The short-term rental market is turning a corner. After years of uneven returns and investor uncertainty, conditions in 2026 are shaping up to reward buyers who move early.
While borrowing costs remain near 6%, home values in some markets have softened and rental revenues have grown. The short-term rental premium, or the amount a short-term rental earns above a typical mortgage payment, reached $989 in early 2026, the highest since late 2022.
But the best opportunities are not where most investors are looking. The cities generating the strongest returns are smaller, more affordable, and largely off the tourist trail. Think state capitals, oil hubs, and military towns. They are mid-size and small metros anchored by industry, health care systems, government institutions, and universities. These drivers produce steady, year-round demand from workers, patients, and officials — in other words, guests who often stay longer and book more predictably than vacationers.
What unites the leaders of this year’s ranking is that they “fly under the radar of short-term rental investors,” according to data and analytics firm AirDNA, which analyzed Airbnb $ABNB and Vrbo listings to produce the findings. Limited competition and reasonable entry prices make them attractive for investors who get in early.
Realtor.com published the full breakdown of AirDNA’s top 10 markets. The list below is ranked by yield, the ratio of annual returns to home value.