You don't need deep pockets to start investing in short-term rentals—just the right market. AirDNA data shows you the best places for real estate investing on a budget, whether you've got $100K, $5M, or anywhere in between.

Best Places to Invest in Airbnb on a Budget

Short-term rentals offer an affordable entry point where rental income helps cover your costs and build profits.

The best vacation rental markets aren't the most expensive ones, but places where tourists want to visit and homes are reasonably priced.

Some markets like San Juan and Santa Rosa Beach show up in multiple price ranges, letting you start small and trade up later.

Think real estate investing requires a massive bank account? The truth is that you don't need deep pockets to start investing in real estate—just the right approach. While many property markets seem increasingly out of reach, short-term rentals (STRs) offer an affordable entry point if you know where to look.

Whether you've set aside $100,000 or a million dollars to invest, great opportunities exist at every price tier for real estate investing on a budget. In this guide, we'll break down the best STR markets by specific budget ranges, using data from AirDNA's Best Places to Invest (BPTI) report to highlight locations where your investment dollars will go the furthest.

The best investments aren’t about buying the biggest or most expensive property but choosing one where rental income offsets costs and generates a solid rate of return.

Real estate investing on a budget is all about balance. While higher-priced homes can earn more in rental income, they also come with higher upfront costs and ongoing expenses. On the other hand, lower-priced properties in strong short-term rental markets can generate impressive real estate returns over time while requiring less capital to get started.

For example, a $250,000 home in San Juan, Puerto Rico may have a lower price tag but still earn strong annual revenue thanks to high tourist demand. In contrast, a $1.5M home in Kauai, Hawaii may bring in more total income but require a significantly larger investment. Finding the right balance between affordability and earning potential is key to maximizing profits while managing financial risk.

Don't worry if that "perfect balance" still comes with a hefty price tag—your vacation rental dreams aren't out of reach. There are plenty of financing options to help you secure that short-term rental property if you're real estate investing on a budget:

Leverage traditional mortgages – If you have good credit, conventional investment loans may offer competitive rates.

Consider house hacking – Buy a multi-unit property or rent out part of your home to help cover mortgage costs.

Tap into owner-occupied loans – FHA or VA loans allow for lower down payments if you plan to live in part of the property.

Use home equity – A cash-out refinance or HELOC can free up funds from an existing property.

Look into STR-friendly loans – If you’ve ever dreamed of investing in a vacation rental, lenders offer financing designed for short-term rentals, factoring in potential rental income.

These financing options open doors, but your mindset about your budget is what truly matters. Rather than seeing financial constraints as limitations, view them as your compass. A clear budget guides you to markets where your investment dollars work hardest and helps you avoid overspending on properties with diminishing returns. This approach may help you discover hidden gems for real estate investing on a budget in markets that others might overlook.

Methodology: How We Identified the Best STR Markets

To find the best place to invest in real estate on a budget, we analyzed markets based on:

Affordability – Markets were segmented into five price ranges, from $100K to $5M, to match different investment levels.

Rental income potential – We looked at occupancy rates, average daily rates, and annual revenue to assess profitability.

Yield – A key metric for comparing investment potential, yield is calculated as annual rental revenue ÷ property price. A higher yield indicates that a property generates more income relative to its cost.

Regulations & market growth – STR-friendly policies, home price trends, and tourism growth factored into long-term viability.

This approach ensures investors can find great real estate value for the money in markets that align with their budget and investment goals.

Finding a profitable short-term rental is all about getting the most bang for your buck. Some of the best investments aren't in the most expensive locations but in places where high tourist demand meets reasonable property prices, creating stronger returns on your investment.

As we show you the best short-term rental markets for different budgets, you'll notice some places appear in multiple price categories. 

This happens because these markets offer both cheaper and more expensive properties. What does this mean for you? If you're real estate investing on a budget and starting with a smaller amount, you can find affordable properties that bring in good income. Later, you could upgrade to more expensive properties in the same area that allow for higher nightly rates. This makes these markets great whether you're just beginning or ready to invest in luxury properties.

Whether you’re working with a small down payment or looking for a high-end STR investment, this breakdown will help you find the best opportunities at every level of real estate investing on a budget.

