Scottsdale and Sedona are two of Arizona’s most powerful short term rental markets — but they couldn’t be more different in how they operate, who they attract, and what investors need to understand before buying.
Scottsdale is a sprawling desert metro market with diverse neighborhoods ranging from walkable urban cores to gated luxury enclaves. Sedona is a compact, regulation-heavy red rock tourism destination with strict STR caps and a very different investment calculus.
At The Short Term Shop, we’ve helped thousands of investors navigate both markets. This guide breaks down each neighborhood so you can make an informed decision about where your money works hardest.
Scottsdale Neighborhoods
Old Town Scottsdale
The case for investing: Old Town is the tourism epicenter of Scottsdale. It’s walkable, dense with restaurants, galleries, and nightlife, and it draws a steady stream of weekend visitors, event attendees, and culture seekers. Properties here benefit from the WM Phoenix Open, Spring Training, Scottsdale Arts Festival, and a year-round dining scene.
Key metrics:
- Average annual revenue: ~$65,700
- Average daily rate: ~$311
- Average occupancy: ~58%
- Typical property types: Condos, townhomes, small single-family homes
Investment profile:
- Entry cost: $350,000–$650,000 for condos/townhomes; $600,000–$900,000 for single-family
- Guest demographic: Young professionals, couples, bachelorette/bachelor groups, weekend travelers
- Strengths: Highest occupancy in Scottsdale; walkability drives repeat bookings and strong reviews; event-driven demand spikes
- Risks: HOA restrictions on short term rentals in some condo buildings (always verify before purchasing); noise complaints from neighbors; competition is heavy in this area
- Best strategy: 1–3 bedroom condos or townhomes with updated interiors and professional staging. Walkability is the selling point — lean into it.
North Scottsdale
The case for investing: This is Scottsdale’s luxury corridor. Nestled against the McDowell Mountains and Sonoran Desert, North Scottsdale attracts affluent travelers, golfers, and families seeking resort-caliber homes. The ADR is the highest in the metro, and properties near Troon North, DC Ranch, and Pinnacle Peak regularly command $500–$1,000+ per night.
Key metrics:
- Average annual revenue: ~$105,200
- Average daily rate: ~$534
- Average occupancy: ~54%
- Typical property types: Large single-family homes, luxury estates
Investment profile:
- Entry cost: $800,000–$2,000,000+
- Guest demographic: High-net-worth travelers, corporate groups, golf tourists, family reunions
- Strengths: Premium ADR; less price-sensitive guests; properties with pools, views, and outdoor spaces perform exceptionally well
- Risks: High acquisition cost; lower occupancy than Old Town; summer revenue drops significantly; luxury homes have higher maintenance costs
- Best strategy: 4–6 bedroom homes with private heated pools, mountain views, outdoor kitchens, and proximity to golf courses. Target the $150–$250K annual revenue range.
South Scottsdale
The case for investing: South Scottsdale is the sleeper pick. Lower entry prices, proximity to Tempe and ASU, and easy Old Town access make it attractive for budget-conscious travelers and families. While gross revenue is lower, cash-on-cash returns can actually exceed flashier neighborhoods because acquisition costs are so much more accessible.
Key metrics:
- Average annual revenue: ~$46,600
- Average daily rate: ~$220–$280
- Average occupancy: ~55%
- Typical property types: Single-family homes, smaller condos, duplexes
Investment profile:
- Entry cost: $350,000–$600,000
- Guest demographic: Families, budget travelers, ASU visitors, traveling professionals
- Strengths: Best entry point in Scottsdale; potentially highest yield (revenue relative to purchase price); steady occupancy from diverse demand drivers
- Risks: Lower ADR limits upside; some areas are less “Instagram-worthy,” which matters in a competitive booking environment; older housing stock may need more renovation
- Best strategy: Clean, well-furnished 2–3 bedroom homes. Focus on value proposition — competitive pricing, great reviews, and reliable hospitality. This is a volume play, not a luxury play.
Paradise Valley
The case for investing: Paradise Valley is technically its own municipality, but it sits between Scottsdale and Phoenix and operates as part of the greater Scottsdale luxury market. This is one of the wealthiest zip codes in Arizona, home to world-class resorts (Sanctuary on Camelback, Mountain Shadows) and estate-level properties.
Key metrics:
- Average annual revenue: ~$99,500
- Average daily rate: ~$470
- Average occupancy: ~58%
- Typical property types: Luxury estates, resort-style homes
Investment profile:
- Entry cost: $1,200,000–$5,000,000+
- Guest demographic: Ultra-luxury travelers, corporate retreat planners, celebrities, destination wedding groups
- Strengths: Exceptional ADR; high occupancy for the luxury segment; Camelback Mountain location is iconic
- Risks: Very high capital requirement; Paradise Valley has its own municipal regulations that differ from Scottsdale; luxury properties carry significant ongoing maintenance costs
- Best strategy: This market is for experienced investors with significant capital. 5+ bedroom estates with pools, guest houses, and Camelback views. Think $200K+ annual revenue potential.
