Unlocking Profits: Top U.S. Cities for Short-Term Rental Investment in 2025

As the landscape of short-term rental investments evolves, AirDNA's latest analysis shines a spotlight on burgeoning opportunities beyond the traditional hotspots.

The report identifies the top U.S.

cities poised for investment in 2025, revealing a significant shift toward smaller and mid-sized areas.

With a notable 16% rise in rental listings in small cities and a
10.3% increase in mid-sized ones over the past year, effective investment strategies are not just confined to popular tourist destinations anymore.

Jamie Lane, Chief Economist at AirDNA, underscores the value of geographical diversity when considering short-term rental investments, encouraging investors to explore options across the nation.

This article delves into the key factors driving these trends and highlights the top cities for short-term rental investment, offering valuable insights for potential investors looking to unlock profits in
2025.

Key Takeaways

• Short-term rental listings are increasing significantly in smaller and mid-sized U.S. cities.
• Peoria, Illinois is highlighted as the top city for short-term rental investment with strong growth and profitability metrics.
• Geographic diversity presents numerous investment opportunities beyond traditional tourist hotspots.

Growth Trends in Small and Mid-Sized Cities

The landscape of short-term rentals is evolving, with exciting growth trends emerging in small and mid-sized cities across the United States.

According to a recent report from AirDNA, the demand for short-term rental properties is expanding beyond traditional tourist hotspots, suggesting that savvy investors should broaden their search.

The analysis, which encompasses over 540,000 properties as of January 1, 2025, reveals a striking 16% increase in listings within small cities and a
10.3% rise in mid-sized cities over the past year.

Jamie Lane, Chief Economist at AirDNA, points out that geographic diversity is crucial, indicating that viable investment opportunities can be found beyond the well-trodden paths of major tourist destinations.

Factors such as rental income potential relative to property prices, growing revenue per listing, and booking frequency are primarily driving these trends.

Notably, cities with fewer hotels often tend to see higher average daily rates and occupancy levels for short-term rentals, making them attractive markets for investment.

Illinois and Ohio emerge prominently in the report, with two cities each making it into the top ten, largely due to a robust demand for short-term rentals from healthcare sectors.

Leading the charge is Peoria, Illinois, recognized as the best city for investment with an impressive rental listing growth of 2

1.1% from 2023 to 2024, a gross yield of
15.3%, and an occupancy rate of
58.9%.

The steadfast performance of Peoria's market illustrates its ability to absorb new supply without negatively impacting existing operators, making it a smart investment choice in a market defined by below-average living costs.

Top Cities for Short-Term Rental Investment in 2025

Following Peoria, other cities have emerged as strong contenders for short-term rental investments.

For instance, Akron, Ohio, boasts a solid rental listing growth of 19%, with a gross yield of
14.5% and an occupancy rate nearing 56%.

This city benefits from its proximity to regional attractions and a burgeoning workforce, particularly from the healthcare and education sectors, which drive demand for serviced accommodations.

Similarly, Springfield, Illinois is gaining traction with a listing increase of
18.3%, accompanied by promising financial metrics that mirror Akron's success.

The strategic focus on mid-sized cities is critical for investors wanting to tap into markets with higher profitability potential, often lower competition, and unique local demand drivers.

By leveraging data from reputable sources like AirDNA, investors can better navigate these emerging landscapes, ensuring they capitalize on opportunities that extend far beyond the crowded arenas of typical tourist hubs.