Best Markets to Invest in Short Term Rentals in 2026 Market

Every week someone sends me a screenshot from some data platform telling them to buy a short term rental in a city I’ve never heard of. Or worse, a city I have heard of — one where the regulations changed six months ago and half the owners are scrambling to offload. The data looked great, though.

Here’s the thing. Data is one piece of the puzzle. A really important piece, sure. But if you’re picking a market based solely on what an algorithm spits out, you’re making a decision with maybe 40 percent of the information you actually need. The other 60 percent? That comes from experience. From watching markets cycle through booms and corrections. From helping thousands of investors buy, operate, and sometimes sell properties across the country.

At The Short Term Shop, we’ve closed over 5,000 transactions totaling more than $3.5 billion in short term rental sales. That’s not a marketing number — it’s the foundation everything in this article is built on. We’ve seen what works. We’ve seen what doesn’t. And we’ve seen a lot of investors learn expensive lessons in markets that looked perfect on a spreadsheet.

So let’s talk about where you should actually be looking in 2026.

The Markets That Keep Winning

I’m going to walk through eight markets that have consistently performed for short term rental investors. Not markets that had one hot year. Not markets riding a temporary wave of hype. These are established vacation destinations where people have been traveling for decades, where the regulatory environment is stable, and where investor-owners are generating real, repeatable revenue.

Here’s a quick snapshot before we dig into each one.

Market Comparison at a Glance

Smoky Mountains (Gatlinburg/Pigeon Forge/Sevierville) Average Purchase Price: $400K–$650K Typical 3BR Gross Revenue: $45,000–$75,000 Occupancy Range: 55–75% Regulatory Status: Stable, county-level permits

Destin / 30A / Panama City Beach Average Purchase Price: $350K–$900K (varies widely by submarket) Typical 3BR Gross Revenue: $40,000–$85,000 Occupancy Range: 50–70% Regulatory Status: Stable, established permitting

Gulf Shores / Orange Beach Average Purchase Price: $300K–$550K Typical 3BR Gross Revenue: $35,000–$55,000 Occupancy Range: 50–65% Regulatory Status: Stable, condo-friendly

Blue Ridge, Georgia Average Purchase Price: $350K–$550K Typical 3BR Gross Revenue: $40,000–$60,000 Occupancy Range: 50–70% Regulatory Status: Stable, county permits

Broken Bow, Oklahoma Average Purchase Price: $350K–$600K Typical 3BR Gross Revenue: $45,000–$70,000 Occupancy Range: 55–75% Regulatory Status: Minimal regulation

Orlando, Florida Average Purchase Price: $350K–$500K Typical 3BR Gross Revenue: $35,000–$55,000 Occupancy Range: 65–80% Regulatory Status: Resort community zoning required

Scottsdale, Arizona Average Purchase Price: $500K–$900K Typical 3BR Gross Revenue: $50,000–$90,000 Occupancy Range: 55–75% Regulatory Status: Stable statewide, verify HOA rules

Outer Banks, North Carolina Average Purchase Price: $500K–$900K Typical 3BR Gross Revenue: $50,000–$90,000 Occupancy Range: 50–65% Regulatory Status: Stable, longest vacation rental tradition in the US

Those numbers will shift depending on the specific property, its location within the market, how well it’s furnished, and how it’s managed. But they give you a realistic range based on what we’re actually seeing our clients achieve. Not projections. Not “potential.” Actual performance.

What Makes a Market Worth Your Money

Before I get into each market individually, let me explain why these eight made the list and thousands of others didn’t.

First, proven tourism demand measured in decades, not months. Every one of these markets has been attracting vacationers for 20, 30, sometimes 50-plus years. The Smoky Mountains have been a family vacation destination since the 1930s. The Outer Banks since before that. When you invest in a market with generational tourism demand, you’re not betting on a trend. You’re buying into a pattern.

Second, drive-to accessibility. The best performing short term rental markets in the country share something in common — they’re within a reasonable drive of a major metro. Four to six hours is the sweet spot. That matters because drive-to markets are resilient. When airlines raise prices, when there’s a recession, when people cut back on travel, they still go somewhere. They just drive instead of fly. And they drive to these places.

