The three best Airbnb markets for 2026 are Nashville, Scottsdale, and Tampa if you’re buying property — and Nashville, Atlanta, and Phoenix if you’re doing rental arbitrage. AirDNA’s 2026 outlook confirms this is the best year to invest in short-term rentals since 2021, with supply growth finally slowing to 4.6% (down from 20% in 2021-2022), ADRs forecast to climb 1.5%, and RevPAR rebounding 8.1% year-over-year. But here’s what most “best market” lists won’t tell you: the right market depends entirely on whether you’re buying or renting. We’ve analyzed both paths so you can make the smartest move regardless of your capital situation.
How We Ranked the Best Airbnb Markets for 2026
Most Airbnb market rankings use a single set of metrics. That’s a problem. A city that’s perfect for a $500K property purchase might be terrible for rental arbitrage — and vice versa. We split our analysis into two distinct frameworks because the economics are fundamentally different.
Buying Metrics (Property Investors)
When you’re putting $100K-$200K down on a property, you need long-term appreciation and cash flow. We weighted these factors:
- Projected STR Revenue — Annual gross revenue based on AirDNA and Rabbu market data
- Occupancy Rates — Markets consistently hitting 55%+ annual occupancy get priority
- Cap Rate — Net operating income divided by property price. We target 6%+ for STR-specific cap rates
- Median Home Price — Entry cost matters. A 7% cap rate on a $300K property beats a 7% cap rate on an $800K property for most investors
- Regulation Stability — We excluded markets with pending restrictive legislation or recent crackdowns
- Tourism Growth Trends — Year-over-year visitor data and convention/event calendar strength
Arbitrage Metrics (No Property Needed)
Rental arbitrage flips the equation. You don’t care about home prices or appreciation. You care about the gap between what you pay in rent and what you earn on Airbnb. Our arbitrage framework weighted:
- Rent-to-Revenue Ratio — Monthly STR revenue divided by monthly rent. We want 2.0x or higher (meaning you earn at least double your rent)
- Average 2-Bedroom Rent — Lower rents mean lower risk and faster break-even
- Regulation Friendliness — Some cities ban non-owner-occupied STRs entirely. We only included markets where arbitrage is legal and enforceable
- Landlord Willingness — Markets with high concession rates (landlords offering free months) signal willingness to negotiate STR-friendly leases
- Supply Saturation — Active listing count relative to population and tourism demand
We pulled data from AirDNA’s 2026 STR Outlook, Rabbu’s market finder, Zillow home value data, Airbtics revenue reports, and AirROI analytics. Every number in this guide comes from these sources — not guesswork.
Top 10 Best Airbnb Markets for Buying Property
These markets combine strong STR revenue, reasonable entry prices, stable regulations, and proven tourism demand. If you’re financing a purchase with a DSCR loan or conventional mortgage, these are where your money works hardest in 2026.
1. Nashville, Tennessee
Nashville remains the gold standard for STR investing. Music City’s bachelor/bachelorette tourism, convention business, and weekend leisure travel support premium nightly rates that most markets can’t match.
| Metric | Nashville Data |
|---|---|
| Median Home Price | $450,000 – $525,000 |
| Average Annual STR Revenue | $46,000 – $52,000 |
| Average Daily Rate | $209 – $216 |
| Occupancy Rate | 60% (median); top-tier hosts hit 75%+ |
| Estimated Cap Rate | 6.2% – 7.1% |
Why Nashville for buyers: Supply actually contracted 1.1% year-over-year in early 2026 — rare in any STR market. That means less competition, more pricing power. ADRs climbed to $209 aggregate, and RevPAR stabilized at $65 in January 2026, matching 2025 levels. The bottom is in. Properties near Downtown, Music Row, and East Nashville command the highest rates, especially during CMA Fest (June) and fall football season.
The catch? Entry prices are steep. You’re looking at $500K+ for a modest property in the highest-demand neighborhoods. But the revenue justifies it — top-tier operators gross $9,500+ in peak months.
