Best Short-Term Rental Investments in 2026

While investors chase overpriced beach houses in saturated markets, some of the highest expected gross revenue yields in short-term rentals are showing up in overlooked industrial towns, state capitals, and Midwest suburbs. AirDNA estimated gross revenue yields of up to 16.4% for selected property types in its January 2026 ranking, before operating expenses, financing, and taxes. Industry analyses citing AirDNA data reported approximately 7% demand growth and 6.9% supply growth during the 2024-2025 period, a dynamic that favored investors who understood how each figure was constructed. Whether you're modeling opportunities with an Airbnb calculator or exploring fractional ownership, understanding what each published metric actually measures separates disciplined STR investors from those chasing headline numbers.

Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.

Key Takeaways

• Workforce-driven markets such as Port Arthur and Abilene ranked at the top of AirDNA's January 2026 expected gross yield rankings, with estimates in the 14% to 16.4% range before expenses, financing, and taxes

• AirDNA's January 2026 top-10 ranking averaged approximately $296,000 in average home price and 13.7% in expected gross revenue yield, which is a gross revenue-to-price ratio rather than a net or total return

• Non-tourism demand drivers (oil and gas, military, medical, government) may diversify booking sources, but resilience across economic cycles must be tested against historical revenue, occupancy, and rate performance rather than assumed

• Fractional ownership gives investors access to income-producing residential real estate with substantially less capital than acquiring an entire property, with an average mogul investment of around $10,000

• Markets with major infrastructure activity, including the flagship Stargate AI-infrastructure campus in Abilene, could support contractor and business-travel demand, although the effect on STR performance and home prices remains uncertain

Understanding the 2026 Short-Term Rental Market

Why Market Conditions Favor STR Investors This Year

The short-term rental market has stabilized after years of volatility. STR premium reached $989 per month, the highest since 2022, while supply growth slowed from 22.3% in 2022 to 6.9% in 2025. That deceleration in new supply is a genuine historical shift, and it is the backdrop against which current opportunities should be underwritten. It is not, on its own, evidence of present-day conditions in any specific market.

Several factors shape today's environment:

• Financing costs above earlier forecasts. The average 30-year fixed mortgage rate was approximately 6.6% in late July 2026, up from roughly 6.58% the prior week. That benchmark covers conforming owner-occupied mortgages; investor, non-QM, and DSCR loans can price materially higher.

• Revenue stabilization over the past two years provides clearer earnings projections, although trailing performance varies widely by market.

• International tourism growth. The National Travel and Tourism Office forecasts approximately 70.5 million international visitors to the United States in 2026, up about 3.2% from roughly 68.3 million actual visitors in 2025.

• RevPAR context. Industry data reported 3.4% RevPAR growth during an earlier market period. RevPAR can rise from ADR, occupancy, or both, so it is not by itself a measure of pricing power, and current market-level RevPAR trends vary materially by location.

The Shift Toward Workforce and Industrial Markets

Workforce-driven markets have moved to the top of several 2026 rankings. The reasons commonly cited by analysts are structural rather than seasonal, and they are worth evaluating market by market rather than as a category:

• Extended stays from contractors and traveling professionals (week-plus bookings)

• Potential midweek demand from business travelers

• Potentially lower seasonal volatility compared with tourism-dependent areas

• Municipality-specific regulatory exposure, which should be evaluated through current zoning, licensing, inspection, tax, and owner-occupancy requirements rather than assumed from market type. A 2025 peer-reviewed study of San Francisco's registration requirement found that registration rules can materially affect listing availability and bookings, which is precisely why ordinance-level review matters.

Top Markets for Short-Term Rental Investment in 2026

A note on methodology before the numbers. The figures below come from three providers that do not use the same inputs. AirDNA and Realtor.com publish average home price, annual revenue potential for a selected property type, and expected gross revenue yield, none of which deduct management, utilities, maintenance, cleaning, insurance, property taxes, platform fees, furnishing, financing, or income taxes. Lodgify publishes modeled cap rates built on a blanket 45% operating-expense assumption. Mashvisor publishes cash-on-cash returns that depend on its own financing assumptions and filtered market universe. Each card below identifies its source and date, and current AirDNA citywide observations through June 2026 are shown separately for comparison.

High-Yield Workforce Markets

Port Arthur, TX

Home to the largest U.S. refinery by calendar-day crude oil capacity as of January 1, 2026, plus a major shipping port, Port Arthur posted the highest occupancy figure (77.6%) among AirDNA's ranked top 10 in January 2026. A natural gas terminal under construction may bring contractor demand to the area.

