If you’re considering investing in Airbnb or short-term rental (STR) properties, you’re probably wondering: Where are the best returns and the least regulatory headaches?
Florida, Texas, and Arizona continue to dominate the conversation among savvy real estate investors. Why? Because they strike that perfect balance between tourism demand, investor-friendly laws, and reliable year-round occupancy.
In this guide, we spotlight three cities from each of these powerhouse states, using latest 2025 data to help you identify the most promising and regulation-friendly markets.
Best Short-Term Rental Markets in Florida
Florida’s STR landscape remains one of the most profitable in the country. With no state income tax, a booming travel sector, and localized STR-friendly zoning, Florida cities offer dependable cash flow and rising rental demand.
1. Hollywood, FL
- Annual Revenue: $38,867
- Gross Yield: 13.03%
- Median Home Value: $451,859
- Occupancy Rate: 55%
- Property Tax Rate: 1.00%
Hollywood ranks among the best short term rental markets in Florida thanks to its impressive yield and manageable licensing requirements. Its proximity to both Fort Lauderdale and Miami makes it an ideal mid-point for tourists.
2. Fort Walton Beach, FL
- Annual Revenue: $55,812
- Gross Yield: 9.99%
- Median Home Value: $327,383
- Home Value Change: -1.79%
- Active STRs: 203
- ADR: $206
While prices have cooled slightly, Fort Walton Beach remains a favorite for investors due to its strong seasonal bookings and coastal appeal. Its small size also limits saturation, keeping nightly rates healthy.
3. Cape Coral, FL
- Annual Revenue: $46,103
- Gross Yield: 10.60%
- Median Home Value: $375,641
- Home Value Change: -5.89%
- Active STRs: 3,558
- ADR: $267
Cape Coral boasts a laid-back lifestyle and regulatory environment, perfect for snowbirds and year-round vacationers. Even with a home value dip, yields are healthy for both new and experienced hosts.
Want to compare yields and property values in every U.S. STR market? Try Chalet’s nationwide analytics dashboard.
Airbnb Rental Markets Set to Outperform in 2025
Download our comprehensive guide to learn:
- 📊 Which STR markets are set to outperform in 2025 based on revenue growth, occupancy trends, and supply shifts.
- 🏡 Where home prices are still affordable while generating high rental income.
- ⚖ Which cities have the best (and worst) STR regulations—so you don't get caught off guard.
- 🔎 The demand trends driving guest bookings and what amenities maximize revenue in each market.
Best Short-Term Rental Markets in Texas
Texas is STR gold for one simple reason: freedom. With minimal state regulation and landlord-friendly cities, it’s easy to understand why investors flock here. Let’s look at three cities leading the charge in 2025.
1. San Antonio, TX
- Annual Revenue: $30,950
- Gross Yield: 11.36%
- Median Home Value: $253,210
- Home Value Change: -2.92%
- Active STRs: 5,733
- ADR: $167
San Antonio’s affordability and historical charm keep it popular year-round. Even with a small price dip, investors see consistent returns due to the city’s growing tourism and event calendar.
2. Houston, TX
- Annual Revenue: $31,026
- Gross Yield: 9.11%
- Median Home Value: $265,988
- Home Value Change: +0.46%
- Active STRs: 9,108
- ADR: $177
Houston is thriving with STR opportunities for medical tourism, business travelers, and long-term vacationers. With very few regulatory roadblocks and rising property values, it’s ideal for long-term STR investors.
3. Austin, TX
- Annual Revenue: $41,877
- Gross Yield: 7.21%
- Median Home Value: $517,215
- Home Value Change: -4.43%
- Active STRs: 10,280
- ADR: $270
Though pricier than other Texas cities, Austin’s event-driven demand keeps occupancy strong. STR regulation is present but structured, favoring compliant hosts with long-term plans.
Use this STR cash flow calculator to analyze listings in Texas and beyond.
Best Short-Term Rental Markets in Arizona (2025)
Arizona’s statewide protection of STR rights makes it one of the best short term rental markets AZ has ever seen. Here are the top cities giving investors high returns with fewer compliance headaches.
1. Lake Havasu City, AZ
- Annual Revenue: $48,309
- Gross Yield: 8.65%
- Median Home Value: $465,722
- Home Value Change: +1.02%
- Active STRs: 1,719
- ADR: $296
This desert gem caters to boating, biking, and off-season travelers. Lake Havasu’s year-round demand and friendly ordinances create a low-barrier entry point for STR investors.
2. Phoenix, AZ
- Annual Revenue: $37,722
- Gross Yield: 7.36%
- Median Home Value: $418,207
- Home Value Change: +1.25%
- Active STRs: 5,693
- ADR: $265
Phoenix STRs are thriving on a mix of tourism, sporting events, and seasonal snowbird traffic. Its modest appreciation and growing rental base ensure long-term viability.
3. Scottsdale, AZ
- Annual Revenue: $69,506
- Gross Yield: 6.94%
- Median Home Value: $828,456
- Home Value Change: +1.76%
- Active STRs: 5,541
- ADR: $516
Known for golf, wellness, and luxury travel, Scottsdale offers some of the highest nightly rates in Arizona. With favorable licensing laws and steady price appreciation, this is a top pick for premium STR hosts.
STR Tools to Help You Invest Smarter
Before making any decisions, equip yourself with data-backed tools:
- Compare STR markets nationwide
- Check rental regulation by market
- Estimate cash flow on listings
- Find STR-friendly properties for sale
Final Thoughts
From Florida’s coastal charm to Arizona’s investor protections and Texas’ balance of yield and price, 2025 proves these three states continue to lead the short-term rental game.If you’re still comparing your options, use Chalet’s tools to sort by Gross Yield, occupancy rate, or even price-to-income ratios. No guesswork. Just smart investing.