2. Scottsdale, Arizona
Scottsdale delivers what every STR investor wants: consistent year-round demand with a monster winter season. Snowbirds from November through March drive 75-85% occupancy during peak months.
| Metric | Scottsdale Data |
|---|---|
| Median Home Price | $425,000 – $550,000 |
| Average Annual STR Revenue | $42,000 – $58,000 |
| Average Daily Rate | $225 – $285 |
| Occupancy Rate | 68% – 76% annually |
| Estimated Cap Rate | 6.5% – 7.8% |
Why Scottsdale for buyers: The occupancy consistency is the real story. While most markets swing wildly between peak and off-season, Scottsdale maintains 68-76% year-round. Business travelers, Arizona State University visitors, sports fans (spring training alone fills calendars for 6 weeks), and families keep demand diversified. Suburban 3-4 bedroom homes in the $400-550K range deliver the strongest yields.
Summer months (June-August) are the only soft spot — Arizona heat pushes occupancy down — but strategic pricing keeps properties profitable even in the slow season.
3. Tampa, Florida
Tampa combines Florida’s tourism gravity with surprisingly affordable entry prices compared to Miami or Orlando. Property values jumped 71.6% over the past five years, but the market still offers better buy-in than most Florida competitors.
| Metric | Tampa Data |
|---|---|
| Median Home Price | $387,000 – $420,000 |
| Average Annual STR Revenue | $35,000 – $53,000 |
| Average Daily Rate | $183 – $210 |
| Occupancy Rate | 57% (average); top-tier hits 87% |
| Estimated Cap Rate | 6.0% – 7.5% |
Why Tampa for buyers: March is the peak revenue month (monthly revenues hit $4,593 with 67.4% occupancy and $210 ADRs), and the spread between best-in-class and average operators is massive. Top 10% of Tampa hosts achieve 87%+ occupancy. That gap represents pure operational upside — professional management and smart pricing strategy transform an average Tampa property into a top performer.
Ybor City and Westshore neighborhoods offer the best balance of price ($387K-$400K median) and guest demand. Tampa’s 2026 FIFA World Cup nearby events (watch spillover from Miami and Orlando) add a demand kicker that won’t repeat.
4. Savannah, Georgia
Savannah punches well above its weight class. A relatively small city with enormous tourism appeal — historic district charm, SCAD (Savannah College of Art and Design), and a growing food scene — generating outsized STR revenue.
| Metric | Savannah Data |
|---|---|
| Median Home Price | $335,000 – $375,000 |
| Average Annual STR Revenue | $42,000 – $50,000 |
| Average Daily Rate | $204 – $281 |
| Occupancy Rate | 60% – 67% |
| Estimated Cap Rate | 7.2% – 8.5% |
Why Savannah for buyers: Look at that cap rate range. At $335K median home price and $42K-$50K annual revenue, Savannah delivers some of the best ROI numbers in the Southeast. Peak months push $5,773 in monthly revenue with $304 ADRs. Home values are basically flat (-0.5% YoY), meaning you’re buying at fair value rather than chasing appreciation into an inflated market.
The 2,000+ active listings signal a mature market — but Savannah’s tourism continues growing, particularly driven by film production (it’s become a major filming destination) and St. Patrick’s Day celebrations that fill the city every March.
5. Asheville, North Carolina
Asheville’s proximity to the Blue Ridge Mountains, its nationally recognized culinary scene, and its craft beer culture create year-round tourism demand that few small markets can match.
| Metric | Asheville Data |
|---|---|
| Median Home Price | $420,000 – $486,000 |
| Average Annual STR Revenue | $29,000 – $35,000 |
| Average Daily Rate | $205 – $253 |
| Occupancy Rate | 50% – 57% |
| Estimated Cap Rate | 5.5% – 6.8% |
Why Asheville for buyers: Asheville’s lower occupancy (50-57%) is offset by premium ADRs — guests paying $205-$253/night are high-quality travelers who spend heavily at local restaurants and attractions. Home values dropped 3.2% over the past year, creating a buyer’s window. Peak months generate $4,681 with nearly 57% occupancy.
The risk here: Asheville’s Hurricane Helene recovery (late 2024) disrupted tourism, but the rebuild has attracted national attention and sympathy tourism. We’ve seen this pattern before — markets bounce back stronger after weather events because the media coverage reintroduces them to travelers who forgot about them.
