Starting a short-term rental business in popular tourist destinations like Destin, Florida, or Vail, Colorado, may have strong appeal, but a new report suggests that some small and mid-sized cities across the U.S. might be better places to start.
AirDNA, a company that collects short-term rental data from both public and proprietary sources, released a report in January ranking the best places to invest in short-term rentals, and a number of small and mid-sized cities made the list.
Overall in 2026, investing in short-term rentals is more accessible than it has been in years, the report found. That’s due largely to declining mortgage rates over the past couple of years, which lowers the bar for affording a rental property.
To rank the best places to invest, AirDNA looked at thousands of homes currently for sale as of Jan. 1, 2026 and calculated the potential annual rental income before expenses for each property relative to its listing price. It also examined demand and booking frequency, potential revenue growth, purchasing budget and the strength of rentals currently available based on listings on Airbnb, VRBO and Booking.com.
The ranking also considered the factors that drive demand in each area, such as beaches, ski resorts, national parks and wineries.
