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Although travel took a hiatus at the start of the decade, it’s back and stronger than ever. Many people simply don’t want to deal with hotels and prefer a nice vacation rental. If you own any additional residential real estate or plan to buy some, consider using it as an investment property.
Many people want cozy vacation rentals – which is why Airbnb generated $12.2 billion in revenue in 2025. The US vacation rental market is estimated at $71.7 billion in 2026, forecast to reach ~$101.6B by 2031, so now is the time to consider the best places to buy vacation rental property.
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How To Choose The Best Places to Buy Vacation Rental Property
When choosing an area to buy your investment property, you need to think about the potential of making rental income so you have a return on investment. If you already have a second home, consider converting it into a short-term rental, if it is in the right location.
If you comfortably own a second home in a high-priced big city, you are in luck. However, don’t give up on the potential of the vacation rental market in small towns. Matter of fact, it can be more lucrative to check out the home market in up-and-coming areas within proximity to increasingly expensive large cities such as Los Angeles, California, Miami, Florida, Boston, Massachusetts, San Francisco.
When booking vacation rentals, people are often looking for areas outside big cities that have activities such as boating, biking, watersports, mountain views and more. The proximity to these big cities is a selling point to renters, who want to be near but not in the hustle of a city.
Don’t fret over being in two places at once. You can always employ the services of property management professionals to keep an eye on things. While it can be an added expense, it will make your real estate investment life easier.
The list below consists of the best areas to invest in Airbnb vacation rental property. These areas are in the top list thanks to metrics pertaining to revenue potential, rental demand, and revenue growth.
Hawaii
Koloa, Hawaii is an historic town and small community on the island of Kauai. Highlights of the area include the 10-mile Koloa Heritage Trail and Old Town’s main strip for great shopping and art galleries. Average annual revenue potential here now ranges from roughly $98,000 to $117,000 depending on property type and size, with occupancy rates varying by source but generally landing in the 60-65% range.
A quick note for investors: Maui (home to Lahaina and Kihei, previously featured on lists like this one) has moved to phase out thousands of vacation rentals island-wide to convert housing for residents displaced by the 2023 Lahaina wildfire, which is still in active recovery. As of 2026, Maui is not a market we’d recommend for new vacation rental investment but Kauai offers a more stable regulatory environment for buyers interested in Hawaii.
South Carolina
The historic city of Charleston, South Carolina is a hub for good food, a great harbor, and an average monthly rental income now ranging from roughly $6,500 to $8,000 for homeowners, reflecting steady growth in the market. Charleston currently runs about 65% annual occupancy across more than 3,300 active listings, a dip from a few years ago as more properties have entered the market, so investors should factor increased competition into their expectations.”
Florida
Many home buyers flock to Florida for sunshine, beaches, and tax breaks. It is also a hot spot for Airbnb rentals. As of 2026, the median sale price of a single-family home in the Sunshine State is closer to $400,000-$412,500.
Among the top 30 cities rated by Airbnb with the best growth for short-term rentals, the state of Florida had the most. The Florida cities on the list included Port Saint Joe, West Palm Beach, Fernandina Beach, Kissimmee, Panama City Beach, Gulf Breeze, Davenport, Key West, Destin, Gatlinburg, Clearwater Beach, Santa Rosa Beach, Bradenton Beach, and Miami Beach.
Port Saint Joe continues to be a standout for growth. Vacation rentals in this city currently run about 54% occupancy and bring homeowners an average annual revenue of roughly $43,900. There are now over 2,600 active rentals in this small town near the Gulf of Mexico, reflecting how much the market has grown.
As mentioned earlier, Florida has many tax breaks to consider – this includes property taxes. The property taxes here are below the national average at 0.83%.
North Carolina
North Carolina makes the list with the cities of Sneads Ferry and Holly Ridge. Estimates for Sneads Ferry vary by data source, but homes here now generally bring in somewhere between $1,700 and $6,000 in monthly rental revenue depending on property size, at occupancy rates commonly cited between 35% and 60%. The median home price has climbed significantly, with recent estimates ranging from roughly $300,000 to $425,000
Georgia
Homebuyers in Georgia can often benefit by being near amazing outdoor activities or in proximity to Atlanta.
Blue Ridge, Georgia can attract vacation renters with its many outdoor activities and festivals, though it’s worth knowing home prices here have risen sharply, with the median home value now ranging from roughly $500,000 to $700,000 depending on the source and time of year.
Tybee Island continues to see solid demand for short-term rentals, with average monthly rental revenue now around $4,180 and an occupancy rate of about 55%
Tennessee
Homebuyers interested in gaining a second home in Tennessee should consider Nashville, Gatlinburg, and Sevierville.
In addition to being the country music capital, Nashville is a hot spot for short-term rentals in the state. Nashville’s short-term rental market has grown substantially, now home to nearly 14,000 active vacation rentals. With that growth has come more competition, and current market-wide average annual revenue sits closer to $40,500 per property, a reminder that Nashville today is a much more saturated market than it was a few years ago. Property tax rates in Davidson County change periodically, so it’s worth checking the current rate directly with the county assessor before budgeting.
Sevierville, Tennessee is close to the Great Smoky Mountains, a popular tourist destination. A rental property in Sevierville may bring home an average of somewhere between $44,000 and $77,000 annually depending on property type, though estimates vary by data provider.
Gatlinburg is also very close to the Great Smoky Mountains. Monthly revenue from property now averages closer to $5,300, with occupancy around 65%.
Feature Image Credit: carballo