6. Gulf Shores, Alabama
Gulf Shores is the Southeast’s answer to Panama City Beach — but with lower entry prices and less competition. Nearly 5,000 active listings serve a massive drive-market from Birmingham, Atlanta, Nashville, and New Orleans.
| Metric | Gulf Shores Data |
|---|---|
| Median Home Price | $340,000 – $425,000 |
| Average Annual STR Revenue | $38,000 – $48,000 |
| Average Daily Rate | $195 – $240 |
| Occupancy Rate | 55% – 65% |
| Estimated Cap Rate | 6.5% – 7.8% |
Why Gulf Shores for buyers: Alabama’s lower property taxes and relatively permissive STR regulations give Gulf Shores a structural cost advantage over Florida beach markets. The Hangout Music Festival (May) and strong summer season from Memorial Day through Labor Day create predictable revenue peaks. Condos near the beach in the $340K range can gross $38K+ annually.
7. Gatlinburg, Tennessee
The gateway to Great Smoky Mountains National Park (America’s most-visited national park with 12.1 million annual visitors). Gatlinburg’s tourism engine never stops.
| Metric | Gatlinburg Data |
|---|---|
| Median Home Price | $375,000 – $475,000 |
| Average Annual STR Revenue | $48,000 – $53,000 |
| Average Daily Rate | $295 – $354 |
| Occupancy Rate | 58% – 64% |
| Estimated Cap Rate | 7.0% – 8.2% |
Why Gatlinburg for buyers: Those ADRs are staggering for a non-coastal market. $295-$354 per night for cabin properties near the park — and peak months push revenue to $9,525 with 57% occupancy. Gatlinburg/Pigeon Forge maintains 63.9% occupancy as one of the steadiest demand markets in the country. The challenge is inventory: good cabin properties get snapped up fast, and new construction options are limited by mountain terrain.
8. San Antonio, Texas
San Antonio flies under the radar for STR investors — and that’s exactly why it deserves attention. Lower entry prices than Austin, less competition, and steadily growing demand.
| Metric | San Antonio Data |
|---|---|
| Median Home Price | $275,000 – $340,000 |
| Average Annual STR Revenue | $31,000 – $38,000 |
| Average Daily Rate | $151 – $175 |
| Occupancy Rate | 58% – 62% |
| Estimated Cap Rate | 6.8% – 7.5% |
Why San Antonio for buyers: Market growth of 17.2% year-over-year in active listings signals surging investor interest — but demand is keeping pace. The Alamo, River Walk, six military bases, and a growing tech corridor create diversified demand that doesn’t depend on any single tourism driver. At $275K median entry, the barrier is lower than any other city on this list. Nearly 5,000 active listings show a healthy, liquid market.
9. Austin, Texas
Austin’s home prices have cooled from their 2022 peak, creating a re-entry opportunity. But this is a market for sophisticated operators who understand event-driven revenue.
| Metric | Austin Data |
|---|---|
| Median Home Price | $475,000 – $599,000 |
| Average Annual STR Revenue | $34,000 – $46,000 |
| Average Daily Rate | $164 – $259 |
| Occupancy Rate | 54% – 62% |
| Estimated Cap Rate | 5.0% – 6.2% |
Why Austin for buyers: SXSW, ACL, F1 Grand Prix, and tech conferences create massive revenue spikes — ADRs of $300-$500+ during peak events. Premium properties near downtown, Zilker Park, and East Austin start at $550K but can gross $46K+ annually. The lower cap rate reflects higher entry prices, but Austin’s long-term appreciation potential adds total return that pure cash flow metrics miss.
The caveat: Austin rents dropped 5.4% in 2025 amid oversupply. This suppresses rental comps but actually helps buyers — negotiating power is on your side.
10. Myrtle Beach, South Carolina
Myrtle Beach — specifically North Myrtle Beach — claimed the #1 spot in multiple 2025 vacation home market rankings. The data backs it up.
| Metric | Myrtle Beach Data |
|---|---|
| Median Home Price | $350,000 – $490,000 |
| Average Annual STR Revenue | $43,000 – $55,000 |
| Average Daily Rate | $181 – $220 |
| Occupancy Rate | 64% – 68% |
| Estimated Cap Rate | 7.5% – 8.1% |
Why Myrtle Beach for buyers: North Myrtle Beach posts an approximate 8.1% gross cap rate — best-in-class for any coastal market. Properties are booked 241 nights per year on average with 66% occupancy. The drive-market from Charlotte, Raleigh, and the entire mid-Atlantic creates reliable, repeat demand. At $350K entry, it’s one of the most affordable beach investment markets left in the Eastern U.S.
