If you’re looking to add a new stream of passive income for 2025 and beyond, a short-term rental can be a good investment. According to a new report from AirDNA, a resource for short-term rental data, “both occupancy rates and average daily rates are expected to rise in 2025, building on the stabilized performance seen in 2024. These increases should help offset the higher cost of property acquisition, making strategic investments more viable.”
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The viability of a short-term rental investment depends largely on where you choose to buy. To determine the best place to invest in short-term rentals this year, AirDNA analyzed over 540,000 properties currently for sale and calculated the potential rental income for each property relative to its listing price.
The analysis also looked at average revenue potential — the estimated yearly income that properties currently for sale in that market could earn as short-term rentals; listing growth — how much the number of Airbnb listings has grown in the past year (higher percentages indicate growing investor interest and traveler demand); gross yield — annual revenue potential divided by property sale price, which indicates how quickly an investment can pay off; and growth in revenue per available rental — combines average nightly rates and occupancy, with positive growth indicating improving market performance and high earning potential.
Based on this analysis, here’s where short-term rental investors should buy property in 2025.
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Average annual revenue potential: $31,131
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Listing growth: 21.1%
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Gross yield: 15.3%
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Growth in revenue per available rental: 7.7%
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Average annual revenue potential: $49,459
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Listing growth: 17.4%
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Gross yield: 15.1%
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Growth in revenue per available rental: 6.2%
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Average annual revenue potential: $31,2071
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Listing growth: 33.2%
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Gross yield: 12.6%
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Growth in revenue per available rental: 11.5%
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Average annual revenue potential: $39,986
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Listing growth: 20.5%
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Gross yield: 13.4%
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Growth in revenue per available rental: 5.5%
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Average annual revenue potential: $51,318
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Listing growth: 11.1%
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Gross yield: 11.9%
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Growth in revenue per available rental: 8.8%