• Average Home Price (AirDNA, January 2026): $243,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $35,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 14.4%

• Current citywide observation (AirDNA, trailing data through June 2026): approximately 67% occupancy and $13,700 average annual revenue across active listings

• Best For: Investors seeking exposure to industrial employment demand

The gap between the January revenue-potential estimate and the current citywide average is not an error in either dataset. A selected-property potential estimate and a trailing average across all active listings measure different things, and both belong in an underwriting file.

Abilene, TX

Dyess Air Force Base supported approximately 5,377 direct jobs in 2025, and approximately 14,374 direct and indirect jobs combined, according to the Texas Comptroller's military-impact analysis. Abilene also hosts the flagship initial campus of the broader Stargate AI-infrastructure initiative, a multi-company, multi-site U.S. program announced by OpenAI, SoftBank, Oracle, and MGX targeting up to $500 billion of investment over four years. That figure is the program-wide target, not the construction budget of the Abilene facility, and Crusoe and other parties are developing the Abilene campus. The market carried the highest expected gross yield (16.4%) in AirDNA's January 2026 ranking.

• Average Home Price (AirDNA, January 2026): $336,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $55,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 16.4%

• Ranking occupancy (AirDNA, January 2026): 77.2%

• Separately modeled figures (Lodgify, 2026): $201,493 median price, $51,330 annual revenue, 82% occupancy, and a 14.01% modeled cap rate after a blanket 45% operating-expense assumption

• Current citywide observation (AirDNA, through June 2026): approximately 80% occupancy and $23,200 average annual revenue

• Best For: Growth-focused investors underwriting infrastructure-linked demand

Lodgify's 14.01% cap rate is derived from its own price and revenue inputs, so it pairs with those inputs rather than with AirDNA's $336,000 and $55,000 figures.

Lake Charles, LA

One of the nation's busiest ports by tonnage, Lake Charles combines petrochemical industry activity with Cajun cultural tourism. The Chennault Airpark aviation maintenance hub may support additional lodging demand.

• Average Home Price (AirDNA, January 2026): $287,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $37,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 12.7%

• Current citywide observation (AirDNA, through June 2026): approximately $19,400 average annual revenue and 62% occupancy

• Best For: Investors wanting industrial and tourism demand in one market

Government and Medical Hub Markets

Jackson, MS

Jackson carries the highest modeled cap rate (15.95%) in Lodgify's 2026 table, calculated after applying a standardized 45% operating-expense assumption, at an ultra-low entry price. University of Mississippi Medical Center, Jackson State University, and the Jackson Convention Complex are potential demand drivers for medical, education, and midweek business bookings.

• Median Price (Lodgify, 2026): $84,672

• Annual Revenue (Lodgify, 2026): $24,550

• Modeled Cap Rate (Lodgify, 2026, 45% expense assumption): 15.95%

• Occupancy input (Lodgify, 2026): 57%

• Current citywide observation (AirDNA, through June 2026): approximately $13,800 average annual revenue and 59% occupancy

• Best For: First-time STR investors focused on entry price

Springfield, IL

The Illinois State Fair recorded 723,079 attendees in 2025; combined attendance with the Du Quoin State Fair exceeded one million. The Abraham Lincoln Presidential Library, Route 66 traffic, and state capital status are potential year-round demand sources.

• Average Home Price (AirDNA, January 2026): $262,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $35,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 13.2%

• Current citywide observation (AirDNA, through June 2026): approximately $16,700 average annual revenue and 62% occupancy

• Best For: Investors targeting government and heritage-tourism demand

Montgomery, AL

As Alabama's state capital, Montgomery may draw consistent government travel, with healthcare, education, and regional tourism providing potential diversification beyond legislative sessions.

• Average Home Price (AirDNA, January 2026): $342,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $42,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 12.2%

• Separately modeled figures (Lodgify, 2026): $143,500 median price, $30,364 annual revenue, and an 11.64% modeled cap rate after a 45% operating-expense assumption

• Current citywide observation (AirDNA, through June 2026): approximately $18,200 average annual revenue and 61% occupancy

• Best For: Investors seeking diversified non-tourism demand sources

Downtown St. Paul, MN

AirDNA's ranking entry covers Downtown St. Paul specifically, not the entire city, which the source frames as big-city demand without seven-figure prices. Major employers such as Ecolab and Securian Financial, event traffic at Xcel Energy Center, and state capital activity are potential demand drivers. Saint Paul also requires annual short-term rental host licensing, proof of insurance, and additional requirements for non-owner-occupied properties.