Top 10 Best Markets for Rental Arbitrage (No Property Needed)
Rental arbitrage lets you start an Airbnb business without buying a property. You lease a unit, furnish it, and list it on Airbnb — keeping the difference between your rent and your STR revenue. It’s how thousands of 10XBNB students have built six-figure portfolios with under $5,000 in startup costs.
The key metric? Rent-to-revenue ratio. You want at least 2.0x — meaning your Airbnb revenue is double your monthly rent. Here are the best markets for arbitrage in 2026.
1. Nashville, Tennessee
| Metric | Nashville Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,650 – $1,850/mo |
| Projected Monthly STR Revenue | $3,800 – $4,300/mo |
| Rent-to-Revenue Ratio | 2.1x – 2.5x |
| Regulation Status | Permitted with license; non-owner-occupied allowed in many zones |
| Landlord Friendliness | Moderate — requires transparent conversation |
Why Nashville for arbitrage: Nashville’s tourism demand creates enough revenue to clear rent payments with strong margins. The supply contraction (1.1% fewer listings) means less competition for guest bookings. Properties in Germantown, The Gulch, and 12 South neighborhoods command the highest nightly rates. Landlords are increasingly open to STR arrangements because they get guaranteed rent plus the property is professionally maintained.
2. Atlanta, Georgia
| Metric | Atlanta Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,500 – $1,750/mo |
| Projected Monthly STR Revenue | $2,750 – $3,400/mo |
| Rent-to-Revenue Ratio | 1.8x – 2.2x |
| Regulation Status | Low regulation; permits available |
| Landlord Friendliness | High — large rental inventory, concessions available |
Why Atlanta for arbitrage: Atlanta’s low-regulation environment is the main draw. With 5,362 active listings and a metro population of 6+ million, the market isn’t oversaturated relative to demand. October and July peak seasons push monthly revenues well above $3,000. Average annual revenue of $33K on a $1,500/month rent means you’re clearing $1,250+/month after rent — before other expenses. The key: target properties near Midtown, Buckhead, or the Beltline for maximum occupancy.
3. Phoenix, Arizona
| Metric | Phoenix Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,375 – $1,800/mo |
| Projected Monthly STR Revenue | $2,800 – $3,500/mo |
| Rent-to-Revenue Ratio | 1.9x – 2.3x |
| Regulation Status | State preemption law protects STR rights |
| Landlord Friendliness | Very high — 58% of properties offering concessions |
Why Phoenix for arbitrage: Arizona’s state preemption law is the single biggest regulatory advantage in the U.S. for short-term rental operators. Cities cannot ban STRs. Period. That legal certainty is worth its weight in gold. Add to that: rents dropped 3.0% in 2025, and a staggering 58% of Phoenix properties are offering concessions (free months, waived deposits). That means you can negotiate a below-market lease on day one.
The 2026 Super Bowl (Glendale) and numerous spring training games boost revenue during Q1. Target properties in Tempe, North Phoenix, or Mesa for the best rent-to-revenue spread.
4. Denver, Colorado
| Metric | Denver Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,580 – $1,975/mo |
| Projected Monthly STR Revenue | $3,200 – $4,000/mo |
| Rent-to-Revenue Ratio | 1.9x – 2.2x |
| Regulation Status | License required; primary residence rule in city proper (target suburbs) |
| Landlord Friendliness | Highest in the U.S. — 58% offering concessions |
Why Denver for arbitrage: Denver tops the entire country for rental concessions — roughly 58% of properties offering at least one free month. Rents fell 3.6% in 2025. Translation: landlords are desperate for reliable tenants, and you can negotiate extremely favorable lease terms.