Gain insights into the revenue and occupancy trends in your market.

Best STR Markets for $100,000 – $350,000

San Juan tops this list for affordability and profitability, with properties in this price range boasting the highest yield (20.8%) of any market in this budget category. The city benefits from year-round tourism, with visitors drawn to its historic Old San Juan district, beachfront resorts, and vibrant nightlife. Unlike many seasonal vacation markets, San Juan maintains steady occupancy rates throughout the year, making it a reliable revenue-generating location for STRs.

Despite its strong returns, availability for investment properties in this price range is limited—only 68 properties are currently for sale at this price point. Investors should act quickly when listings become available, as demand continues to grow. Additionally, while Puerto Rico offers tax incentives for investors, STR regulations vary by neighborhood, so it’s essential to research permitted rental zones.

Broken Bow Lake is a booming short-term rental market, benefiting from strong demand for cabin rentals and outdoor getaways. The area has limited inventory in this price range (only 24 properties for sale), which suggests that competition is tight but that STRs maintain high occupancy rates and strong nightly rates.

Homes between $100,000 – $350,000 offer $48K in annual revenue, making it one of the highest-earning markets in this price range. Visitors come year-round for hiking, boating, and nature retreats, and the area is increasingly popular for luxury cabin stays with modern amenities. Investors who enter this market early may see rapid appreciation in property values as tourism demand continues to rise.

Benton Harbor is a hidden gem on Lake Michigan, offering low home prices and a strong rental yield. Its proximity to popular vacation destinations like St. Joseph and South Haven makes it an ideal location for budget-conscious investors who want to capitalize on lakefront tourism without the higher price tag.

With 86 properties currently for sale in this price range, there is a decent amount of inventory to choose from. This means it’s easier for investors to find properties that fit their STR goals. The city is also experiencing economic revitalization, bringing new restaurants, breweries, and entertainment options that could further boost short-term rental demand.

Michigan City stands out as a prime weekend rental market, driven by its proximity to Chicago (90-minute drive) and Lake Michigan access. The demand for short-term rentals spikes during the summer, with travelers looking for affordable alternatives to pricier destinations like New Buffalo, MI.

Homes in the $100,000 – $350,000 price range average at $213K, making it a great fit for investors looking to enter the Midwest vacation rental space without overspending. However, while occupancy rates remain strong in peak months, investors should prepare for some seasonal slowdown in colder months.

The Finger Lakes region in upstate New York is a well-established vacation rental market, particularly for wine tourism, lake vacations, and scenic retreats. Its 191 active listings suggest a competitive market with plenty of inventory, giving investors more flexibility in choosing the right property.

While its yield (18.6%) is slightly lower than other markets on this list, Finger Lakes offers high nightly rates during peak seasons, making it a great choice for investors who focus on maximizing revenue during summer and fall. The key to success in this market is offering amenities like fireplaces, hot tubs, and waterfront access to attract both summer vacationers and winter travelers looking for cozy escapes.

Other strong markets in this price range:

Holland, Michigan – A Lake Michigan vacation hub with 75 for-sale properties in this price range with an average listing price of $294K and a yield of 18.4%. This market is ideal for investors who want a coastal rental property with steady demand.

Delhi/Stamford, New York – A quiet, nature-focused market with 25 for-sale properties in this price range with an average listing price of $218K and an 18.4% yield. It caters to travelers looking for remote retreats and scenic escapes.

South Haven, Michigan – A small beach town with strong summer demand, boasting 26 for-sale properties in this price range with an average listing price of $256K and an 18.4% yield. Investors should focus on properties near the waterfront for the best returns.

Whitehall, Michigan – A lakefront STR market with 40 for-sale properties in this price range with an average listing price of $223K and an 18.2% yield. This market benefits from boating and fishing tourism.

Adirondacks, New York – A year-round destination with winter and summer appeal, featuring 158 for-sale properties with an average listing price of $217K and an 18.1% yield. It’s ideal for investors looking to capitalize on ski and outdoor adventure tourism.

