The Best Places to Invest in Short-Term Rentals in 2025
In this highly anticipated episode of STR Data Lab, Jamie Lane, Chief Economist at AirDNA, and Scott Sage, Senior Vice President of Marketing & Customer Experience at AirDNA, delve into the 2025 Best Places to Invest (BPTI) report. This annual report identifies the best cities for short-term rentals (STR), providing insights into evolving market trends and guidance for investors considering the best places to invest in STRs.
Using comprehensive data and a refined methodology, this year’s report examines macroeconomic trends, regional demand, and pricing strategies to answer the question: Are vacation rentals profitable in today’s market?
From midsize cities to rural areas, this episode uncovers promising locations that offer growth potential across diverse investment budgets.
What You’ll Learn in This Episode
- Key criteria of the 2025 BPTI report: investability, demand, revenue, and regulations
- Booking trends and seasonality, with a focus on January and February’s impact
- Top 2025 markets: Crescent City, Columbus, Akron, Fairbanks, and Peoria
- AirDNA’s tools for personalized strategies using price-tier segmentation
Episode Highlights
Why Timing Matters: Booking Trends for Early 2025
Jamie opens the discussion by highlighting the critical role January and February play in shaping the STR industry's performance for the year. These months, often referred to as “booking season,” mark a period of high activity as travelers secure reservations for vacations, events, and holidays later in the year.
Jamie notes that early 2025 booking data reveals strong momentum, suggesting that this year holds promising opportunities for new and seasoned investors alike.
Unpacking the BPTI Report for 2025
The Best Places to Invest report has become a cornerstone of AirDNA’s offerings. Jamie and Scott explain that the report identifies top markets for STR investments, balancing high returns with long-term stability. The report’s methodology focuses on four key criteria:
- Investability: Calculating revenue potential relative to property values to measure profitability
- Demand: Assessing occupancy rates and booking momentum in each market
- Revenue Growth: Tracking changes in RevPAR (revenue per available rental) over the previous year
- Regulations: Filtering markets with restrictive STR rules that hinder new investments
This year, AirDNA introduced a game-changing enhancement: focusing exclusively on homes currently for sale. The report provides investors with actionable insights tailored to real-time market conditions by evaluating data from 250,000 for-sale properties.
Top Five Markets for 2025
The episode unveils the best cities for short-term rentals, with Jamie and Scott diving into the specifics of each market:
- Crescent City, CA: A coastal gem in Northern California with a 12% gross yield, affordable home prices, and consistent demand from travelers seeking quiet, scenic escapes.
- Columbus, GA: A repeat contender from last year, Columbus offers low property prices around $298,000 and a 20% year-over-year growth in supply without sacrificing occupancy.
- Akron, OH: Known for its affordable housing market, Akron boasts a 13% yield, strong RevPAR growth, and increasing popularity among regional travelers.
- Fairbanks, AK: This Alaskan city benefits from year-round demand due to its mix of tourism, seasonal workers, and proximity to national parks. Homes in Fairbanks offer a 66.5% occupancy rate and $50,000 in annual revenue on average.
- Peoria, IL: Situated near Chicago, Peoria delivers 15% gross yields, strong occupancy, and favorable home prices averaging $200,000, making it accessible for budget-conscious investors.
Personalized Investments: Introducing Price-Tier Segmentation
AirDNA’s price-tier segmentation allows investors to align their budgets with tailored opportunities. Scott explains that investors seeking properties priced between $100,000 and $350,000 often gravitate toward the Midwest and smaller cities. Higher tiers, such as $750,000 to $1 million, include more luxurious markets like Napa Valley or coastal Florida.
This segmentation is particularly valuable for investors deciding whether to pursue cash-flow-focused properties or invest in premium markets with long-term appreciation potential.
Leveraging AirDNA for Smarter Decisions
Scott and Jamie showcase how AirDNA’s tools empower investors to create custom strategies. Features such as the Rentalizer calculator help estimate earnings for individual properties, while market filters allow users to narrow down locations based on price, demand, and potential yield.
For example, an investor exploring the best places to invest in can use the platform to identify the ideal city, property type, and price point tailored to their criteria. Investors can mitigate risk and uncover new opportunities that align with their goals by leveraging AirDNA’s data.
Actionable Takeaways
- Evaluate opportunities in midsize cities and rural areas, which continue to demonstrate strong supply absorption and revenue growth.
- Use AirDNA’s tools to tailor investment strategies based on personal budgets and preferences.
- Prioritize markets with healthy year-over-year revenue growth, as they indicate long-term profitability.
- Stay mindful of regulations and work within zones that allow short-term rentals to avoid potential disruptions.
- Take advantage of early booking trends in January and February to capitalize on growing demand.
Conclusion
The 2025 Best Places to Invest report provides a roadmap for navigating the rapidly evolving STR industry. Whether you’re drawn to the affordability of Midwest markets or the luxury appeal of Napa Valley, this episode highlights the importance of aligning investment strategies with data-backed insights.
With tools like AirDNA and a deeper understanding of trends in the best cities for short-term rentals, investors can make informed choices that maximize profitability and minimize risk.
Visit AirDNA’s platform and see where your next investment journey can take you by exploring the full list of top markets or create your personalized plan.
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Connect with Jamie on LinkedIn and Twitter:
LinkedIn: https://www.linkedin.com/in/jamiehlane/
Twitter: https://twitter.com/Jamie_Lane
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Connect with Scott on LinkedIn:
LinkedIn: https://www.linkedin.com/in/sagescott
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Connect with AirDNA on LinkedIn, Twitter, TikTok, and Instagram:
LinkedIn: https://www.linkedin.com/company/airdna/
Twitter: https://twitter.com/airdna
TikTok: https://www.tiktok.com/@airdna.co
Instagram: https://instagram.com/airdna.co