The important nuance: Denver proper requires a primary residence license for STRs. Smart arbitrageurs target suburban markets like Aurora, Lakewood, and Westminster where regulations are more permissive. Mountain proximity drives premium ADRs ($200+ for well-positioned properties near I-70 ski corridor access).
5. Charlotte, North Carolina
| Metric | Charlotte Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,380 – $1,800/mo |
| Projected Monthly STR Revenue | $2,700 – $3,300/mo |
| Rent-to-Revenue Ratio | 1.8x – 2.1x |
| Regulation Status | Relatively permissive; no city-wide ban |
| Landlord Friendliness | High — growing inventory with concessions available |
Why Charlotte for arbitrage: Charlotte’s economy runs on banking (Bank of America, Wells Fargo HQ), which means consistent business traveler demand that doesn’t depend on tourism. NASCAR events, Panthers and Hornets games, and a growing food scene add leisure demand on top. Rents are reasonable, and the city’s rapid population growth (top 5 in the U.S.) means the STR market is expanding alongside the housing market rather than competing against it.
6. Columbus, Ohio
| Metric | Columbus Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,200 – $1,400/mo |
| Projected Monthly STR Revenue | $2,400 – $3,000/mo |
| Rent-to-Revenue Ratio | 2.0x – 2.2x |
| Regulation Status | Minimal regulation; permits straightforward |
| Landlord Friendliness | Very high — 3.5% rent growth shows stable market |
Why Columbus for arbitrage: Columbus is the sleeper pick on this list. Rents are the lowest of any market here — $1,200-$1,400 for a 2-bedroom — yet STR revenue still clears $2,400-$3,000/month thanks to Ohio State University events, the booming Short North arts district, and Intel’s $20 billion chip plant bringing thousands of workers and visitors. That 2.0x+ rent-to-revenue ratio at minimal capital outlay? That’s how you scale fast.
Rent growth of 3.5% (one of the strongest nationally in 2025) signals a healthy, growing market rather than one in distress. Columbus is the kind of arbitrage market where you start with one unit, prove the model, and scale to five within 12 months.
7. Jacksonville, Florida
| Metric | Jacksonville Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,400 – $1,550/mo |
| Projected Monthly STR Revenue | $2,600 – $3,200/mo |
| Rent-to-Revenue Ratio | 1.8x – 2.1x |
| Regulation Status | Permissive; registration required in some areas |
| Landlord Friendliness | High — concession rates above 50% |
Why Jacksonville for arbitrage: Jacksonville is Florida’s largest city by land area, which means more inventory variety and less concentrated competition. Beach-adjacent properties (Jacksonville Beach, Neptune Beach) command premium ADRs while inland properties near the medical district serve a different — but equally consistent — business traveler segment. Over 50% of properties offering concessions means you’ve got leverage at the negotiating table.
8. Raleigh, North Carolina
| Metric | Raleigh Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,440 – $1,650/mo |
| Projected Monthly STR Revenue | $2,800 – $3,400/mo |
| Rent-to-Revenue Ratio | 1.9x – 2.2x |
| Regulation Status | Moderate; varies by county |
| Landlord Friendliness | High — significant concession activity |
Why Raleigh for arbitrage: The Research Triangle (Raleigh, Durham, Chapel Hill) generates constant business and academic travel demand. Duke, UNC, and NC State alone bring tens of thousands of visitors for events, graduations, and sporting events throughout the year. Raleigh sits above the 50% concession threshold, meaning landlords are actively competing for tenants. Tech industry growth (Apple, Google, and dozens of biotech firms expanding in the Triangle) adds long-term demand stability.
9. San Antonio, Texas
| Metric | San Antonio Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,200 – $1,450/mo |
| Projected Monthly STR Revenue | $2,500 – $3,200/mo |
| Rent-to-Revenue Ratio | 2.0x – 2.3x |
| Regulation Status | Texas is landlord-friendly; permits required but accessible |
| Landlord Friendliness | High — affordable market with growing inventory |
Why San Antonio for arbitrage: San Antonio appears on both our buying and arbitrage lists — the only city to earn that distinction alongside Nashville. Low rents ($1,200-$1,450) combined with strong STR revenue from River Walk tourism, military base traffic, and convention demand create a 2.0x+ ratio. The 17.2% growth in active listings year-over-year shows rising demand, not oversaturation — San Antonio’s tourism base is expanding.