What to know about investing in this price range

Success at this price point comes from balancing affordability with cash flow efficiency. The best markets offer high yields where rental income offsets purchase costs. Inventory impacts strategy: High-listing areas (e.g., Finger Lakes) provide options, while low-supply markets (e.g., Broken Bow Lake) may appreciate faster. Investors should also factor in seasonality—some markets require peak-season revenue strategies to offset slower months. The key is choosing high-demand, low-barrier locations that ensure steady cash flow and long-term growth.

Best STR Markets for $350,000 – $550,000

Santa Rosa and Rosemary Beach stand out as the highest-earning markets for available homes in this price range, thanks to premium nightly rates and strong tourism demand. These high-end Florida Panhandle destinations attract affluent vacationers willing to pay top dollar for beachfront rentals and resort-style accommodations.

With the highest average for-sale listing price in this segment ($467K), investors must be prepared for a higher upfront cost, but the $67K in annual revenue potential makes up for it. The key to success here is investing in properties with beach access or community amenities, ensuring high occupancy rates and premium pricing in peak seasons.

Madison offers the highest number of for-sale properties (72 listings) in this price range, making it one of the easiest markets to enter for mid-range investors. The city's diverse rental demand—driven by the University of Wisconsin, business travel, and tourism—creates a stable STR market with year-round occupancy.

Unlike seasonal vacation markets, Madison’s STRs benefit from consistent bookings across all months, reducing off-season risks. Investors looking for low volatility and steady revenue potential will find this college town market a reliable investment choice.

San Juan remains a competitive, high-yield STR market, with only 25 for-sale properties in this price range currently available, signaling tight inventory and strong demand. The city offers investors a rare combination of affordability, luxury rental potential, and year-round tourism.

At this price point, investors should focus on higher-end condos or beachfront properties in areas like Condado and Isla Verde, where higher nightly rates offset the upfront investment. With Puerto Rico’s favorable tax incentives and strong tourism economy, San Juan continues to be one of the best real estate investment opportunities on a budget relative to ROI.

Fairbanks offers the highest occupancy rates in this price range, thanks to Alaska’s unique tourism appeal. Travelers flock here for northern lights tourism, wildlife experiences, and adventure travel, creating a high-demand market despite its remote location.

With the lowest average home price ($417K) in this tier, Fairbanks provides an affordable way for investors to break into the mid-range market while benefiting from a highly engaged rental audience. The key to success in Fairbanks is investing in properties that cater to cold-weather travelers—think cabins with fireplaces, hot tubs, and scenic views.

Burlington’s limited inventory (only 22 properties for sale) makes it one of the most competitive STR markets in this price range. The city benefits from year-round demand, thanks to summer lake tourism, fall foliage trips, and winter ski travel.

With an average annual revenue of $58K for properties in this price range, Burlington provides consistent rental income with relatively low risk. Properties near Lake Champlain or downtown Burlington tend to perform best, offering both strong appreciation potential and steady bookings.

Other strong markets in this price range: 

Holland, Michigan – A Lake Michigan vacation town with 85 for-sale listings (the most in this tier), an average price of $428K for properties within this price range, and a 13.6% yield.

Muskegon, Michigan – A growing lakeshore market with 47 for-sale listings with an average price of $421K and a 13.3% yield.

Cape Coral, Florida – A boating and waterfront destination with good rental demand, offering solid returns in the Florida STR market.

Charleston, South Carolina – A historic tourism hotspot with strong luxury STR demand and long-term appreciation potential.

Gatlinburg, Tennessee – A top-performing Smoky Mountain market, with a strong track record of high nightly rates and year-round demand.

Investing in this range offers a balance between affordability and access to higher-earning properties. Compared to lower price tiers, competition increases, but so do revenue opportunities, especially in well-established vacation and urban markets.

Higher upfront costs, but premium rental rates – At this price point, luxury amenities and prime locations play a bigger role in maximizing nightly rates and occupancy.

Inventory impacts appreciation potential – Markets with limited for-sale listings tend to appreciate faster, while those with more availability offer easier entry for investors.

Year-round vs. seasonal demand – Some markets provide steady bookings throughout the year, while others require a strategy to maximize peak-season revenue.

Discover properties with the highest yield potential in your budget.

