Unlocking Profit Potential: 11 Underrated Cities for Airbnb Investment in 2025

In the evolving landscape of real estate investment, Airbnb has emerged as a lucrative opportunity for savvy investors.

However, with numerous conventional tourist destinations becoming saturated with properties, the focus is shifting towards lesser-known cities that offer significant growth potential for short-term rentals.

In this article, we will explore the compelling reasons why investing in Airbnb in underrated cities can be a game-changer in
2025.

By diving into the insights provided by Jamie Lane from AirDNA, we'll uncover factors that contribute to a city's attractiveness for Airbnb investments, and highlight 11 underrated cities poised to deliver remarkable profits.

From Frankfort, Kentucky to Fairbanks, Alaska, these destinations combine unique attractions, demographic demands, and affordable housing markets to ensure a strong return on investment.

Let’s delve into what makes these cities the hidden gems of Airbnb investment.

Key Takeaways

• Investing in Airbnb properties in lesser-known cities can yield profitable opportunities in
  2025.
• AirDNA's analysis highlights the importance of combining regional tourism with temporary housing needs for successful Airbnb markets.
• Cities with strict short-term rental regulations are not ideal for Airbnb investments, making lesser-known locations more attractive.

The Factors Driving Airbnb Success in Underrated Cities

As the Airbnb market continues to evolve, 2025 presents a unique opportunity for investors looking to capitalize on growing trends in lesser-known cities rather than traditional tourist hotspots.

According to Jamie Lane from AirDNA, the key to successful investment lies in identifying areas that effectively blend regional tourism with specific temporary housing needs, such as those created by traveling nurses, students, or business professionals.

For instance, Frankfort, Kentucky, situated along the picturesque Kentucky Bourbon Trail, offers a unique edge with its blend of local attractions and growing demand for short-term rentals.

In contrast, Fairbanks, Alaska, is rising on the radar thanks to a burgeoning summer travel market and increasing needs stemming from the local healthcare sector.

Interestingly, while many cities across the U.S.

witnessed a slowdown in new short-term rental listings—showing only a
6.8% increase in 2024 compared to the boom years preceding the pandemic—areas that impose strict regulations, such as Oahu, Hawaii, have been largely excluded from top investment discussions.

This article not only highlights notable cities like Frankfort and Fairbanks but also lists 11 other promising locales for Airbnb investments, backed by substantial data on average revenue per listing, occupancy rates, and median home prices, thus equipping potential investors with the crucial insights they need to make informed decisions.

Top 11 Cities for Airbnb Investment in 2025

Other cities that are gaining traction for Airbnb investments include places like Spokane, Washington, known for its stunning landscapes and outdoor recreation, which appeal to both tourists and residents seeking temporary housing solutions.

Additionally, Grand Rapids, Michigan, with its vibrant arts scene and growing population, showcases strong demand for short-term rentals, particularly among visitors attending events or family gatherings.

Investors are also turning their sights to Mobile, Alabama, a city celebrated for its historic architecture and waterfront, which attracts both leisure travelers and seasonal workers due to its bustling maritime industry.

Each of these cities presents a unique opportunity, combining local attractions with vital temporary housing needs, further illuminating the trend that summer travel and business-related stays are on the rise, making them ideal candidates for savvy investors looking to diversify their portfolios.