10. Tampa, Florida
| Metric | Tampa Arbitrage Data |
|---|---|
| Average 2BR Rent | $1,550 – $1,800/mo |
| Projected Monthly STR Revenue | $2,900 – $3,800/mo |
| Rent-to-Revenue Ratio | 1.8x – 2.1x |
| Regulation Status | Varies by county; Hillsborough relatively permissive |
| Landlord Friendliness | Moderate — competitive rental market |
Why Tampa for arbitrage: Tampa also makes both lists. The spread between average and top-tier operators is enormous — top 10% hit 87% occupancy versus the median 56%. That means operational skill (staging, dynamic pricing, guest experience) matters more than location alone. If you execute well, the arbitrage margins are among the strongest in Florida. March peak season alone can cover 2-3 months of rent in a single month of revenue.
Buying vs Arbitrage: Side-by-Side Market Comparison
Here’s the honest truth that most guides skip: buying and arbitrage aren’t better or worse — they’re different tools for different situations. We’ve coached thousands of students at 10XBNB through both paths, and the right choice comes down to your capital, risk tolerance, and timeline.
| Factor | Buying Property | Rental Arbitrage |
|---|---|---|
| Startup Capital | $80,000 – $150,000+ (down payment, closing, furnishing) | $3,000 – $8,000 (first/last, deposit, furnishing) |
| Monthly Fixed Costs | $2,500 – $4,500 (mortgage, insurance, taxes, maintenance) | $1,200 – $2,000 (rent, utilities) |
| Revenue Potential | $35,000 – $55,000/year per property | $28,000 – $45,000/year per unit |
| Net Monthly Cash Flow | $800 – $2,500 | $1,000 – $2,500 |
| Equity Building | Yes — appreciation + mortgage paydown | No — you build cash, not equity |
| Risk Profile | Higher capital at risk; lower operational risk (you own the asset) | Lower capital at risk; higher operational risk (lease dependent) |
| Scalability | Slow — each purchase requires new financing | Fast — can add 1-2 units per month |
| Time to First Revenue | 60-90 days (purchase + renovation + listing) | 14-30 days (lease signing + furnishing + listing) |
| Exit Strategy | Sell property (potentially at profit), convert to LTR | Walk away at lease end (low exit cost) |
| Best Markets | Nashville, Scottsdale, Tampa, Savannah, Gatlinburg | Nashville, Atlanta, Phoenix, Columbus, San Antonio |
When Buying Makes More Sense
- You have $100K+ liquid capital and qualify for a DSCR loan or conventional mortgage
- You want long-term wealth building through appreciation plus cash flow
- You’re targeting vacation/resort markets (Gatlinburg, Gulf Shores, Myrtle Beach) where renters are scarce but buyers have options
- You want to operate one property really well before scaling
- The market has strong appreciation potential beyond just STR revenue
When Arbitrage Wins
- You have under $10K to start but want to begin generating revenue immediately
- You want to test markets before committing hundreds of thousands in a purchase
- You’re targeting urban markets where home prices are high but rents are declining (Phoenix, Denver, Austin)
- You want to scale quickly — adding 5-10 units in your first year
- Your market has high concession rates (50%+) meaning landlords are motivated to negotiate STR-friendly leases
Many of our most successful rental arbitrage students eventually transition to buying. They use arbitrage cash flow to save for down payments, learn the operational side, and identify the exact markets and property types that work best — all before risking six figures on a purchase. It’s the smartest path if you’re starting from zero.
Markets to Avoid in 2026
Not every market is worth your time. Some look good on paper but carry hidden regulatory, saturation, or economic risks that will crush your returns. Here’s where to stay away from in 2026.
Over-Regulated Markets
New York City — Local Law 18 (enacted 2023) effectively killed non-owner-occupied STRs. Hosts must be present during stays, register with the city, and comply with occupancy limits. Enforcement is aggressive. Unless you live in the unit full-time, NYC is a non-starter for Airbnb investing.
Los Angeles / Santa Monica — Primary residence requirement means you must live in the property and can only rent it when you’re away. Santa Monica’s enforcement includes $500/day fines. The juice isn’t worth the squeeze.