Best STR Markets for $550,000 – $750,000

Santa Rosa and Rosemary Beach remain top-performing markets because higher-end properties in this area generate even stronger returns. Homes with prices over $650K have the potential to bring in $80K annually—the highest revenue potential in this price range. You’ll notice that there are more for-sale properties available in this price range (89) than there are in the $350,000 – $550,000 range (64), suggesting investors with a more generous budget will have more options.

Investors should focus on beachfront or resort-style homes, as luxury travelers in this market prioritize premium locations and amenities. High demand and steady occupancy throughout the year make this one of the best luxury STR markets for consistent revenue and appreciation.

Madison’s presence in multiple price tiers highlights its strong rental market for both mid-range and high-end properties. In this segment, investors can buy larger homes or premium locations near downtown or the lakes to capitalize on higher nightly rates.

With only 30 for-sale listings available in this price range, inventory is tight, suggesting higher appreciation potential compared to other cities in this range. Madison’s year-round rental demand makes it a low-risk STR market with steady income.

Lake Norman remains one of North Carolina’s strongest vacation rental markets, drawing both weekend travelers from Charlotte and seasonal vacationers. With 80 properties currently for sale in the $550,000 – $750,000 price range, investors have options between more entry-level STRs to high-end waterfront homes.

Properties with lake access, private docks, and modern amenities command the highest occupancy rates and rental premiums. This market offers both short-term cash flow and long-term appreciation due to its growing popularity among second-home buyers.

Ventura and Oxnard offer one of the state's best STR investment opportunities and a strong real estate ROI in California, combining coastal appeal with strong rental income potential. These markets provide more affordable beach properties than Los Angeles or San Diego while still benefiting from steady tourist demand.

With an average for-sale listing price of $685K, this market has the highest home prices in the $550,000 – $750,000 range. However, its $75K in annual revenue makes it a strong long-term investment. Investors should look for homes near the beach or marinas, as waterfront access significantly boosts demand and pricing power.

Las Vegas dominates this tier in available inventory, with 1,950 properties for sale in the $550,000 – $750,000 category, making it the most accessible high-cash-flow market. The city’s STR market is driven by millions of annual visitors, ensuring consistent occupancy and demand.

With an average home price of $441K within this price range, Vegas is also one of the more affordable markets, offering strong returns without the high upfront cost. However, investors must be mindful of local regulations, as zoning laws can impact rental viability in certain areas.

Holland, Michigan – Previously mentioned in the $350K-$550K tier, Holland continues to stand out as a high-yield Lake Michigan market, offering both mid-range and premium investment opportunities.

Michigan City, Indiana – A returning market with strong appreciation potential, benefiting from lakefront tourism and Chicago weekend travelers.

South Haven, Michigan – Another Lake Michigan STR hotspot, offering high seasonal returns and a growing tourism economy.

Scottsdale, Arizona – A high-end desert market, known for luxury rentals and strong winter tourism appeal.

Bozeman, Montana – A gateway to Yellowstone, benefiting from both outdoor tourism and a strong local economy.

What to know about investing at this price range:

This price range offers higher revenue potential and more stable markets but requires a more strategic approach to property selection.

Higher inventory doesn’t always mean better opportunities – Las Vegas has the most listings (1,950), but local STR regulations require careful planning, while markets like Holland and Burlington have limited availability, signaling strong demand.

Luxury and waterfront STRs dominate this tier – Markets like Lake Norman, Santa Rosa Beach, and Ventura/Oxnard benefit from high-end vacation rentals that command premium pricing.

For investors in this range, focusing on markets with year-round demand, premium property features, and strong appreciation potential ensures long-term STR success. Up next, we’ll explore luxury STR markets with high-yield potential.

Best STR Markets for $750,000 – $1,000,000

Santa Rosa and Rosemary Beach continue to dominate as luxury STR destinations, generating the highest revenue potential in this price bracket. High-end beachfront homes and resort-style properties attract affluent travelers seeking exclusivity and premium accommodations.

With high demand and strong appreciation trends, this market remains an excellent option for investors looking to maximize both cash flow and long-term property value.

As the gateway to Rocky Mountain National Park, Estes Park offers a strong tourism-driven rental market. With just 38 listings available, inventory is limited, increasing competition and long-term appreciation potential.