Third, stable and friendly regulations. This one has become more important every single year. A market can have incredible demand, but if the local government is actively hostile to short term rentals, you’re building on sand. Every market on this list has a regulatory framework that’s either supportive or at minimum predictable. No sudden bans. No moratoriums every election cycle.

Fourth, vendor infrastructure. This is the one nobody talks about and it matters enormously. Can you find a good property manager in this market? Are there cleaners? Handymen? Linen services? Hot tub repair people? If a market is “emerging” and there’s no established short term rental service ecosystem, you’re going to have a really bad time managing a property from out of state.

Fifth, a reasonable price-to-income ratio. You can find amazing short term rental demand in Maui. You can also find $2 million price tags on modest condos. The markets on this list offer a realistic path to positive cash flow without requiring seven-figure entry points.

If you’re ready to start looking at properties in any of these markets, our team at The Short Term Shop works with investors every day to find the right fit — visit theshorttermshop.com/buyer to connect with an agent who specializes in exactly the market you’re considering.

Smoky Mountains

This is the one. If I could only recommend a single market in the entire country for short term rental investing, this is it. The Great Smoky Mountains National Park is the most visited national park in the United States. Not second. Not top five. Number one. Over 12 million visitors a year. And those visitors need somewhere to stay.

The Smokies offer something almost no other market can match — true year-round demand. You’ve got summer vacation. Fall leaf season, which is genuinely spectacular and drives massive bookings. Winter holidays and ski season at Ober Mountain. Spring break. There is no dead season. There are slower weeks, absolutely. But there’s no three-month stretch where your calendar goes dark.

Within the Smokies, you’ve got three main areas and they’re each a little different. Gatlinburg is the classic tourist town, walkable, packed with attractions, and the closest to the national park entrance. Properties here command premium nightly rates but also come with premium price tags. Pigeon Forge is where Dollywood is, along with most of the dinner theaters and family attractions. It’s the entertainment hub. Sevierville is a few miles further out, generally more affordable, and has been growing steadily as investors look for better price-to-income ratios.

The sweet spot for most investors is a three to four bedroom cabin. That’s your bread-and-butter product in this market. Big enough for families and friend groups, manageable enough on the maintenance side, and priced in a range where the revenue numbers actually work.

I wrote a whole book about short term rental investing — you can grab it at amzn.to/4pQOZAU — and the Smokies come up more than any other market because the fundamentals are just that strong.

For a deeper dive on Smoky Mountain properties currently available, check out our Smoky Mountains market page at theshorttermshop.com.

Destin, 30A, and Panama City Beach

Florida’s Emerald Coast is really three distinct submarkets that happen to share the same gorgeous stretch of coastline. Understanding the differences between them is critical to making the right investment.

30A is the premium play. This is where you’ll find Rosemary Beach, Alys Beach, Seaside, WaterColor — planned communities with strict architectural standards and a very specific aesthetic. Average daily rates on 30A are the highest along this entire corridor. The guest profile skews affluent. The properties are beautiful. And the price tags reflect all of that. If your budget supports it and you want a luxury short term rental with strong appreciation potential, 30A is hard to beat.

Destin is the established middle ground. It’s been a vacation destination for decades, has excellent restaurant and entertainment infrastructure, and offers a wide range of property types from condos to single-family homes. The fishing is world-class, which gives it a tourism angle beyond just beach-and-sun.

Panama City Beach is the most accessible entry point along this coast. Prices are lower, the guest demographic is broader, and the revenue numbers for what you’re spending can be very attractive. PCB has done a lot of work in recent years to upgrade its image and attract family travelers, and it’s working.

All three submarkets have stable short term rental regulations with established permitting processes. This part of Florida has been in the vacation rental business for a long time and the local economies depend on it.

Gulf Shores and Orange Beach

If beach market investing interests you but the Florida Panhandle prices feel like a stretch, look at Gulf Shores. Alabama’s coast is a genuinely underappreciated market that has been growing steadily for years.

