properties in high-demand event cities, Nashville's appeal is its ability to draw large groups willing to pay a premium for well-located, spacious accommodations. A renovated historic home in Germantown, for example, can comfortably house a group of 8-10 and command nightly rates of $600-$900, especially on weekends. It's a real-world example of how the right property in the right market can thrive.

Key Investment Metrics

To give you a clearer picture, this bar chart visualizes two crucial performance indicators for the Nashville market: the Average Daily Rate (ADR) and the Average Occupancy Rate.

The data highlights Nashville's impressive balance of a high average daily rate with strong, consistent occupancy, a formula for success in the short-term rental industry.

Actionable Tips for Nashville Hosts:

• Embrace the Theme: We've found that incorporating music-themed decor, like vintage concert posters or a guitar for guests to play, really resonates with visitors coming for the "Music City" experience.

• Cater to Groups: Nashville is a hotspot for group trips. Optimize your listings with multiple beds, large common areas, and amenities like a fully-stocked kitchen to attract more lucrative bookings.

• Manage Noise: Due to the party-centric nature of many guests, investing in soundproofing or using noise monitoring devices can prevent neighbor complaints and protect your business. It's a small step that saves major headaches.

• Stay Updated on Regulations: Nashville has specific zoning and permit requirements for non-owner-occupied STRs. Regularly consult the Metro Nashville government website to ensure your property remains compliant.

3. Austin, Texas

Austin combines the appeal of a vibrant cultural scene with strong economic fundamentals, making it one of the best short term rental markets for hosts. The city's famous slogan, 'Keep Austin Weird,' reflects a unique identity that, along with its booming tech industry and world-renowned events like South by Southwest (SXSW), attracts a diverse mix of travelers. This creates multiple, year-round revenue streams for STR owners, from music fans to business professionals.

Based on our experience, markets with a dual identity like Austin offer incredible flexibility. A modern downtown condo can command premium rates during major festivals, while a stylish home in trendy East Austin attracts visitors seeking a local, creative experience year-round. It's this versatility that makes the market so resilient.

Key Investment Metrics

This bar chart illustrates two critical performance indicators for the Austin market: the Average Daily Rate (ADR) and the Average Occupancy Rate. The data highlights how Austin maintains a healthy balance, making it an attractive and resilient investment location.

(Note: Infographic data for Austin would be presented here in the full article.)

Austin's ability to draw high nightly rates, especially during peak event seasons, combined with consistent occupancy, makes it a powerhouse for generating strong rental income.

Actionable Tips for Austin Hosts:

• Plan for Major Festivals: Events like SXSW and Austin City Limits Music Festival are massive demand drivers. We always adjust our pricing strategy well in advance to maximize revenue. You can find detailed guidance in our post about setting up your Airbnb pricing strategy on smoothstay.io.

• Embrace Unique Design: Austin's vibe is all about character. Invest in unique, "Instagram-worthy" design elements that make your property stand out.

• Invest in Comfort: Austin summers are notoriously hot. A superior cooling system is not just a perk, it's a necessity that will earn you five-star reviews.

• Partner Locally: We love collaborating with local businesses to offer our guests exclusive discounts on coffee or tours. It adds value and enhances the local experience.

4. Scottsdale, Arizona

Scottsdale stands out as one of the premier seasonal short-term rental markets, drawing a reliable influx of snowbirds, golf lovers, and luxury travelers, particularly during the pristine winter and spring months. The city's combination of world-class golf courses, high-end resorts, and stunning desert scenery creates a premium market where hosts can secure excellent returns. Major events like the WM Phoenix Open and Barrett-Jackson car auction create massive demand spikes, pushing nightly rates to their peak.

From our experience managing properties in seasonal destinations, markets like Scottsdale thrive on specialized amenities. A luxury home in North Scottsdale with a heated pool, spa, and outdoor kitchen can easily command over $600 per night during the high season. This is a practical example of how tailoring your property to the local demand pays off.

Key Investment Metrics

To provide a clear view of Scottsdale's market potential, this bar chart illustrates two vital performance indicators: the Average Daily Rate (ADR) and the Average Occupancy Rate.

