Unlocking Short-Term Rental Goldmines: Top U.S. Cities for 2025 Investments Revealed

In the evolving landscape of short-term rental investments, 2025 promises to be a transformative year for aspiring property investors.

As highlighted in AirDNA's recent report, smaller cities and rural areas are emerging as unexpected goldmines, showcasing impressive growth rates in rental listings, much to the delight of investors looking for ripe opportunities beyond the typical tourist hotspots.

With an analysis of over 540,000 rental properties revealing key trends and insights, we delve into the top U.S.

cities showcasing remarkable potential for investment.

Joining us on this exploration is Peoria, Illinois – a standout contender that exemplifies the lucrative possibilities present in today’s market.

Key Takeaways

• Smaller cities and rural areas are emerging as profitable markets for short-term rental investments.
• Peoria, Illinois, stands out with a significant growth rate and promising rental yields for investors.
• Geographical diversity is crucial for identifying high-potential short-term rental opportunities beyond traditional tourist hotspots.

Emerging Trends in Short-Term Rental Investments

The short-term rental market is undergoing significant transformation, evidenced by a recent report from AirDNA which sheds light on emerging trends in investment opportunities across the United States.

The report, analyzing over 540,000 properties as of January 1, 2025, indicates a noticeable uptick in rental listings particularly in smaller cities and rural areas, with growth rates of 16% in small cities and
10.3% in mid-sized urban locales.

Jamie Lane, Chief Economist at AirDNA, underscores the strategic advantage of diversifying investments geographically rather than restricting them to traditional tourist hotspots.

Factors that influenced the rankings include the potential rental income against listing prices, year-over-year revenue growth per listing, and high booking rates.

Interestingly, cities in Illinois and Ohio have emerged prominently in the top 10 list due to stable home values and burgeoning demand from local industries, particularly the healthcare sector, which attracts medical professionals and patients seeking temporary accommodations.

Peoria, Illinois, stands out as a leading investment hub, showcasing a substantial 2

1.1% increase in listings from 2023 to 2024, with an attractive average gross yield of
15.3% and decent occupancy rates of
58.9%.

The market appears healthy due to a balanced demand-supply dynamic and relatively low living costs, positioning Peoria as an exceptional choice for those looking to enter the short-term rental arena.

Top Cities for 2025: A Closer Look at Peoria and Beyond

In addition to Peoria, several other cities are gaining traction among investors looking to capitalize on the short-term rental market.

Cities like Columbus, Ohio, and Springfield, Illinois, demonstrate significant potential with their growth in listings and favorable economic conditions.

Columbus reports a
19.8% increase in short-term rentals driven by a thriving local economy and a steady influx of visitors drawn to its diverse attractions and event spaces.

Likewise, Springfield’s emphasis on local history and culture, coupled with its stable housing market, makes it an excellent market for short-term rental investment with strong returns.

These cities reflect the broader trend highlighted in AirDNA's report, which indicates that medium-sized urban areas are not just alternatives but genuine contenders in the short-term rental landscape.

Investors are increasingly recognizing that by looking beyond major metropolitan areas, they can uncover lucrative opportunities that offer both returns and resilience in an ever-evolving market.