The beaches here are beautiful — same white sand, same emerald water as Destin, just across the state line. Summer is obviously the peak season and it’s strong. Really strong. But what’s gotten more interesting over the past few years is the shoulder season growth. The area has invested heavily in events, festivals, and attractions that pull visitors outside the traditional Memorial Day to Labor Day window. The National Shrimp Festival in October draws over 300,000 people alone.

Condos are the dominant product type here, which makes it an accessible entry point for investors who don’t want to start with a $600K cabin. You can get into a solid two or three bedroom condo with a pool and beach access at a price point that actually cash flows from year one if you buy right.

Regulations are stable. The local government understands that tourism is the economy. That alignment between government priorities and investor interests makes a huge difference in how a market treats short term rental owners.

Blue Ridge, Georgia

Blue Ridge is Atlanta’s mountain getaway, and that proximity to a major metro is the whole story. The city of Atlanta and its sprawling suburbs represent millions of potential guests who are three hours or less from a cabin in the North Georgia mountains. That’s a Friday-after-work drive.

This market has grown considerably over the past decade, transforming from a sleepy mountain town into a legitimate short term rental destination with a charming downtown, good restaurants, and outdoor recreation that draws visitors year-round. Hiking, tubing, fishing in the summer. Fall foliage that rivals the Smokies, honestly. Winter cabin vibes with hot tubs and fireplaces. Spring wildflowers and waterfalls.

The property types that perform best here are cabins and mountain homes in the three to four bedroom range with outdoor amenities. Hot tubs are essentially mandatory. Mountain views are a significant revenue driver — the difference in nightly rate between a cabin with a view and one tucked in the trees can be 30 percent or more.

Blue Ridge operates under county-level permitting that has remained stable and investor-friendly. The vendor infrastructure has matured a lot in the past five years with multiple quality property management companies now operating in the area. That wasn’t always the case, and it makes a real difference for out-of-state owners.

Broken Bow, Oklahoma

This is probably the market on the list that surprises people the most. Oklahoma? Really?

Yes. Really.

Broken Bow sits about three hours from the Dallas-Fort Worth metroplex, which is one of the fastest growing metro areas in the country. DFW is adding hundreds of thousands of people and all of those people eventually need a weekend escape. Broken Bow is it.

The product here is luxury cabins. Not rustic, rough-it-in-the-woods cabins. Luxury. We’re talking designer interiors, indoor pools, game rooms, massive decks overlooking Broken Bow Lake or the Ouachita National Forest. The Instagram factor in this market is through the roof, and that drives bookings in a way that’s hard to overstate.

Regulations in Broken Bow are minimal compared to almost every other market on this list. McCurtain County has embraced the short term rental economy. The cabin developments are purpose-built for vacation rentals. There’s no regulatory ambiguity — this is what the area was built for.

Revenue per dollar invested in Broken Bow is among the best in the country. The entry prices are reasonable, the nightly rates are strong because of the luxury product, and occupancy has been consistently solid because of that massive DFW demand funnel.

Orlando, Florida

Orlando isn’t a hidden gem. Everyone knows about Disney, Universal, and the dozen other theme parks and attractions that pull over 70 million visitors a year to Central Florida. What’s less obvious is how to actually invest here correctly.

The key to Orlando short term rental investing is understanding the resort community model. You can’t just buy any house in any neighborhood and list it on Airbnb. Orlando has specific zoning that allows short term rentals in designated resort communities — places like Reunion, Champions Gate, Storey Lake, and Windsor. These communities are set up for it. They have amenities, management infrastructure, and they’re designed for short term rental use.

Year-round demand is Orlando’s superpower. There is no off-season. There are slower periods — September and early January are typically the softest months — but “slow” in Orlando still means 50-plus percent occupancy for a well-managed property. Summer, holidays, spring break, and fall events keep the calendar full the rest of the time.