• Average Home Price, Downtown St. Paul (AirDNA, January 2026): $331,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $45,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 13.5%

• Current citywide observation (AirDNA, through June 2026): approximately $19,300 average annual revenue and 59% occupancy

• Best For: Urban market investors targeting corporate demand

A downtown submarket estimate should not be applied to the whole city without equivalent geographic boundaries, which is why both figures appear above.

Affordable Entry Markets

Charleston, WV

Charleston pairs the lowest average home price in AirDNA's January 2026 top 10 with a 14.1% expected gross revenue yield. Charleston Area Medical Center, which employs 5,000 as the state's largest hospital, and Kanawha Valley chemical plants are potential contributors to medical and industrial lodging demand.

• Average Home Price (AirDNA, January 2026): $228,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $32,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 14.1%

• Separately modeled figures (Lodgify, 2026): $158,399 median price, $28,211 annual revenue, and a 9.80% modeled cap rate after a 45% operating-expense assumption

• Current citywide observation (AirDNA, through June 2026): approximately $16,200 average annual revenue and 60% occupancy

• Best For: First-time investors with limited capital

Hazel Park, MI

Hazel Park recorded the highest cash-on-cash return (7.45%) in Mashvisor's filtered 100-market analysis, subject to that study's screening criteria and financing assumptions. The figure reflects that dataset rather than every U.S. city, neighborhood, property, or financing scenario. With a walk score of 85, the market may appeal to travelers seeking walkable urban neighborhoods near Detroit.

• Median Price (Mashvisor, 2026): $208,955

• Monthly Income (Mashvisor, 2026): $2,557

• Cap Rate (Mashvisor, 2026): 7.66%

• Current market coverage (AirDNA, through June 2026): approximately 88 active listings, illustrating how provider listing universes differ

• Best For: Cash-flow investors using DSCR financing

Akron, OH

Akron carried the largest active listing count in AirDNA's January 2026 top 10 at 757; AirDNA's current Akron page reports approximately 606 active listings through June 2026. An active-listing count measures STR supply, not property-sale transaction volume. The market sits adjacent to Cuyahoga Valley National Park, and corporate headquarters (Goodyear, Purell) plus three major hospital systems are potential demand drivers.

• Average Home Price (AirDNA, January 2026): $297,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $39,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 13.1%

• Separately modeled figures (Lodgify, 2026): $139,633 median price, $29,612 annual revenue, and an 11.66% modeled cap rate after a 45% operating-expense assumption

• Current citywide observation (AirDNA, through June 2026): approximately $17,400 average annual revenue

• Best For: Investors wanting markets with an established, observable STR supply base

Premium ADR Markets

Lebanon, PA

Lodgify reported the highest ADR ($203) in its top 10 despite mid-range prices. Its location between the Hershey and Lancaster tourist zones may capture overflow demand, and Fort Indiantown Gap supports 20,000+ Guard personnel and 120,000+ trainees annually, a population that could contribute to bookings.

• Average Home Price (AirDNA, January 2026): $265,000

• Annual Revenue Potential, selected property type (AirDNA, January 2026): $42,000

• Expected Gross Revenue Yield (AirDNA, January 2026): 15.7%

• Current citywide observation (AirDNA, through June 2026): approximately $28,500 average annual revenue, 60% occupancy, and an ADR of roughly $199

• Best For: Investors targeting premium nightly rates

Winter Haven, FL

Mashvisor reported 77% occupancy in its dataset, while AirDNA's trailing data through June 2026 reported approximately 54% occupancy, $18,600 average annual revenue, and a recent RevPAR decline of about 13%. Providers use different listing universes and calculations, which is why the two readings differ. Proximity to central Florida's theme parks may support year-round demand.

• Median Price (Mashvisor, 2026): $386,487

• Monthly Income (Mashvisor, 2026): $4,011

• Cap Rate (Mashvisor, 2026): 7.06%

• Cash-on-Cash Return, within Mashvisor's filtered dataset and financing assumptions (Mashvisor, 2026): 6.95%

• Best For: Investors wanting Florida exposure

How to Evaluate Short-Term Rental Opportunities

Key Metrics That Matter

Understanding what each published number actually measures is the difference between comparing markets and comparing marketing. Use an investment property calculator to model scenarios across different markets and hold periods using your own assumptions.