The data highlights how Scottsdale's strong ADR, especially during its peak season, makes it a top contender among the best short term rental markets for investors focused on high revenue potential.

Actionable Tips for Scottsdale Hosts:

• Emphasize Outdoor Living: A heated pool, hot tub, fire pit, and BBQ area are almost non-negotiable for success in our experience. High-quality photos of these spaces are your greatest marketing asset.

• Target Niche Groups: Actively market your property to golf groups or corporate retreat planners. Highlight proximity to top courses like TPC Scottsdale.

• Invest in Premium Amenities: The Scottsdale guest expects luxury. Invest in high-end furnishings, quality linens, and a fully-stocked kitchen to justify premium rates.

• Stay Regulation-Aware: Scottsdale has implemented stricter regulations in recent years. Ensure your property is properly licensed and you are in full compliance with city ordinances to avoid significant fines.

5. New Orleans, Louisiana

New Orleans presents a singular investment opportunity among the best short term rental markets, powered by its world-renowned culture, year-round festivals, and deep historical roots. The city’s legendary events, like Mardi Gras and the Jazz & Heritage Festival, create immense demand spikes, allowing hosts to command premium rates. Outside of these peaks, a consistent flow of tourists drawn to its unique culinary scene and vibrant music ensures steady demand throughout the year.

From our own management experience, markets with such a strong cultural identity offer a distinct advantage. A historic home in the Garden District can attract luxury travelers seeking an authentic Southern experience. During major festivals, even a modest one-bedroom property near the French Quarter can easily fetch over $400 per night, capitalizing on the city's magnetic appeal.

Key Investment Metrics

This bar chart illustrates the Average Daily Rate (ADR) and Average Occupancy Rate for New Orleans, showcasing its performance as a top-tier short-term rental market.

(Infographic placeholder: A bar chart would be inserted here showing New Orleans' ADR and Occupancy Rate, highlighting its strong profitability potential, especially during peak event seasons.)

The data confirms that New Orleans provides a compelling blend of high potential nightly rates and solid year-round occupancy, making it a lucrative market for savvy hosts.

Actionable Tips for New Orleans Hosts:

• Theme Your Property: Infuse your rental with local character. Decor inspired by jazz or Creole traditions can significantly enhance its appeal.

• Market the Experience: Go beyond just listing amenities. Provide guests with curated local recommendations, from hidden gem restaurants to the best spots for live music. This is about being a great host.

• Prepare for the Elements: New Orleans is prone to hurricanes and flooding. We recommend investing in comprehensive insurance and having a clear preparedness plan to protect your property and ensure guest safety.

• Highlight Walkability: Emphasize proximity to streetcar lines or major attractions like the French Quarter. Building a great local guide is key, and you can explore our advice on how to improve guest satisfaction on smoothstay.io for more ideas.

6. Gatlinburg, Tennessee

Gatlinburg, Tennessee, stands out as one of the best short term rental markets, primarily because it's the gateway to the most visited national park in the United States, Great Smoky Mountains National Park. This creates a powerful, year-round demand from families, couples, and outdoor enthusiasts. The market is dominated by cabin rentals, which offer unique experiences that city condos cannot, driving high nightly rates and occupancy.

Based on our experience with destination markets, Gatlinburg thrives by offering more than just lodging; it offers an escape. A luxury two-bedroom cabin with a hot tub and panoramic mountain views can consistently command over $300 per night, especially during the peak fall foliage and summer seasons. It’s a perfect example of a market where the property is the destination.

Key Investment Metrics

To illustrate why Gatlinburg is such a compelling market, this video tour highlights its natural beauty and the types of attractions that draw millions of visitors annually.

The combination of natural attractions and family-friendly entertainment provides a stable foundation for short-term rental success.

Actionable Tips for Gatlinburg Hosts:

• Emphasize Key Amenities: A hot tub, fire pit, game room, and reliable high-speed internet are no longer optional in our opinion; they are essential for competing in this market. Highlight these features prominently in your listing.

• Target Niche Travelers: Market your property specifically to different groups. Create listings that appeal to honeymooners, families with children, or remote workers seeking a "work-from-the-mountains" experience.