Luxury cabins with scenic views, fireplaces, and outdoor entertainment spaces are in high demand, especially among nature lovers and group travelers looking for a premium mountain retreat.

Miami remains one of the strongest high-end STR markets, offering year-round tourism and luxury rental demand. High-end condos and waterfront homes in areas like South Beach, Brickell, and Wynwood attract travelers willing to pay premium rates.

With 396 listings available in this price range, Miami provides ample investment opportunities. However, short-term rental competition is high. Investors should prioritize properties with ocean views, rooftop spaces, and resort-style amenities to stand out in this crowded market.

Anaheim remains one of the top-performing STR markets, driven by Disneyland tourism and convention center visitors. Unlike many vacation destinations, Anaheim’s demand stays consistent year-round, making it a reliable cash flow market.

Investors should focus on properties close to theme parks or convention centers, as these areas tend to generate the highest occupancy rates. However, staying updated on local STR regulations is crucial, as Anaheim has seen policy shifts in recent years.

Long Island offers diverse luxury rental opportunities, from high-end beach homes in the Hamptons to estate-style properties near North Fork wine country.

With 552 active listings, it provides plenty of inventory, allowing investors to choose between oceanfront retreats, vineyard estates, or high-end suburban rentals. Its proximity to New York City ensures strong demand from affluent travelers and second-home buyers.

Lower Hudson Valley, New York – With 352 for-sale listings in this pricing category with an average home price of $869,492, this region offers scenic riverfront estates and countryside retreats, attracting New York City travelers looking for high-end escapes.

Ft. Lauderdale, Florida – A luxury waterfront destination with 429 properties for sale and an average price of $860,341 among those properties, offering strong demand for high-end rentals with boating and resort-style amenities.

Big Island, Hawaii – Featuring 47 for-sale listings at an average price point of $857,798, this Hawaiian market attracts travelers seeking secluded beachfront homes and luxury resort experiences.

St. Petersburg, Florida – With 216 for-sale properties in this price range averaging home at $862,758, this Gulf Coast hotspot balances strong beach tourism with a growing luxury rental market.

Jersey Shore, New Jersey – A popular seasonal rental market with 50 for-sale property listings coming in at average home price of $861,522, offering premium waterfront properties with high summer demand.

What to know about investing at this price range

At this price point, investors are competing in established luxury STR markets that offer higher nightly rates and premium guest experiences. Here are some things to keep in mind as you consider a luxury real estate investment:

Luxury rentals require premium features – Guests booking properties in this tier expect high-end finishes, waterfront or mountain views, and unique amenities like pools or rooftop spaces.

Limited inventory can drive appreciation – Markets like Estes Park and Holland have fewer listings, which may push property values higher over time.

Tourism-driven markets perform best – Locations with steady high-income visitor traffic, like Miami and Santa Rosa Beach, consistently generate strong cash flow.

For investors in this range, high-end properties in prime locations with luxury amenities will offer the best cash flow and appreciation potential.

Best STR Markets for $1,000,000 – $5,000,000

Napa Valley remains one of the most prestigious STR markets, drawing high-end travelers for wine tourism, corporate retreats, and luxury getaways. With limited inventory and premium rental demand, well-positioned properties command top-tier nightly rates.

Investors should focus on vineyard estates, boutique rental properties, and homes with outdoor entertainment spaces. Napa’s steady appreciation trends and high revenue potential make it a top-tier ultra-luxury STR investment.

Portland is a highly desirable coastal destination with strong rental demand from both tourists and business travelers. Properties near Old Port, scenic coastal areas, and oceanfront locations generate the highest returns. Year-round tourism helps sustain occupancy rates even during off-seasons. Investors should focus on waterfront homes or properties with boutique-style amenities to maximize rates.

Sonoma is a top competitor to Napa Valley, offering an equally strong wine tourism-driven rental market. Properties with vineyard views, luxury outdoor spaces, and spa-like amenities perform best here.

With limited inventory (28 for-sale listings), strong seasonal demand, and steady appreciation trends, Sonoma is a prime location for investors looking to capitalize on the ultra-luxury STR market.

