The short-term-rental market has been a rollercoaster for the last few years.
Pandemic lockdowns grounded travelers in early 2020, hurting owners, hosts, and property managers with listings on Airbnb, Vrbo, and other sites. But then, a hunger for adventure and a remote-work boom sparked record numbers of nights booked nationwide and demand for unique stays that has continued to grow. New investors poured in, hoping for profits, only to see increased competition from other new hosts and host revenue dip nationwide in 2023.
Some hosts called it quits.
"It's the most overheated market I've ever seen in my career," Peggy Gascon, a host in Phoenix, Arizona, with 30 years of experience in real estate, told Business Insider last year. Gascon flipped four Airbnbs that she owned for five years into long-term rentals in 2023, opting for the consistency of tenants with yearlong leases over the ups-and-downs of keeping rooms booked amid stiff competition.
Still, many owners and hosts remain profitable. Take Montana host Ryan Villines, who saw revenue drop 10% in July 2023 compared to the previous year but was still able to rake in $5,900 that month. He put together a "romance package" of chocolate-covered strawberries and sparkling wine to woo couples about to propose.
Some of the best places to invest in short-term-rentals today are in smaller cities near outdoor attractions, according to analytics site AirDNA, which ranks the best places for Airbnb hosts to invest each year.
AirDNA economist Jamie Lane told Business Insider that even though average host revenue dipped 6% in 2023, there are still places where short-term-rental owners can find opportunities. For its list, AirDNA considered locations where homes are relatively affordable but occupancy rates are still high: above 50%.
"It's tougher and tougher to find them," Lane said. "There's not as many grand-slam deals."
AirDNA also highlighted spots that bucked the national trend to show growth in host revenue last year.
Many of the places that topped this year's list of best places to invest in a short-term rental are smaller towns near coastlines and national parks, like Ellsworth, Maine, near Acadia National Park, and Port Angeles, Washington, near Olympic National Park.
Columbus, Georgia, the top-ranked spot, draws visitors with its whitewater-rafting courses on the Chattahoochee River. Average home values there hover around $160,000 — well below the national average of $492,300.
Increasing regulations on short-term rentals from New York City to Dallas have reshaped the investing landscape, and AirDNA factored new rules into their rankings. Take Marquette, Michigan, a town on the shores of Lake Superior, which initially ranked high among the best places to invest. But, Lane said, the AirDNA team removed it from the list because of its strict cap on short-term rentals.
Here are the best 24 cities and towns to invest in an Airbnb in 2024, according to AirDNA, which provided all the data.