AirDNA's Chief Economist Jamie Lane gives an exclusive deep dive into AirDNA's highly anticipated Best Places to Invest Report.
Discover the top markets for short-term rental investments in 2025, backed by cutting-edge data and expert analysis.
You will find out:
The best places to invest in short-term rentals based on the best data
What makes a 'best' market to invest in and the key metrics driving these markets
All about our data-driven methodology behind identifying the top STR markets
How to use the AirDNA App to find the best markets to invest, based on your investment criteria.
Introduction and Overview 00:06
The Best Places to Invest report, now available on AirDNA’s website, ranks U.S. short-term rental markets based on demand growth and revenue growth. Demand growth reflects changes in occupancy, while revenue growth measures year-over-year earnings—key indicators of a market’s investment potential.
Investment Metrics Explained 02:51
Investability is assessed primarily through gross yield, calculated as estimated annual rental income divided by a property's sale price. Unlike previous reports that relied on averages, this year’s analysis draws from over 500,000 active listings using AirDNA’s Rentalizer tool. Properties in restricted zones or priced below $100,000 or above $5 million were excluded to ensure realistic and applicable investment insights.
Market Trends and Investment Environment 06:12
Short-term rental revenues reached their peak in 2021 and have since stabilized. At the same time, rising home prices and mortgage rates have compressed margins, pushing investability to its lowest point in October 2023. Although revenues are beginning to rebound and interest rates have softened slightly, market conditions remain tight. Slower investor activity and decelerating supply growth suggest a more cautious, analytical approach is necessary for success.
Supply Growth and Market Opportunities 08:12
Slowing supply growth is easing competition, especially in urban and coastal areas with increases under 5%. Meanwhile, top-performing small and mid-sized cities are expanding at 10–30%, offering stronger cash-flow potential. U.S. demand remains high in volume but lags global growth. Cities like New York and Maui face declines due to regulation and disruption, while markets like Cleveland, Indianapolis, and Broken Bow, OK are seeing major demand surges heading into 2024.
Top Investment Markets for 2025 15:06
The 2025 rankings highlight 25 U.S. markets with top short-term rental potential. Cities ranked 25–11, such as Tampa and Richmond, show solid revenue growth despite regulatory hurdles—local rule checks are essential.
Smaller cities lead the top 10. Frankfurt, KY posts a 13% gross yield and over 60% supply growth with rising RevPAR. Columbus, GA and Fairbanks, AK show similar momentum. Peoria, IL tops the list, boasting 50%+ gross yield and 7% RevPAR growth amid increasing competition. Full rankings are on AirDNA’s site.
Home Value Analysis and Yield Insights 17:51
AirDNA categorized markets by home price to match investor budgets. Highest yields (up to 19%) come from lower-priced homes ($100K–$350K) in places like Broken Bow and San Juan. Higher-priced markets ($550K+) like Napa Valley and Portland offer lower yields (~7%) but may require less management. This helps investors balance capital and returns.
AirDNA App Features and Promotions 20:51
Jamie highlights the 2023 app relaunch, which now focuses on helping users discover the best investment markets—addressing past feedback that users had to already know markets before using the tool.
Enhanced Market Discovery Features 22:46
AirDNA’s updated app now offers global access, allowing users to explore over 317 U.S. markets and 606,000 submarkets worldwide. Markets are color-coded by investability scores, and users can filter by criteria like listing count, market type, and yield. This makes discovering the best short-term rental investments much easier and more intuitive.
Advanced Tier Subscriber Benefits 24:13
Users can filter markets by criteria like low listings and high investability, with results displayed accordingly. Advanced subscribers get extra features, including exportable data with detailed metrics like listing counts, ADRs, and growth trends. They can also explore submarkets meeting their criteria, enabling deeper market analysis—such as examining Maine’s Downeast Acadia.
Analyzing Specific Markets 25:31
Users can explore entire markets and dive into submarkets with detailed metrics like average revenue by property type (e.g., 4-bedroom homes). They can sort by factors like occupancy to understand seasonality. The platform shows top-earning properties, their historical revenue, amenities, and even links to Airbnb listings and reviews to help gauge what drives high returns.
For Sale Properties Integration 28:07
AirDNA now includes for-sale properties with projected rental revenue via the Rentalizer tool. Users can see a home’s price, expected revenue, and relevant comparable listings to assess investment potential. This integration helps investors evaluate opportunities at both market and property levels before drilling down further.
Curated Property Listings 29:45
For-sale properties can be filtered by type, price, zoning status, and bedroom count to create a targeted list that aligns with specific investment goals. This allows for streamlined analysis within the app, reducing reliance on external platforms like Zillow. Once promising properties are identified, deeper market insights—such as seasonality, occupancy trends, and regulatory conditions—can help assess long-term potential. For instance, Maine Downeast ranks high in investability and demand, though it shows moderate revenue growth and notable seasonality.
Supply Trends and Insights 31:51
The app provides detailed supply trend data, showing changes over the last 3 years (or since 2018 for advanced users). This helps track how the number and types of listings (by bedroom size, for example) have evolved over time—key for understanding market growth or saturation. For instance, a market may have grown from 3,000 to over 4,000 peak-season listings, indicating rising supply.
Occupancy and Seasonal Analysis 33:17
Occupancy trends reveal whether demand is rising or falling over time. While occupancy declined after 2022, it increased by 6% from 2023 to 2024. Advanced data access back to 2018 allows comparisons to pre-COVID levels, highlighting longer booking seasons and stronger late-year occupancy. Forward-looking booking data also offers insight into future demand and pricing potential.
Booking Behavior Insights 35:23
Detailed data on booking lead times highlights how far in advance guests reserve stays. Larger properties see most bookings (60%) made over three months ahead, while smaller units attract more last-minute reservations. These patterns help refine pricing strategies and reveal how guest behavior varies by property type and market.
Q&A Session starts at 37:14