Top 11 Cities to Invest in Airbnb Properties for 2025: Unlocking Hidden Gems Beyond Tourist Hotspots

Investing in Airbnb properties can be a lucrative opportunity, particularly if you know where to look.

As the short-term rental market evolves, many real estate investors are turning their sights away from bustling tourist hotspots and focusing on smaller cities that offer both potential growth and affordability.

According to a recent analysis by AirDNA, specific lesser-known cities are emerging as hidden gems for Airbnb investments in
2025.

This article explores these locations, highlighting key factors driving their potential, average revenue outlooks, and essential considerations for new investors.

Key Takeaways

• Investing in smaller cities can yield better returns than traditional tourist hotspots.
• AirDNA's ranking highlights cities like Fairbanks and Frankfort for their unique growth potential.
• A slowdown in new rental listings signals the importance of strategic investment in compliant markets.

Key Factors Driving Investment Potential

As the short-term rental market continues to evolve, understanding the key factors driving investment potential becomes essential for prospective investors.

According to a recent ranking by AirDNA, smaller cities are emerging as the best places for Airbnb investments in 2025, exhibiting unique characteristics that differentiate them from typical tourist hotspots.

These cities often showcase a viable mix of regional tourism and a steady demand for temporary housing, fueled by transient populations such as traveling healthcare professionals and university students.

Jamie Lane, an economist at AirDNA, highlights that the most successful investment markets tend to display this blend of demographic and geographic trends, fostering robust rental opportunities.

Among the notable cities is Frankfort, Kentucky—a top contender due to its proximity to the famed Kentucky Bourbon Trail—illustrating that even smaller locales can be significant tourism hubs.

Fairbanks, Alaska, has also gained prominence, thanks to its influx of summer travelers and the associated demand for temporary housing connected to local healthcare facilities and a university.

AirDNA's data indicates a slight slowdown in the growth rate of new rental listings across the U.S., reflecting a
6.8% increase in 2024, which contrasts sharply with previous years' numbers.

This trend may pose challenges for new hosts, particularly in areas that have enacted strict rental regulations aimed at maintaining housing affordability.

Notably, locations like Oahu, Hawaii, were excluded from the rankings due to stringent short-term rental laws—further emphasizing the importance of regulatory landscapes in potential investment returns.

The article provides a detailed overview of the top 11 cities, complete with insights into projected revenues, occupancy rates, and median sale prices, empowering investors to make informed decisions in the dynamic short-term rental market.

Top Cities for Airbnb Investment in 2025

In addition to Frankfort and Fairbanks, other cities are stepping into the spotlight for Airbnb investments in
2025.

For example, Columbus, Ohio, offers a blend of urban appeal and affordable real estate, making it attractive for those looking to capitalize on the growing transient population—especially with its numerous educational institutions and healthcare facilities.

Similarly, Little Rock, Arkansas, showcases a bustling arts scene while providing budget-friendly housing options, creating a fertile ground for profitable short-term rentals.

These emerging markets highlight an important trend: investors are beginning to look beyond traditional tourist destinations to find cities that promise consistent occupancy rates and solid annual returns.

Ultimately, this shift suggests a strategic approach that accounts for regional dynamics, local economies, and community needs, ensuring that investors select locations with the highest potential for growth.