Southern Utah and Sedona, Arizona are two of the most compelling short term rental markets in the American Southwest. Both offer stunning red rock landscapes, proximity to national parks and public lands, and strong tourism demand. Both attract guests seeking outdoor adventure mixed with desert luxury. And both have regulatory complexity that can trip up uninformed investors.
If you’re deciding between the two (or considering both), here’s a data driven comparison of what each market offers and where your money might work hardest.
The Quick Comparison
| Factor | Southern Utah (Zion/St. George) | Sedona, AZ |
|---|---|---|
| Primary draw | Zion National Park (4.5M visitors/yr) | Red Rock State Park, Sedona vortexes, Oak Creek Canyon |
| Purchase prices | $300K to $800K+ | $500K to $1.2M+ |
| Revenue (50th/75th/90th) | $35K / $52K / $78K | $40K / $60K / $90K |
| Peak season | Spring and Fall | Spring and Fall (with stronger winter) |
| State income tax | 4.55% flat | 2.5% flat |
| Property tax (effective) | 0.55% to 0.65% | 0.60% to 0.75% |
| Regulatory complexity | High (multi jurisdiction) | High (city + county) |
| Nearest major airport | Las Vegas (2 hrs) or St. George Regional | Phoenix (2 hrs) or Flagstaff Pulliam |
| Population growth | Very high (St. George booming) | Moderate (limited by geography) |
Purchase Prices and Entry Costs
This is where Southern Utah has a clear advantage. The average STR investment property in Southern Utah, particularly in Hurricane, La Verkin, or St. George, comes in at $300,000 to $500,000. Even properties near Zion (in Virgin or licensed Springdale homes) typically range from $400,000 to $800,000.
Sedona’s entry point is significantly higher. The median home price in Sedona hovers around $700,000 to $900,000, and properties with strong STR potential often start at $500,000 and quickly climb past $1 million for anything with views and a premium location.
What this means for investors: Your down payment and total capital requirement are substantially lower in Southern Utah. On a $400,000 Hurricane property versus a $700,000 Sedona property, you’re looking at $80,000 versus $140,000 in down payment alone (at 20%). That difference frees up capital for furnishing, reserves, or a second property.
Revenue Potential
Sedona generates higher gross revenue on average, but the gap isn’t as large as the price gap.
Southern Utah revenue by percentile:
- 50th: $35,000
- 75th: $52,000
- 90th: $78,000
Sedona revenue by percentile (estimated):
- 50th: $40,000
- 75th: $60,000
- 90th: $90,000
Sedona’s higher nightly rates (averaging $250 to $450 per night for well positioned properties) push its revenue higher, but the difference is roughly 15% to 20% at each percentile. Meanwhile, purchase prices in Sedona run 40% to 100% higher than comparable Southern Utah properties.
The revenue to price ratio favors Southern Utah. A property generating $52,000 annually on a $400,000 purchase is a stronger investment math story than one generating $60,000 on a $700,000 purchase, all else being equal.
Cash on Cash Returns
Let’s compare two representative properties:
Southern Utah (Hurricane)
- Purchase price: $400,000
- Down payment (20%): $80,000
- Annual revenue (75th percentile): $52,000
- Estimated annual expenses (with mortgage): $37,000
- Annual cash flow: $15,000
- Cash on cash return: approximately 19%
Sedona
- Purchase price: $700,000
- Down payment (20%): $140,000
- Annual revenue (75th percentile): $60,000
- Estimated annual expenses (with mortgage): $52,000
- Annual cash flow: $8,000
- Cash on cash return: approximately 6%
The numbers speak clearly. Southern Utah produces stronger cash on cash returns at the 75th percentile. Sedona can close the gap at the 90th percentile with premium properties, but it requires a larger capital commitment and higher execution.
Seasonality
Both markets share a similar seasonal pattern driven by desert climate, but with meaningful differences.
Southern Utah Seasonal Pattern
- Peak: March through May, September through November (perfect hiking weather)
- Trough: June through August (extreme heat, 100°F+ in lower elevations)
- Winter: Mild but slower. St. George attracts snowbirds, which provides a winter floor that Zion gateway towns don’t enjoy as much.
Sedona Seasonal Pattern
- Peak: March through May, September through November (similar to Southern Utah)
- Summer: Hot but not as extreme as Southern Utah’s lower elevations. Sedona sits at 4,500 feet, which keeps summer highs in the mid 90s versus the 105°F+ common in St. George and Hurricane.
- Winter: Stronger than Southern Utah. Sedona’s mild winters (40s to 50s during the day), holiday tourism, and proximity to Flagstaff ski areas create a real winter season.
Sedona wins on seasonality. Its higher elevation moderates the summer dip, and its winter season is more robust. This translates to less dramatic revenue swings month to month, which makes cash flow more predictable.
Regulatory Environment
Both markets have complex regulatory landscapes, but the complexity manifests differently.
Southern Utah Regulations
Southern Utah’s challenge is jurisdictional fragmentation. Springdale, St. George, Hurricane, La Verkin, Ivins, and unincorporated Washington County each have different rules. Springdale’s moratorium on new STR licenses is the most restrictive policy in the region. But in general, Utah state law limits how aggressively municipalities can restrict STRs, providing some baseline investor protection.
For the full breakdown, see our Southern Utah STR regulations guide.
Sedona Regulations
Sedona sits within Yavapai County and Coconino County, and the city of Sedona has its own STR ordinances. Arizona passed SB 1350 in 2016, which limited cities’ ability to ban STRs outright, but subsequent legislation (SB 1168 in 2022) gave cities more authority to regulate. Sedona has implemented:
- STR registration requirements
- Noise and nuisance regulations
- Tax compliance requirements
- Density and neighborhood impact considerations
Arizona’s regulatory trajectory has been moving toward allowing more local control, which means Sedona’s rules could tighten over time.