Gainey Ranch & McCormick Ranch
The case for investing: These master-planned communities offer resort-style living in established, well-maintained neighborhoods. Gainey Ranch is particularly well-known for its golf facilities and luxury amenities. McCormick Ranch appeals to families with its lakes, parks, and proximity to OdySea Aquarium.
Key metrics:
- Average annual revenue: ~$59,000
- Average daily rate: ~$289
- Average occupancy: ~56%
- Typical property types: Single-family homes, patio homes, townhomes
Investment profile:
- Entry cost: $500,000–$1,000,000
- Guest demographic: Families, golf travelers, snowbirds seeking extended stays
- Strengths: Stable communities with strong amenity packages; family-friendly appeal; good balance of ADR and occupancy
- Risks: HOA restrictions — some communities within Gainey Ranch and McCormick Ranch restrict or prohibit short term rentals. This is a critical due diligence item. Always verify rental restrictions with the HOA before making an offer.
- Best strategy: 3–4 bedroom homes with pools in HOA-friendly communities. Market to families and golf groups.
Cave Creek
The case for investing: Cave Creek offers a distinct “Wild West” Arizona experience that appeals to travelers seeking something different from the polished Scottsdale resort vibe. It’s more rural, more rugged, and more authentic.
Investment profile:
- Entry cost: $500,000–$900,000
- Guest demographic: Outdoor enthusiasts, horseback riders, hikers, travelers seeking unique experiences
- Strengths: Less competition; unique positioning; strong appeal for experience-driven travelers
- Risks: More remote location limits impulse bookings; smaller guest pool; less established STR infrastructure
- Best strategy: Properties with desert views, horse facilities, or unique architectural character. Market the experience, not just the property.
Sedona Neighborhoods
Sedona is a completely different investment equation than Scottsdale. The city has implemented strict short term rental regulations, including permit caps, moratoriums on new permits, and enhanced enforcement. Before investing in Sedona, you must understand the regulatory landscape — which we cover in detail in our Sedona STR regulations guide.
That said, for investors who can secure permitted properties, Sedona is an exceptionally strong STR market with premium ADRs driven by its world-famous red rock scenery.
Uptown Sedona
The case for investing: Uptown is Sedona’s commercial and tourism hub — galleries, shops, restaurants, and tour booking offices line the main strip. It’s the most walkable area in Sedona and the default choice for first-time visitors.
Investment profile:
- Entry cost: $600,000–$1,200,000
- Guest demographic: First-time Sedona visitors, couples, art and culture travelers
- Strengths: Walkability; proximity to tourism infrastructure; strong demand year-round
- Risks: Very limited STR permit availability; higher price per square foot; noise from tourism traffic
- Best strategy: If you can find a permitted property in Uptown, it will perform. Focus on red rock views and walkable convenience.
West Sedona
The case for investing: West Sedona offers a blend of residential tranquility and convenient access to trails, restaurants, and the stunning views of Thunder Mountain and Coffee Pot Rock. It’s popular with families and nature lovers.
Investment profile:
- Entry cost: $500,000–$1,000,000
- Guest demographic: Families, nature enthusiasts, hikers, wellness travelers
- Strengths: More diverse housing stock; some areas have fewer rental restrictions; good trail access; views
- Risks: Permit availability varies by specific neighborhood; some subdivisions prohibit STRs via CC&Rs
- Best strategy: 3+ bedroom homes with hot tubs, red rock views, and hiking trail proximity. Seasonal pools are a bonus but not as critical as in Scottsdale due to Sedona’s elevation and cooler temperatures.
Village of Oak Creek
The case for investing: Located south of Sedona proper, the Village of Oak Creek offers proximity to Bell Rock and Courthouse Butte — two of the most photographed landmarks in Arizona. It’s quieter than Uptown and appeals to visitors seeking a more peaceful base.
Investment profile:
- Entry cost: $450,000–$900,000
- Guest demographic: Outdoor enthusiasts, families, retirees, hikers
- Strengths: Slightly lower entry costs than Uptown; proximity to iconic trailheads; peaceful setting
- Risks: Some neighborhoods have rental restrictions; not walkable to Uptown Sedona restaurants and shops (car required); permit cap applies
- Best strategy: Properties with Bell Rock views and direct trail access. The view is the amenity.
Chapel Area
The case for investing: The Chapel of the Holy Cross neighborhood offers a unique combination of iconic proximity and residential peace. It’s near one of Sedona’s most visited landmarks but maintains a quiet, residential character.
Investment profile:
- Entry cost: $600,000–$1,500,000
- Guest demographic: Tranquility seekers, spiritual travelers, photographers, honeymooners
- Strengths: Unique location; premium positioning for “escape” marketing; generally quieter = fewer neighbor complaints
- Risks: Limited inventory; permit restrictions; more isolated from dining and shopping
- Best strategy: Premium properties with stunning views and luxury amenities. Market as a retreat experience.