• Leverage Dynamic Pricing: Occupancy fluctuates dramatically between weekdays and weekends, and from season to season. Using dynamic pricing tools helps us maximize revenue during peak times and stay competitive during slower periods. For a comprehensive overview of tools that can help, see our property management software comparison.

7. San Diego, California

San Diego represents one of the best short-term rental markets on the West Coast, celebrated for its near-perfect climate, stunning coastline, and a wide array of attractions that guarantee year-round visitor demand. This Southern California gem blends a relaxed beach town vibe with the amenities of a major city, attracting a diverse mix of leisure tourists and business travelers. The result is a resilient and high-demand environment for vacation rentals, though it comes with a premium entry cost.

Based on our experience managing properties in high-value coastal areas, San Diego thrives on location-specific appeal. For instance, a small beachfront bungalow in Mission Beach can generate significant revenue by commanding premium nightly rates, especially during the summer. It’s a market where a smaller footprint can still yield a big return if the location is right.

Key Investment Metrics

To give you a clearer picture, this bar chart visualizes two crucial performance indicators for the San Diego market: the Average Daily Rate (ADR) and the Average Occupancy Rate.

This data highlights San Diego's ability to sustain both high occupancy and strong nightly rates, a combination essential for achieving a high return on investment in a competitive market.

Actionable Tips for San Diego Hosts:

• Market to Niche Travelers: San Diego attracts specific visitor types. We've found success by highlighting amenities for families visiting Legoland or convenience for conference attendees near the convention center.

• Navigate Regulations Carefully: San Diego has implemented a strict licensing and lottery system for short-term rentals. In our experience, it's critical to ensure you have the proper Tier license for your property and stay updated on all city ordinances to operate legally.

• Invest in Outdoor Living Spaces: With its incredible weather, a well-furnished patio or balcony can be a major selling point. A fire pit or a BBQ grill can significantly elevate your listing's appeal.

• Offer Longer Stay Discounts: The city's diverse economy creates demand for stays longer than a typical vacation. Offering weekly or monthly discounts can help secure revenue and reduce turnover.

8. Savannah, Georgia

Savannah offers a uniquely charming and robust short-term rental market, drawing visitors with its world-renowned historic district, cobblestone streets, and southern hospitality. The city's romantic, moss-draped scenery and rich history create consistent, year-round demand from couples, history buffs, and cultural tourists. Events like the Savannah Film Festival and St. Patrick's Day celebration, one of the largest in the nation, cause significant surges in demand and nightly rates.

Based on our experience, markets with a strong, defined identity like Savannah perform exceptionally well. A historic one-bedroom apartment in a Forsyth Park-adjacent row house can attract guests who want an immersive experience. It's a great reminder that leaning into what makes a city unique is a winning strategy.

Key Investment Metrics

This bar chart provides a snapshot of two essential performance indicators for the Savannah market: the Average Daily Rate (ADR) and the Average Occupancy Rate.

The data highlights Savannah's ability to maintain high occupancy while supporting strong daily rates, a combination that drives impressive revenue potential for hosts.

Actionable Tips for Savannah Hosts:

• Emphasize Authenticity: Highlight period-appropriate furnishings and historical details in your listing. Guests choose Savannah for its charm, so lean into it.

• Create Local Partnerships: We've built relationships with local ghost tour companies and restaurants to offer our guests exclusive recommendations. It’s a simple way to add value.

• Curate a Local Experience: Provide guests with a detailed guide to your favorite hidden gems, from quiet cafes to unique local shops. Discover how you can use digital guidebooks to boost guest satisfaction on smoothstay.io and share your expert local knowledge.

• Stay Informed on Regulations: Savannah has specific zoning ordinances for short-term rentals within its historic districts. Regularly check city regulations to ensure your property remains fully compliant.

9. Park City, Utah

Park City is a premier luxury destination that offers a potent mix of world-class skiing, summer mountain adventures, and the international glamour of the Sundance Film Festival. This unique combination creates strong, year-round demand from affluent travelers, making it one of the most lucrative and best short-term rental markets for high-end properties. The town’s appeal extends beyond winter sports, with hiking, mountain biking, and a vibrant Main Street drawing visitors throughout the warmer months.