San Juan continues to be one of the most versatile STR investment markets, offering high-end beachfront properties and boutique villas in areas like Condado, Isla Verde, and Old San Juan.

With 43 for-sale listings available in this price range, the market offers both historic luxury estates and modern high-end rentals, benefiting from Puerto Rico’s tourism-driven economy and tax incentives.

Kauai is one of the most exclusive and desirable STR locations in Hawaii, known for its pristine beaches, limited development, and premium rental demand.

Inventory for properties in this price range is healthy, and properties with ocean views, private beach access, and resort-style amenities attract high-spending vacationers. Luxury estates in Kauai consistently generate some of the highest revenue potential in the STR market.

Monterey Bay, California – A high-end coastal market with 49 for-sale property listings in this price range, averaging $1,892,367 in price, attracting luxury travelers seeking oceanfront retreats.

San Diego, California – With 359 for-sale properties at an average listing price of $1,744,114, this major tourist hub offers strong rental demand but requires strategic pricing due to its size.

Pensacola, Florida – A growing Florida Gulf Coast market with 59 for-sale properties averaging $1,965,937 in price, and strong seasonal rental demand.

Estes Park, Colorado – A luxury mountain retreat with 27 for-sale properties, listed at an average price point of $1,558,417, and steady demand from travelers visiting Rocky Mountain National Park.

New Orleans, Louisiana – With 38 for-sale properties in this price range, averaging $1,746,415, this historic STR market caters to high-end travelers looking for unique, boutique-style stays.

What to know about investing at this price range: 

At this level, investors are competing in some of the most prestigious short-term rental markets, where exclusivity, amenities, and location drive demand. The markets on this list represent the epitome of luxury real estate investment opportunities.

Exclusivity drives demand – High-end markets require premium amenities, prime locations, and unique guest experiences.

Limited inventory can boost appreciation – Markets like Kauai and Napa Valley have fewer listings, increasing long-term value.

Year-round demand helps cash flow – Destinations like Miami and San Juan attract steady bookings across all seasons.

Luxury guests expect more – High-end rentals with private chefs, spa services, or concierge services can charge premium rates.

Bigger homes attract premium bookings – Large properties cater to corporate retreats, special events, and high-net-worth travelers.

Stricter regulations apply – High-end STRs often face zoning laws, permit limits, and other short-term rental regulations, which means you need to do your research before investing.

Property management may be necessary – Hiring a property manager or concierge service ensures seamless operations and top-tier guest experiences.

With the growing demand for luxury short-term rentals, investors at this level can maximize both rental income and long-term value by choosing properties with unique appeal, high-end amenities, and a strong brand presence.

Explore listings from $100K to $5M in top-performing vacation rental markets

Can I start real estate investing within a budget, or do I need significant capital?

Yes, you can start real estate investing on a budget—it’s not just for those with deep pockets. While a large down payment can make things easier, there are a lot of financing options (more than people realize). The key is choosing a property where rental income offsets expenses. This is where short-term rentals stand out. Unlike traditional rentals, STRs often generate higher cash flow, which can help cover costs faster and make real estate investing more accessible, even at a lower price point.

What are the best strategies for low-budget real estate investing?

You don’t need a huge budget to start investing in real estate. Many investors begin with rental arbitrage—leasing a property and renting it out as an STR—to build cash flow before buying. If you're ready to purchase, looking in affordable vacation markets can offer strong returns without high upfront costs. Partnering with others through syndicates or crowdfunding can make it easier to invest, REITs provide another option, and creative financing options like seller financing or portfolio loans can help lower the cash needed to get started.

Is it better to invest in short-term rentals vs. long-term rental properties?

Short-term rentals often generate higher income than long-term rentals, thanks to premium nightly rates and strong traveler demand. They also offer more flexibility, allowing you to adjust pricing, use the property when needed, or sell without long-term tenant obligations. While STRs require more active management and awareness of local regulations, they can deliver higher returns and faster cash flow growth—making them a great option for investors looking to maximize their earning potential and get into real estate investing on a budget.

Want to invest in vacation rentals without spending a fortune? AirDNA data shows where your money works hardest, revealing the best markets from $100K to $5M to help you earn more with less.

Best Places to Invest in Airbnb on a Budget

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