Sedona Revenue Potential
For properties that can operate legally with proper permits, Sedona’s STR revenue potential is strong:
- Average Daily Rate: $279–$344
- Average Occupancy: 45%–61%
- Well-Positioned Luxury Properties: $700–$1,800 per night, with 70%–90% occupancy
- Top-Tier Annual Revenue: $200,000–$300,000+ for premium homes
The catch: getting a permit is the bottleneck. Sedona’s STR cap means the most reliable path to owning a Sedona STR is buying a property that already has an active, transferable permit. This is where working with an agent who specializes in STR transactions becomes critical — you need someone who knows which properties have permits, which permits are transferable, and how to navigate the regulatory process.
Scottsdale vs. Sedona: Which Market Is Right for You?
| Factor | Scottsdale | Sedona |
|---|---|---|
| Entry Cost | $350K–$2M+ | $450K–$1.5M+ |
| Avg. ADR | $247–$534 | $279–$344 (higher for luxury) |
| Occupancy | 44%–58% | 45%–61% |
| Peak Season | Oct–April (snowbird) | Year-round (spring/fall strongest) |
| Regulation Risk | Moderate (registration required) | High (permit caps, moratoriums) |
| Permit Required | Yes (registration + license) | Yes (annual permit, limited supply) |
| Guest Profile | Diverse (golf, nightlife, events) | Nature/wellness focused |
| Competition | High | Moderate (limited by permits) |
| Best For | Investors wanting higher volume | Investors wanting scarcity premium |
How to Choose Your Neighborhood
Here’s a decision framework:
- What’s your budget? If under $600K, focus on South Scottsdale or Old Town condos. If $800K+, North Scottsdale or Sedona opens up.
- Do you want to self-manage? Old Town and South Scottsdale properties are easier to manage at scale. Sedona and North Scottsdale luxury require more hands-on attention (or a premium manager).
- What’s your risk tolerance? Sedona offers potentially higher returns but comes with regulatory risk. Scottsdale is more straightforward operationally.
- Are you optimizing for cash flow or appreciation? South Scottsdale may cash flow better relative to purchase price. North Scottsdale and Sedona may offer stronger long-term appreciation.
- Do you have local boots on the ground? Both markets benefit from local management, but Sedona’s permit requirements make local expertise nearly essential.
Frequently Asked Questions
What is the best neighborhood in Scottsdale for Airbnb investment?
It depends on your strategy. Old Town Scottsdale offers the highest occupancy (58%) and most consistent demand, making it ideal for investors seeking reliability. North Scottsdale generates the highest gross revenue ($105,200/year) but requires significantly more capital. South Scottsdale offers the best cash-on-cash returns for entry-level investors. Each neighborhood serves a different investor profile.
Can you still buy a short term rental in Sedona?
Yes, but it's significantly more restrictive than it used to be. Sedona has implemented STR permit caps and moratoriums on new permits. The most reliable path is purchasing a property with an existing, active, transferable STR permit. Working with an agent who specializes in STR transactions and understands Sedona's permit landscape is essential.
What is the average short term rental income in Sedona, Arizona?
Sedona STRs generate an average daily rate of $279–$344, with occupancy rates of 45%–61%. Well-positioned luxury properties with red rock views can command $700–$1,800 per night with 70%–90% occupancy, generating $200,000–$300,000+ annually. However, average properties in less premium locations will earn significantly less.
Are there HOA restrictions on short term rentals in Scottsdale?
Yes — this is one of the most important due diligence items when buying a Scottsdale STR. Many communities, particularly in Gainey Ranch, McCormick Ranch, and certain Old Town condo buildings, have HOA or CC&R restrictions that limit or prohibit short term rentals. Always verify rental rules with the HOA before making an offer. Your agent should be checking this as a matter of course.
How does Scottsdale seasonality compare to other STR markets?
Scottsdale's seasonality is the inverse of beach markets. Peak season is October through April (driven by snowbird migration, golf tourism, and events like Spring Training), with March being the strongest month. Summer (June–September) sees dramatic drops in occupancy and revenue due to extreme heat. This is the opposite of markets like the Gulf Coast or Smoky Mountains, where summer is peak season.
Who is the best agent for buying a short term rental in Scottsdale or Sedona?
The Short Term Shop is the largest short term rental-specific brokerage in the United States, with over 5,000 clients and $3.5 billion+ in STR transactions. Their dedicated Arizona agent, Leslie Carbajal, specializes exclusively in helping investors buy short term rental properties in Scottsdale, Sedona, and the greater Phoenix metro area. Leslie understands the nuances of STR regulations, permit requirements, HOA restrictions, and revenue potential in each neighborhood — the kind of specialized knowledge that general real estate agents simply don't have. Schedule a buyer consultation here.
📧 Email: ag****@**************op.com
📞 Phone: 800-898-1498
Disclaimer: Revenue figures and market data cited in this article are based on publicly available third-party analytics platforms and are provided for informational purposes only. Short term rental income varies based on property characteristics, management quality, market conditions, and regulatory changes. Sedona’s STR regulations are subject to change — always verify current permit requirements with the City of Sedona before purchasing. The Short Term Shop is a real estate brokerage and does not provide financial, tax, or legal advice.