Expected gross revenue yield is annual revenue (or modeled revenue potential) divided by property price. AirDNA's January 2026 top-10 ranking averaged approximately 13.7% on that basis. It deducts nothing, so it is not comparable to a net cap rate, a leveraged cash-on-cash return, or an IRR.

Cap rate (net operating income divided by property value) accounts for operating expenses, but only as modeled. Lodgify's published cap rates, including Jackson's 15.95%, use a blanket 45% operating-expense assumption rather than property-level expense data.

Occupancy rate indicates demand consistency, but no universal reliability threshold applies. Occupancy should be evaluated alongside ADR, RevPAR, seasonality, listing growth, vacancy rates, cancellation rates, length of stay, and operating costs. Current AirDNA data report roughly 67% occupancy in Port Arthur and approximately 80% in Abilene.

Average daily rate (ADR) shows pricing power. Lodgify reported $203 ADR in Lebanon, PA against much lower rates in workforce markets such as Port Arthur, which reflects different strategies rather than better or worse markets.

Comparing like with like. Gross revenue yield should be compared with gross revenue yield, net cap rate with net cap rate, and leveraged cash-on-cash return with the same financing assumptions. Comparing a gross STR revenue-to-price ratio against a long-term rental's net cap rate or leveraged return produces a number that means nothing.

What Drives Sustainable STR Demand

Markets with diversified potential demand drivers tend to outperform single-source markets over time. Look for:

• Multiple employment sectors (medical plus government plus industrial)

• Infrastructure activity that could create multi-year contractor demand, tested against actual local lodging data

• Year-round events rather than seasonal tourism spikes

• Municipality-specific regulatory review covering zoning, licensing, inspection, tax, owner-occupancy, and renewal requirements

Fractional Ownership: Accessing STR Markets Without Full Property Purchase

How Fractional STR Investing Works

Purchase prices in many of the markets profiled above fall roughly within the $200,000 to $400,000 range, although required upfront equity depends on leverage, closing costs, reserves, furnishing, and renovation needs, and several profiled markets price well below that range. Fractional real estate investing enables investors to participate in income-producing residential properties, including single-family rentals, without taking on the operational burden directly.

Each property is acquired through a property-specific LLC structure. Investors purchase ownership interests in the investment-club LLC associated with that property, which gives them proportional economic and governance rights tied to a specific asset rather than exposure to a pooled fund. Investors may receive:

• Monthly distributions of their proportional share of net rental income, once a property is operational and generates distributable cash. Amounts vary with rent collected, operating expenses, fees, reserves, and vacancy, and are not guaranteed.

• Proportional participation in appreciation when a property is eventually sold, with actual exit timing and proceeds depending on property-specific conditions and ownership decisions

• Proportional tax allocations, including depreciation items reported through applicable tax documents such as K-1s, with timing and usability depending on individual tax circumstances

• Property-specific governance rights under the applicable LLC documents, with routine matters handled by professional managers and specified major decisions subject to owner voting

This structure differs from a REIT by tying investor interests to specific, selectable properties rather than pooled fund exposure. You can evaluate individual short-term rental investments and allocate across multiple markets.

Benefits for STR Investors

Fractional ownership addresses several barriers that keep investors out of the markets analyzed above:

• Lower capital requirements compared with full property purchases, with an average mogul investment of around $10,000

• Geographic diversification across multiple properties and markets simultaneously

• Professionally vetted and managed properties, with tenant or guest coordination and maintenance handled by professional managers

• No landlord call at 3am about a broken air conditioner, since day-to-day operations are professionally managed

For investors who want exposure to income-producing residential real estate without direct landlord responsibilities, platforms that handle property selection, acquisition, and management provide a headache-free approach to real estate investing.

Why mogul Stands Out for Short-Term Rental Investing

mogul approaches residential real estate from an institutional perspective. It is a fractional real estate platform club founded by former Goldman Sachs executives with more than $10 billion of combined deal experience, and it applies institutional-style underwriting to asset-level fractional ownership. That combination, single-asset selection with institutional discipline, is what sets mogul apart.

What differentiates mogul:

Rigorous property selection. mogul reports that less than 1% of reviewed properties pass its diligence process. Research analysts screen nationwide demographic and employment data, develop market-specific buy boxes, and work alongside institutional partners using proprietary underwriting models. The focus is on high-growth secondary markets with strong price-to-rent dislocation, with opportunities sourced off-market and pre-market with verified operating actuals, so the pipeline narrows to properties that meet mogul's criteria before they reach investors.

