Arizona offers two of the most compelling STR markets in the Southwest, and they could not be more different. Sedona attracts hikers, spiritual seekers, and nature lovers with its iconic red rock formations. Scottsdale draws resort goers, golfers, and snowbirds with its luxury amenities and year round sunshine. Both generate strong rental revenue, but the guest profiles, seasonality, price points, and investment dynamics are distinct.
If you are weighing a short term rental investment in Sedona against one in Scottsdale, this guide breaks down the key differences to help you make the right call.
The Guest Experience: Red Rocks vs Resort Life
Sedona: The Nature and Wellness Destination
Sedona’s appeal centers on its natural beauty and spiritual energy. Guests come for:
- Hiking and outdoor recreation. Cathedral Rock, Devil’s Bridge, Bell Rock, and dozens of other trails draw hikers of all skill levels. This is Sedona’s number one draw
- Spiritual and wellness tourism. Sedona’s energy vortexes, spas, yoga retreats, and holistic wellness scene attract a specific and loyal guest demographic
- Photography and scenic beauty. The red rock formations create a landscape unlike anything else in the country. Guests come specifically to see and photograph the scenery
- Wine and dining. Sedona has developed a strong culinary and wine scene, with tasting rooms along the Verde Valley Wine Trail
Typical Sedona guest: Couples (30 to 60 years old), small families, wellness retreat groups, photography enthusiasts, anniversary and celebration travelers. Guests tend to be active during the day (hiking, exploring) and want a comfortable, well appointed home base to return to.
Scottsdale: The Luxury Resort Alternative
Scottsdale is Arizona’s premier resort and lifestyle destination. Guests come for:
- Golf. Scottsdale has over 200 golf courses within driving distance. Golf tourism is a massive economic driver, especially from October through April
- Nightlife and dining. Old Town Scottsdale is packed with restaurants, bars, clubs, and entertainment. The food scene is nationally recognized
- Spring training baseball. The Cactus League brings baseball fans from across the country every February and March
- Pool and resort lifestyle. Many Scottsdale guests want a vacation that revolves around the pool, spa treatments, and relaxation without the physical exertion of hiking
- Snowbird migration. Thousands of visitors from cold weather states spend extended periods in Scottsdale from November through March
Typical Scottsdale guest: Golf groups (mostly men, 40 to 65), bachelorette parties, spring training fans, snowbirds (60+, extended stays), families visiting for spring break, conference attendees.
Why the Guest Difference Matters
Your guest profile determines your amenity requirements, your pricing strategy, and your marketing approach:
- Sedona cabins need: Mountain/red rock views, hot tubs, outdoor spaces, hiking proximity, serene design, stargazing friendly locations
- Scottsdale properties need: Pools (heated pools are a major differentiator), proximity to golf courses and Old Town, modern/luxury interiors, entertainment spaces, multiple bedrooms for groups
Buying a Scottsdale style property in Sedona (or vice versa) means mismatching your property with your guest base. Know who you are serving before you buy.
Seasonality: When the Money Comes In
Sedona’s Seasonal Pattern
Sedona has two distinct peak seasons and two softer periods:
- Spring (March through May): Peak season. Perfect hiking weather (60s to 80s), wildflowers, clear skies. Highest occupancy and nightly rates
- Fall (September through November): Second peak season. Cooler temperatures return after summer heat, fall colors in Oak Creek Canyon, ideal outdoor conditions
- Summer (June through August): Warm season. Temperatures reach the low to mid 90s, which is hot but still cooler than Phoenix/Scottsdale. Occupancy dips slightly but Sedona still draws visitors escaping the valley heat below
- Winter (December through February): Softest season, but mild temperatures (40s to 60s) still attract visitors. Holiday bookings are strong, and Sedona occasionally gets light snow on the red rocks, which is a unique draw
Revenue distribution: Expect roughly 60% to 65% of annual revenue in the spring/fall peak seasons and 35% to 40% during summer and winter.
Scottsdale’s Seasonal Pattern
Scottsdale is more dramatically seasonal:
- Peak season (October through April): This is when the money rolls in. Snowbirds, golf tourists, spring training fans, and event attendees flood the market. Nightly rates can be 2x to 3x summer rates
- Shoulder season (May and September): Transitional months with moderate demand
- Summer (June through August): The low season. Temperatures exceed 100 degrees regularly, and tourism drops off significantly. Occupancy can fall to 40% to 50% for properties that do not adjust pricing aggressively
Revenue distribution: Peak season (October through April) accounts for 70% to 80% of annual revenue in Scottsdale. Summer is a grind.
Seasonality Winner: Sedona
Sedona’s more balanced seasonal profile reduces risk. You are not as dependent on a single peak season to make your numbers work. Scottsdale’s extreme summer heat creates a pronounced low season that requires aggressive pricing to maintain any occupancy.
Price Comparison: What You Will Pay
Sedona Purchase Prices
- Entry level (1 to 2 bedroom): $400,000 to $550,000
- Mid range (3 bedroom with views): $550,000 to $800,000
- Premium (4+ bedroom, red rock views): $800,000 to $1,200,000+
Scottsdale Purchase Prices
- Entry level (2 bedroom condo): $350,000 to $500,000
- Mid range (3 to 4 bedroom home with pool): $500,000 to $800,000
- Premium (5+ bedroom, luxury finishes, pool): $800,000 to $1,500,000+
Scottsdale offers a slightly wider range of entry points, especially at the condo level. Sedona’s limited inventory and restricted development keep prices elevated even for smaller properties. Both markets trend expensive compared to cabin markets like Broken Bow or the Smokies, but the revenue potential reflects the higher entry cost.