San Francisco — 90-day annual cap on entire-home rentals. Registration required. Regular inspections. Combined with median home prices above $1.3M, the math simply doesn’t work.
Honolulu / Hawaii — While occupancy rates are naturally high (it’s Hawaii), regulations have tightened dramatically. Maui County cracked down in 2024-2025, and Oahu’s short-term rental permits are limited and nearly impossible to obtain. The high cost of living eats into margins even when you can operate legally.
Over-Saturated Markets
Dallas, Texas — More than 6,000 new Airbnb listings since 2020. The oversupply is driving down nightly rates and occupancy. Unless you’re operating a differentiated luxury property, Dallas is a race to the bottom on price.
Orlando (parts of it) — Orlando’s theme park gravity is real, but too many investors bought in with risky loans during 2021-2022. The result: saturated vacation home communities near Disney where identical properties compete on price alone. Stick to off-the-beaten-path neighborhoods if you must enter Orlando.
Markets with Declining Tourism or Economic Headwinds
Parts of rural Florida — Rising insurance costs (up 40-60% in some counties since 2022) are eroding margins for property owners. If your annual insurance premium jumps from $3,000 to $5,000, that’s $2,000 straight off your bottom line.
Markets dependent on a single employer or industry — Any city where Airbnb demand relies primarily on one company, one military base, or one seasonal event is inherently risky. Diversified demand bases (tourism + business + events + relocation) are non-negotiable.
How to Analyze Any Market Yourself
Don’t take our word for it. Here’s the exact process we teach at 10XBNB for evaluating whether a market works for buying or arbitrage.
Step 1: Check STR Revenue Potential (Free)
Go to AirDNA’s Rentalizer (free version) and plug in an address in your target market. Look at:
- Projected annual revenue
- Average occupancy rate
- Average daily rate
- Revenue seasonality (how much swing between peak and off-season?)
Run 3-5 different addresses across different neighborhoods to get a market-level picture rather than a property-specific one.
Step 2: Search Airbnb Like a Guest
Open Airbnb.com and search your target city for a random weeknight (Tuesday or Wednesday) two weeks out. Then search the same city for a weekend (Friday-Saturday) one month out. Compare:
- How many listings appear? (Under 500 = less competition; over 2,000 = saturated)
- What are the average nightly rates?
- Are calendar dates mostly booked (green) or mostly available (white)?
- What property types dominate? (Entire homes, private rooms, shared spaces)
Step 3: Check Regulations
Google “[city name] short-term rental regulations 2026” and look for:
- Is a permit/license required? (Usually fine — you just need to apply)
- Is there an owner-occupancy requirement? (Deal-breaker for arbitrage)
- Are there annual night caps? (e.g., 90-day limits in SF)
- Are there zoning restrictions? (Some cities only allow STRs in specific zones)
Step 4: Calculate the Numbers
For buying:
Annual STR Revenue: $45,000 Minus Operating Expenses (35%): -$15,750 Net Operating Income: $29,250 Divided by Property Price: $400,000 Cap Rate: 7.3% <-- This is strong
For arbitrage:
Monthly STR Revenue: $3,200 Minus Monthly Rent: -$1,500 Minus Operating Expenses (25%): -$800 Monthly Net Profit: $900 Rent-to-Revenue Ratio: 2.13x <-- Above 2.0x threshold Annual Net Profit: $10,800 per unit
Step 5: Talk to Local Operators
Join local STR Facebook groups, attend a local real estate meetup, or reach out to Airbnb property managers in the market. Ask:
- "What's your average occupancy for the past 12 months?"
- "Has regulation changed recently?"
- "What neighborhoods perform best?"
Real operators will tell you things that no dataset captures — landlord attitudes, HOA enforcement trends, neighborhood-level demand shifts.
Use tools like Rabbu's Market Finder and AirDNA's Best Places to Invest for additional data points. The more data you layer, the more confident your decision becomes.
The Bottom Line: Best Airbnb Markets for 2026
AirDNA calls 2026 the best year for STR investment since 2021. We agree — but only if you pick the right market and the right strategy. Buyers should look at Nashville, Scottsdale, and Tampa for the best combination of revenue, occupancy, and cap rates. Arbitrage operators should target Nashville, Atlanta, and Phoenix for the strongest rent-to-revenue ratios and landlord-friendly conditions.