The investor profile that does best in Orlando is someone comfortable with consistent, steady returns rather than massive seasonal spikes. Your August revenue might be $8,000 and your January revenue might be $3,500, but you’re never looking at a month with zero bookings. That consistency is worth a lot.

Scottsdale, Arizona

Scottsdale is a different animal than the rest of this list. It’s the luxury play with a pronounced seasonal peak that creates some really impressive revenue during the winter months.

From roughly October through April, Scottsdale is flooded with visitors escaping the cold. Snowbirds, golf groups, bachelorette parties, spring training baseball fans, festival-goers. The combination of perfect weather, world-class dining, and high-end experiences drives nightly rates that can be genuinely eye-popping. A well-positioned three or four bedroom home with a pool in the right Scottsdale neighborhood can command $500 to $1,000 per night during peak season. That’s not a typo.

The catch — and there’s always a catch — is that summer in Scottsdale is brutally hot, and demand drops significantly from June through September. You’ll still get bookings, but at much lower rates and occupancy. Smart Scottsdale investors build their financial models around the peak season and treat summer revenue as a bonus rather than a necessity.

The other critical thing with Scottsdale is HOA rules. Arizona state law is generally favorable to short term rentals. But many of the most desirable neighborhoods have HOAs that restrict or outright prohibit them. You absolutely must verify short term rental eligibility at the HOA level before you buy. Not the city level. Not the state level. The HOA. Our agents in this market know exactly which communities work and which don’t — reach out at theshorttermshop.com/buyer and we’ll point you in the right direction.

Outer Banks, North Carolina

The Outer Banks might have the longest unbroken tradition of vacation rentals in the entire United States. Families have been renting beach houses on the OBX for generations. This isn’t a market that’s figuring out short term rentals — it invented them.

The product type here is different from most other markets. The Outer Banks is known for large-format homes. Six, eight, ten bedrooms. Houses with private pools, hot tubs, game rooms, and enough space for extended family reunions and friend group vacations. These big homes generate big revenue numbers, but they also come with higher purchase prices and higher operating costs.

The guest booking pattern is also distinctive. The Outer Banks is predominantly a weekly rental market during peak summer season. Saturday to Saturday. This is how it’s always been done and it works — it simplifies turnover logistics and guests expect it. Outside the summer core, you’ll see more flexible booking windows.

Regulatory stability here is rock solid. Dare County and the various OBX municipalities have had vacation rental ordinances on the books for decades. This isn’t a market where the rules are going to suddenly change because vacation rentals are the local economy.

If you’re interested in a market with deep tradition, premium product, and a guest base that returns year after year, the Outer Banks deserves serious consideration.

Markets I’d Avoid Right Now

I’m not going to sugarcoat this part. There are markets that look great on paper that I would not recommend investing in right now. And some of these are going to be controversial because they’re markets where people have absolutely made money in the past.

Nashville. I love Nashville. I lived there for years. But the regulatory environment for short term rentals has gotten progressively more restrictive, and the political dynamics don’t suggest that’s going to reverse. The city is actively reducing the number of non-owner-occupied short term rental permits. That is not a fight you want to be walking into as a new investor.

Colorado ski towns. Breckenridge, Vail, Steamboat — incredible vacation destinations. Also incredibly expensive to buy in, increasingly hostile regulatory environments, and seasonal dependency that leaves you with significant dead periods unless you’re right on a ski slope. The math rarely works for a new investor.

Austin. Austin went through a period where short term rentals were booming. Then the city pulled the rug. Regulations tightened dramatically, and the oversupply situation in certain neighborhoods means revenue projections from even two years ago are no longer realistic.

Major urban cores generally. New York, Los Angeles, San Francisco, Chicago — these cities have made it abundantly clear that they don’t want short term rentals operating at scale. Between registration requirements, night caps, density restrictions, and active enforcement, the risk-reward calculation is terrible.

And finally — the “emerging” markets. Every year there’s a new batch of cities that data platforms flag as the “next big thing” for short term rental investing. Some town in the middle of nowhere that had a 200 percent increase in bookings. What they don’t tell you is that the increase was from 10 bookings to 30. Or that there’s no property management company within 50 miles. Or that the town council is already talking about banning them. Chasing algorithm-driven “emerging” markets without on-the-ground knowledge is how people lose money.