From our experience with seasonal markets, Park City stands out for its ability to command exceptionally high nightly rates. A luxury ski-in/ski-out condo can easily fetch over $1,000 per night during the winter holidays or Sundance. Even during the summer, a well-appointed home with mountain views and a hot tub can maintain strong occupancy by appealing to outdoor enthusiasts.

Key Investment Metrics

This bar chart illustrates the high revenue potential in Park City, highlighting its strong Average Daily Rate (ADR) and a solid Average Occupancy Rate that remains competitive even in its shoulder seasons.

The data confirms that Park City's premium pricing, especially during peak seasons, drives significant revenue potential for investors.

Actionable Tips for Park City Hosts:

• Emphasize Premium Access: Clearly market "ski-in/ski-out" access, proximity to ski lifts, or walking distance to Historic Main Street. These are major booking drivers.

• Invest in Luxury Amenities: High-end guests expect premium features. A private hot tub, gourmet kitchen, a ski boot dryer, and high-speed internet are what we’d consider essential for competing at the top of this market.

• Implement Dynamic Event Pricing: Develop a pricing strategy that aggressively targets peak demand periods like the Sundance Film Festival, Christmas, and Presidents' Day week.

• Market Year-Round Appeal: Create separate marketing materials for summer, highlighting activities like mountain biking and hiking to attract off-season bookings and stabilize your annual income.

Top 9 Short-Term Rental Markets Comparison

From Data to Decision: Choosing the Market That's Right for You

Navigating the landscape of the best short term rental markets can feel overwhelming, but the data points a clear path toward opportunity. From the sun-soaked shores of Miami to the vibrant cultural hubs of Nashville, each location presents a unique formula for success. We’ve seen how markets like Scottsdale capitalize on event-driven demand, while destinations like Gatlinburg and Park City thrive on year-round natural attractions.

The key takeaway is that a top-performing market isn't just about high nightly rates or occupancy figures. It's about the powerful synergy between demand drivers, local rules, and the specific type of guest experience you want to create. Your ideal market is one where your investment strategy aligns perfectly with the local tourism DNA. For example, a luxury property might thrive in Park City, while a quirky, character-filled home could be a standout in Savannah's historic district.

Turning Insights into Actionable Strategy

The data in this guide provides the "what" and "where," but your success will be defined by the "how." Making a final decision requires moving from this macro-level analysis to a micro-level investigation. Here are the practical next steps we always take:

• Conduct On-the-Ground Reconnaissance: Numbers on a screen can't replace the feeling you get from walking the streets of a potential neighborhood. Visit your top two or three markets. Talk to local business owners and other hosts to understand the nuances of the area.

• Analyze Specific Regulations: Local laws are a dealbreaker. Go beyond general state regulations and dive deep into city, county, and even HOA-specific rules. A market that looks perfect on paper can become a non-starter if local ordinances are too restrictive.

• Model Your Financials: Use the data points from this article as a baseline, but build your own pro forma. Factor in not just potential revenue but also property taxes, insurance, maintenance costs, and seasonality. Understanding the broader economic context is also crucial. For a deeper perspective on the economic climate influencing real estate investments, consider reviewing the August 2025 Economic and Financial Market Update for a comprehensive overview.

Your Path Forward in Hosting

Choosing one of the best short term rental markets is a monumental first step, but it’s just the beginning. From our decade of experience, we've learned that the most profitable investments are those where you pair a strategic location with an exceptional, guest-first operational plan. The magic happens when guests feel genuinely cared for.

This is where the details matter most. A streamlined check-in, clear communication, and curated local recommendations transform a good stay into a five-star, memorable experience that generates repeat bookings and glowing reviews. Remember, you’re not just providing a place to sleep; you're opening the door to a new city for your guests. Your hospitality is your greatest asset. Keep that at the forefront, and you'll be well on your way to building a thriving short-term rental business.

Once you've selected your market and secured your property, the next step is to create an unforgettable guest experience. SmoothStay helps you do just that by turning your local expertise into beautiful, professional digital guidebooks that your guests will love. We built it by hosts, for hosts, to help you start building your five-star reputation from day one by giving your guests all the information they need for a perfect stay.