The markets that overlap both lists — Nashville, San Antonio, Tampa — are the safest bets regardless of your approach. They have diversified tourism, growing demand, reasonable regulations, and strong enough revenue to support either model.
Whatever path you choose, the pros and cons of each approach come down to your starting capital, risk tolerance, and how fast you want to scale. The data supports both paths. The question is which one fits your situation.
Ready to build your first — or next — Airbnb portfolio? Start with our complete guide to launching an Airbnb business, or explore the best states for Airbnb to narrow your geographic search.
Frequently Asked Questions
What is the most profitable Airbnb market in 2026?
For property buyers, Gatlinburg, Tennessee offers the highest gross revenue potential at $48,000-$53,000 annually with ADRs of $295-$354 per night. For rental arbitrage, Columbus, Ohio delivers the best profit-to-investment ratio thanks to low rents ($1,200-$1,400/month) combined with strong STR demand from Ohio State University and the Intel expansion. Profitability ultimately depends on whether you're measuring raw revenue (Gatlinburg wins), cap rate (Myrtle Beach at 8.1%), or arbitrage margin (Columbus and San Antonio at 2.0x+ rent-to-revenue).
Is Airbnb still profitable in 2026?
Yes. According to AirDNA's 2026 Outlook, this is the best year to invest in short-term rentals since 2021. Supply growth has slowed to 4.6% (down from 20% peak), ADRs are forecast to rise 1.5%, and RevPAR rebounded 8.1% year-over-year. The "Airbnb bust" narrative was overblown — what actually happened was a correction from pandemic-era oversupply. Well-operated properties in strong markets remain highly profitable.
How much money do you need to start an Airbnb in 2026?
It depends entirely on your approach. Buying a property requires $80,000-$150,000+ between down payment (15-25%), closing costs, and furnishing. Rental arbitrage startup costs range from $3,000-$8,000, covering first month's rent, security deposit, and furnishing. Many of our students at 10XBNB started with under $5,000 using arbitrage and scaled to six-figure annual revenue within 18 months.
What is the best state for Airbnb investment?
Tennessee, Arizona, and Florida dominate our 2026 rankings. Tennessee offers both Nashville (urban tourism) and Gatlinburg (national park tourism). Arizona benefits from state-level preemption laws that prevent cities from banning STRs. Florida's year-round tourism, population growth, and diverse markets (Tampa, Jacksonville, Gulf Coast) make it a perennial favorite. See our complete best states for Airbnb guide for state-by-state analysis.
Is rental arbitrage legal in 2026?
Rental arbitrage is legal in most U.S. markets, but legality varies by city. Key considerations: you need landlord permission (include STR rights in your lease), a valid short-term rental permit or license where required, and compliance with local zoning laws. Markets like Phoenix (state preemption protects STR rights), Atlanta (low regulation), and San Antonio (Texas is landlord-friendly) are the safest bets. Avoid cities with owner-occupancy requirements like NYC, LA, and SF — those effectively prohibit arbitrage. Our cities for Airbnb arbitrage guide covers regulation status for every major market.
How do I find landlords willing to allow Airbnb?
Target markets with high concession rates — Phoenix and Denver (both 58%+), Jacksonville (50%+), and Raleigh are top picks because landlords are actively competing for tenants. Approach landlords with a professional proposal: offer above-market rent, carry STR insurance naming them as additional insured, provide quarterly property inspection reports, and sign a 12-month lease (they want stability). Many landlords in our top arbitrage markets have been burned by vacancy and will welcome a professional operator who guarantees rent payment.
What's better for beginners: buying or arbitrage?
Arbitrage. Without question. It lets you learn operations (guest communication, pricing, cleaning logistics, maintenance) with $5,000 at risk instead of $150,000. You can test different markets, property types, and strategies without being locked into a mortgage. If a market doesn't work, you walk away at lease end. If it does work, you have cash flow to reinvest — either into more arbitrage units or saving for your first property purchase. Nearly every successful buyer we know started with rental arbitrage first.