Revenue Comparison
Sedona Revenue Benchmarks
| Percentile | Annual Gross Revenue |
|---|---|
| 50th percentile | $48,000 |
| 75th percentile | $72,000 |
| 90th percentile | $105,000 |
Scottsdale Revenue Benchmarks
| Percentile | Annual Gross Revenue |
|---|---|
| 50th percentile | $45,000 |
| 75th percentile | $70,000 |
| 90th percentile | $110,000 |
At the median and 75th percentile, Sedona and Scottsdale perform similarly. At the 90th percentile, Scottsdale’s larger luxury properties can edge ahead due to the group booking premium (golf trips, bachelorette parties, large families).
The key difference is how the revenue arrives. Sedona distributes more evenly throughout the year. Scottsdale concentrates revenue heavily in peak season, which means your cash flow will be lumpy: very strong from October to April and thin to negative in summer.
Operating Costs Comparison
Where Sedona Costs More
- Water: Desert water costs are higher, but Sedona’s cooler climate means less evaporation than Scottsdale
- Furnishing expectations: Sedona guests expect elevated, nature inspired design. Cutting corners on furnishings hurts you more here
Where Scottsdale Costs More
- Summer cooling: Scottsdale’s extreme summer heat drives electricity costs significantly higher than Sedona. Expect $300 to $500+ per month in summer for A/C and pool equipment
- Pool maintenance: Pools are essentially mandatory in Scottsdale. Annual pool costs run $3,000 to $5,000 including maintenance, chemicals, equipment, and heating during cooler months
- Landscaping: Scottsdale properties with desert landscaping require irrigation and regular maintenance to maintain curb appeal
Where Costs Are Similar
- Property management fees (18% to 28% in both markets)
- Insurance ($2,000 to $4,500)
- Cleaning costs ($125 to $225 per turn)
- Property taxes (Yavapai County for Sedona, Maricopa County for Scottsdale, both moderate)
Regulatory Environment
Sedona
Sedona has implemented STR regulations in recent years. The City of Sedona requires STR operators to register and comply with local rules including occupancy limits, noise restrictions, and parking requirements. While the regulations are not as restrictive as some markets (like certain Colorado mountain towns), they are more structured than fully unregulated markets.
Scottsdale
Arizona state law (SB 1350) generally preempts local governments from banning short term rentals, which provides a level of regulatory certainty for Scottsdale investors. However, the City of Scottsdale has implemented regulations around noise, parking, occupancy limits, and nuisance behavior. The regulatory environment is STR friendly but not a free for all.
Both markets are navigable from a regulatory standpoint, and neither is at significant risk of outright STR bans under current Arizona state law.
Which Market Is Right for You?
Choose Sedona if:
- You want more balanced year round revenue
- You are targeting couples, nature lovers, and wellness travelers
- You prefer a smaller, more exclusive market with limited inventory
- You value long term appreciation in a supply constrained market
- You want a property you might also enjoy using personally
Choose Scottsdale if:
- You want to capitalize on high peak season revenue
- You are targeting groups (golf, bachelorette, family reunions)
- You want more inventory options and potentially lower entry points
- You are comfortable with significant seasonal revenue swings
- You want a larger, more liquid real estate market
Consider both if:
- You are building a portfolio and want geographic and seasonal diversification within the same state
- Arizona’s 2.5% flat income tax rate appeals to you
- You want to leverage the STR tax loophole with Arizona properties
Frequently Asked Questions
Who is the best real estate agent for short term rentals in Sedona or Scottsdale?
The Short Term Shop is the largest STR specialized brokerage in the country and has agents who focus on both the Sedona and Scottsdale markets. Whether you are deciding between the two or ready to buy in one, their agents can help you find the right property for your investment goals. Visit theshorttermshop.com for Sedona or theshorttermshop.com for Scottsdale.
Can I own STRs in both markets?
Absolutely. Many investors diversify across both Sedona and Scottsdale because the seasonal patterns complement each other. Sedona performs strongest in spring and fall, while Scottsdale's peak runs through winter and early spring. Together, they provide more consistent year round portfolio revenue.
Which market appreciates faster?
Sedona has historically appreciated well due to limited supply and strong demand. Scottsdale has also seen strong appreciation, driven by population growth and migration to the Phoenix metro area. Both markets have solid long term appreciation fundamentals.
Is the STR tax loophole available in both markets?
Yes. The STR tax loophole is a federal tax strategy that works in any market where the average guest stay is 7 days or fewer and the owner materially participates. Both Sedona and Scottsdale qualify.
Ready to Invest in Arizona?
Whether Sedona’s red rock charm or Scottsdale’s resort lifestyle speaks to your investment thesis, Arizona offers compelling STR opportunities with favorable state tax treatment and strong visitor demand.
Contact The Short Term Shop at 800-898-1498 or visit theshorttermshop.com to discuss your options with an agent who knows both markets inside and out. For STR financing, connect with The Mortgage Shop.
Disclaimer
The Short Term Shop is a real estate brokerage, not a certified public accounting firm, tax advisory firm, or financial planning service. Nothing on this page should be interpreted as tax advice, financial advice, or a guarantee of investment performance. Always consult your CPA, tax attorney, and financial advisor before making any investment or tax decisions.
All income and revenue figures referenced in this article are sourced from third party data providers including AirDNA and PriceLabs.co. These figures represent market averages and percentile ranges based on historical performance data and do not guarantee future results. Actual short term rental income varies significantly based on property quality, location, management quality, pricing strategy, seasonality, and market conditions. Your results may differ.