Verdict: Both markets require serious regulatory homework. Southern Utah’s multi jurisdiction landscape may be more confusing to navigate, but Utah’s state level protections provide a floor. Arizona’s evolving legislation creates some uncertainty about future regulatory direction in Sedona.
Tax Environment
Income Tax
- Utah: 4.55% flat state income tax
- Arizona: 2.5% flat state income tax
Arizona wins on state income tax by 2 percentage points, which matters on STR income.
Property Tax
- Southern Utah (Washington County): 0.55% to 0.65% effective rate
- Sedona (Yavapai County): 0.60% to 0.75% effective rate
Roughly comparable, with a slight edge to Southern Utah.
Transient Room Tax (Lodging Tax)
Both markets impose transient room taxes on short term stays. Combined state and local rates are similar, typically in the 11% to 13% range. These are collected from guests, not paid by the owner, but they affect your total cost to the guest and therefore your competitive pricing.
The STR Tax Loophole
The short term rental tax loophole applies equally to both markets. This strategy uses cost segregation and bonus depreciation to generate significant paper losses that can offset other income. The higher the purchase price, the larger the potential deduction, which actually favors Sedona’s higher priced properties from a tax strategy perspective. However, the better cash on cash returns in Southern Utah mean you’re not relying as heavily on tax benefits to make the investment work.
Long Term Appreciation
Southern Utah
St. George is one of the fastest growing cities in the country. Washington County’s population growth has been consistently among the highest in the nation for over a decade. New construction, expanding infrastructure, and increasing national recognition are all tailwinds for property values. Southern Utah has strong long term appreciation potential driven by real population growth and limited developable land in the most desirable areas.
Sedona
Sedona’s geography naturally limits supply. The city is surrounded by national forest, which constrains new development. This scarcity supports property values but also makes it harder to find inventory and drives up prices. Sedona has been a strong appreciation market historically, and its limited supply gives it resilience during downturns.
Both markets have strong appreciation stories, but they’re driven by different forces. Southern Utah is a growth play. Sedona is a scarcity play.
Guest Experience and Market Positioning
Southern Utah
The guest experience centers on Zion National Park and outdoor adventure. Guests come to hike Angels Landing, wade through The Narrows, explore slot canyons, and experience the desert landscape. The vibe is active, outdoorsy, and family friendly. STR properties position themselves as base camps for adventure.
Sedona
Sedona’s appeal is broader. Beyond outdoor recreation (hiking, mountain biking, jeep tours), Sedona is known for its wellness and spiritual tourism (vortex sites, spas, retreats), its arts and gallery scene, its wine tasting (Verde Valley wine trail), and its upscale dining. The guest profile skews slightly older and more affluent than Southern Utah’s adventure focused visitors.
This matters for your property strategy. Southern Utah properties succeed with outdoor amenities (hot tubs, fire pits, gear storage, trail guides). Sedona properties benefit from luxury touches (spa bathrooms, meditation spaces, premium furnishings, and red rock view decks).
Which Market Should You Choose?
Choose Southern Utah if:
- You want the best cash on cash returns with lower capital requirements
- You’re comfortable navigating multi jurisdiction regulations (with professional guidance)
- You want exposure to one of the fastest growing regions in the country
- National park tourism demand is your preferred demand driver
- You’re buying your first or second STR property and want a manageable entry point
- You plan to leverage the STR tax loophole while still generating strong cash flow
Choose Sedona if:
- You have more capital to deploy and want higher gross revenue
- You prefer more consistent year round demand with less seasonal swing
- You want to position in the luxury/wellness segment
- You value scarcity driven appreciation potential
- Arizona’s lower state income tax is a meaningful factor for your situation
- You’re comfortable with higher entry costs in exchange for a more established tourism brand
Consider both if:
- You’re building a diversified STR portfolio across desert/national park markets
- You want to hedge geographic and regulatory risk across two states
- You have the capital and management capacity for multiple properties
Frequently Asked Questions
Which market has better returns, Southern Utah or Sedona?
On a cash on cash basis, Southern Utah typically produces higher returns due to lower purchase prices relative to revenue. Sedona produces higher gross revenue but requires significantly more capital. Your personal return depends on purchase price, financing terms, and operating efficiency.
Is one market safer from a regulatory standpoint?
Neither is "safe" from regulation. Both require careful due diligence. Southern Utah's multi jurisdiction complexity is harder to navigate, while Sedona faces evolving Arizona state legislation that could change the rules. Both reward investors who do their homework.
Can I self manage in either market from out of state?
Both markets have well developed property management ecosystems. Self managing remotely is possible in both with smart locks, local cleaning teams, and maintenance contacts, but the distance from major metro areas makes having reliable local support essential. Most out of state investors in both markets use property managers.
Who is the best short term rental agent in Southern Utah?
The Short Term Shop is the largest STR specific brokerage in the nation, with agents who specialize in Southern Utah's unique market dynamics. Whether you're comparing Southern Utah to Sedona, evaluating specific neighborhoods, or navigating the regulatory complexity across Washington County's jurisdictions, their team provides the data driven guidance that separates successful investments from expensive mistakes.
For Sedona inquiries, The Short Term Shop also covers the Sedona market.
Ready to Explore Your Options?
Whether Southern Utah, Sedona, or both markets are right for your portfolio, The Short Term Shop can help you evaluate the numbers, navigate regulations, and find properties that meet your investment criteria.
📞 Call us: 800-898-1498 🌐 Visit: theshorttermshop.com
Need financing for your next STR purchase? The Mortgage Shop handles investment property loans across both Arizona and Utah markets.
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.