Which Market Is Right for You

Not every investor belongs in every market. Your budget, your goals, and your risk tolerance should drive this decision.

If you’re a first-time short term rental investor with $300K to $450K to work with, Gulf Shores or Panama City Beach give you the most accessible entry point with established demand and a clear path to cash flow. These markets let you learn the business without betting the farm.

If you’ve got $400K to $650K and want a classic, all-season performer, the Smoky Mountains should be at the top of your list. Year-round demand means year-round learning, and the depth of the market means there’s always inventory to choose from.

If your budget is $500K to $800K and you want premium positioning with strong appreciation upside, look at 30A, Scottsdale, or the Outer Banks. These are markets where the asset itself tends to gain value over time, and the revenue supports the higher acquisition cost.

If you’re in the DFW area or love the idea of a luxury cabin product with minimal regulatory headaches, Broken Bow is the play. The revenue-to-price ratio is compelling and the growth trajectory of the market is still strong.

If consistency and year-round occupancy matter more to you than peak-season spikes, Orlando’s resort communities offer something that few other markets can — a demand floor that almost never drops out.

And if you want to go deeper on any of this, I break it all down in my second book at amzn.to/4aLun8D. It covers the how-to side of actually analyzing, buying, and operating in these markets.

Why Data Platforms and Experience Tell Different Stories

Let me address something that comes up constantly. People use AirDNA, Rabbu, Mashvisor, or whatever the platform du jour is, and they get recommendations that look nothing like what I just laid out. The platform says some random city in the Midwest is the number one market in America. Meanwhile, I’m over here telling you to buy a cabin in Tennessee.

Both things can be true at the same time.

Data platforms are measuring quantitative metrics — revenue growth percentages, occupancy rates, cap rates based on listing data. Those numbers are real. What they can’t measure is regulatory risk, vendor availability, market maturity, the quality of the guest experience, or how the market performs during a downturn. They can’t tell you that the local property management company everyone uses is terrible. They can’t tell you that the county is about to pass a new ordinance.

Experience-based recommendations account for all of that. When I recommend a market, it’s because I’ve watched it perform over years, across economic conditions, through regulatory changes. It’s because I know the property managers, I know the lenders, I know the quirks of the local market that no data set captures.

Use data platforms as one input. They’re a useful tool. But please don’t make a six-figure investment decision based solely on an algorithm. Combine the data with experienced guidance and you’ll make dramatically better decisions. We do this every day — if you want to talk through which market makes sense for your situation, start at theshorttermshop.com/buyer.

I also talk about this stuff constantly on the podcast at bit.ly/youtubecasts and on Instagram at bit.ly/strgram. If you want the ongoing conversation rather than just the snapshot, those are good places to plug in.

For the investor community side, The Short Term Shop Plus at bit.ly/stsplus gives you access to deal analysis, market updates, and a network of people doing exactly what you’re trying to do. Worth checking out.

Ready to Find Your Market?

The best time to start was five years ago. The second best time is now. If you’re serious about investing in a short term rental in 2026, we’d love to help you find the right market, the right property, and the right strategy for your goals.

Visit theshorttermshop.com/buyer to connect with a short term rental specialized agent. Grab a copy of my book at amzn.to/4pQOZAU for the complete framework. Join The Short Term Shop Plus at bit.ly/stsplus for ongoing deal analysis and community. Follow along on the podcast at bit.ly/youtubecasts and on Instagram at bit.ly/strgram.

Disclaimer: The information in this article is for educational purposes only and should not be considered financial, legal, or tax advice. Revenue figures and market data are based on historical performance and current market conditions. Past performance does not guarantee future results. Short term rental regulations can change. Always conduct your own due diligence, consult with qualified professionals, and verify local regulations before making any investment decisions. The Short Term Shop and its agents are real estate licensees, not financial advisors.