advertisement

Want to buy a short-term rental? Peoria, Rockford on list of best investments

If you’re pondering how to make your savings and bonus work for you this year, one area you might consider is the short-term property rental market.

Data and analytics company AirDNA LLC tracks the performance of 10 million Airbnb and Vrbo vacation rentals, and this week it released its 10th annual list of the best places to invest in short-term rentals in the U.S.

AirDNA uses three main metrics to define where investment opportunities exist: demand growth (reflecting how often rentals are booked); investment potential (gross yield, calculated by dividing annual revenue by listed price); and revenue growth (the profitability trajectory of properties year-over-year).

This year’s top 10 U.S. destinations may surprise you — they’re mostly small to midsize cities across a mixture of states. To Jamie Lane, chief economist at AirDNA, this is part of a wider trend. “Over the last three years there has been this notion of random U.S. towns doing well, and the driver has been U.S. home values,” he says. Home prices have broadly spiked since the peak of the pandemic, and according to Lane the concentration of that increase was in major cities and coastal or mountain vacation markets, meaning their yield went down. As a result, so too did the homes’ value as investments compared with those in small and midsize cities, he says.

Coming in at No. 1 on AirDNA’s list is Peoria. According to Lane, the city grabbed the top spot in large part because it’s a hub for huge health systems. “Hospitals are a great demand center,” Lane says. “Whether it’s for patients coming for treatments, local staffing or for students on residency looking for somewhere to stay for two to three months — hospitals lead to really strong growth.”

Also making the top 10 is Columbus, Georgia. Lane says that aside from its health-care systems, the military base there — Fort Moore — is a big reason for the city’s investment appeal. Regular military trainings mean large numbers of service members come in and out of the city and end up looking for short-term rentals, often with their families. Additionally, tourism in Columbus has started to take off, Lane says, with white-water rafting becoming especially popular since dams were removed from rivers in the area in recent years.

Frankfort, Kentucky, is also on the list, thanks to its attractiveness to tourists. Situated at the heart of the Kentucky Bourbon Trail, the city has become a popular area for people to stay while visiting the local distillery towns, says Lane.

Here’s where to find the best short-term rental investment opportunities in the US in 2025, according to AirDNA:

• Peoria

• Fairbanks, Alaska

• Akron, Ohio

• Columbus, Georgia

• Crescent City, California

• Shreveport, Louisiana

• Page, Arizona

• Rockford

• Dayton, Ohio

• Frankfort, Kentucky

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.