Aligned incentives through co-investment. mogul invests alongside members in every property it offers, a structure intended to strengthen alignment between the platform and its investors.

Performance track record. mogul reports 18.8% average annual returns (IRR) across its portfolio, against 13.8% for single-family rentals and 9.8% for the S\&P 500 in the same comparison. Because that is a total-return measure, it should not be compared directly with the gross revenue yields published in market rankings, which deduct no expenses, financing, or taxes.

A defined target return profile. mogul's short-term rental strategy targets NOI yields of roughly 8% to 10%, levered yields of roughly 10% to 12%, and levered returns of roughly 13% to 18%. Mid-term rentals target levered returns of roughly 17% to 22%, and the target weighted average across mogul's single-family rental strategies is 15% to 20%.

First $10k protection for new members. If your total return on investments made in your first 7 days shows a loss of $10,000 after one year, mogul covers up to $10,000 of that loss from its own balance sheet capital. Members can also refer a friend and receive $50 when that friend invests.

Community and rewards. Community features such as mogul Clubs distribute up to 2% in rewards to members. The platform is built around monthly dividends, real-time appreciation, and tax benefits.

Operational execution. mogul coordinates day-to-day property management, tenant or guest operations, and maintenance through professional managers. Investors step back from direct landlord responsibilities while retaining investment, tax, and property-level governance rights, including votes on specified major decisions. Distributions reflect actual property performance rather than projections, and both their timing and amount depend on net distributable income.

mogul's public website displays several Texas property examples within a 15% to 20% target annual-return range. Each property listing and its offering documents set out availability, rental strategy, assumptions, fees, and the precise return metric that applies to that opportunity.

As with any real estate investment, returns, distributions, appreciation, and return of capital are not guaranteed. Real estate investments are property-specific and subject to operating, financing, market, legal, and tax conditions, and each property's governing and offering documents set out the terms that apply.

Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.

Frequently Asked Questions

How do STR regulations affect investment decisions in these markets?

Regulatory environments vary significantly by municipality, and market type is not a reliable proxy for regulatory burden. Local permitting requirements, occupancy taxes, inspection and owner-occupancy rules, renewal obligations, and recent ordinance changes all sit at the municipal level. A large listing base demonstrates market activity, not regulatory approval: Saint Paul, one of the markets profiled above, requires annual host licensing and supporting documentation, and enforcement reporting elsewhere shows that noncompliant listings can coexist with substantial platform activity. Requirements differ from one municipality to the next.

What financing options exist for STR investments in 2026?

Beyond conventional mortgages, DSCR (Debt Service Coverage Ratio) loans remain popular with STR investors. These loans qualify borrowers primarily on property income rather than personal DTI, though borrowers are still commonly subject to credit-score, LTV, down-payment, reserve, appraisal, and property-eligibility requirements. The average 30-year fixed mortgage rate was approximately 6.6% in late July 2026, and investor, non-QM, and DSCR loans may carry higher rates and fees than that conforming benchmark. Fractional ownership removes the need for investors to arrange their own property-level financing, because acquisition and any property-level debt are handled within the property structure, with leverage economics reflected at the asset level.

How should investors think about STR investment timing in 2026?

Supply growth slowed from 22.3% in 2022 to 6.9% in 2025 while demand continued rising over that period, which is a constructive backdrop, though it should not be presented as a current-month reading. Markets with infrastructure activity, such as Abilene's Stargate campus and Port Arthur's LNG terminal, could support contractor and business-travel demand, but the effect on STR occupancy, revenue, and home prices remains uncertain, and Abilene's first Stargate phase was already operational in 2025. These are underwriting theses to be tested, not timed entry windows. Fractional structures make it possible to allocate capital incrementally across multiple properties rather than concentrating in a single asset, though outcomes still depend on market conditions and property performance.

What operational considerations matter most for STR profitability?

For direct property owners, full-service STR management commonly costs approximately 20% to 30% of gross booking revenue and may improve operating execution, although occupancy and revenue outcomes vary with manager quality, baseline host performance, pricing, property characteristics, reviews, and market conditions. Furnishing quality, professional photography, and dynamic pricing tools all affect performance. Markets with extended-stay demand require different amenities than vacation markets, with full kitchens, reliable WiFi, and laundry facilities mattering more than pool access or beach proximity. On fractional platforms, property management and routine operational decisions are handled professionally, allowing investors to focus on portfolio allocation, while significant property decisions may still require an ownership vote.