While there may be great appeal in starting a short-term rental business in popular tourist destinations like Destin, Florida or Vail, Colorado, a new report suggests that some small to medium-sized cities across the country may be a good place to start.
AirDNA, a company that collects short-term rental data from both public and proprietary sources, released a report in January ranking the best places to invest in short-term rentals, and many small and medium-sized cities made the list.
Overall in 2026, investing in short-term rentals will be more accessible than in recent years, the report said. This is primarily due to lower mortgage rates over the past few years, lowering the barrier to purchasing rental properties.
To rank the best places to invest, AirDNA examined thousands of homes currently for sale as of January 1, 2026 and calculated the potential annual rental income before expenses compared to each property’s listed price. We also looked at demand and booking frequency, potential revenue growth, purchase budgets, and the strength of currently available rentals based on listings on Airbnb, VRBO, and Booking.com.
The ranking also takes into account factors that drive demand for each region, such as beaches, ski areas, national parks, and wineries.
“If you look at the types of markets that consistently come up at the top of the list, it’s not the traditional beach and mountain markets. This is a trend that shows people want to travel and see rural areas across the country, and this started during the pandemic and continues to this day,” Jamie Lane, chief economist at AirDNA, told CNBC Make It.
“Each market has its own story, but by and large, growth is being driven by these small and medium-sized cities rather than traditional leisure markets,” Lane added.
Port Arthur, Texas will be a great place to invest in short-term rentals in 2026
AirDNA ranks Port Arthur, Texas as the best place to invest in short-term rentals in 2026, with an average annual revenue potential of $35,000 before expenses.
The number of short-term rentals in Port Arthur will increase by 23% from 2024 to 2025, indicating growing demand and performance, according to the report. The city’s occupancy rate is also 78%.
Compared to other cities on the list, Port Arthur may not have the highest annual revenue, but Lane says that’s not the only factor to consider.
“Just because an area has high return potential doesn’t necessarily mean it’s a good investment. You have to look at it in the context of the cost of housing to generate that return,” he says.
port arthur, texas
Halbergmann | iStock | Getty Images
Port Arthur is located 90 miles east of downtown Houston and is home to the largest oil refinery in the United States.
“Port Arthur is a market centered on oil and gas, but it’s also on the coast. We have a lot of guests coming to explore the wetlands and marshes nearby. It’s a market where people come and stay for longer than just a long weekend,” Lane says.
Lane added that Port Arthur remains a good place to invest in short-term rentals because housing prices are relatively affordable for investors. The median list price in Port Arthur was $151,265 as of Dec. 31, according to Zillow.
Known as the Cajun Capital, Port Arthur is a place where visitors can enjoy local seafood and learn about area legends such as the late Janis Joplin at the Gulf Coast Museum’s Music Hall of Fame.
10 best places to invest in short-term rentals
According to AirDNA, here are the top 10 places to invest in short-term rentals in 2026, along with the estimated average annual return potential of properties currently for sale in each market.
Port Arthur, Texas: $35,000 Abilene, Texas: $55,000 Downtown St. Paul, Minnesota: $45,000 Charleston, West Virginia: $32,000 Springfield, Illinois: $35,000 Lake Charles, Louisiana: $37,000 Montgomery, Alabama: $42,000 Akron, Ohio: $39,000 Lebanon, Pennsylvania: $42,000 Jackson, Michigan: $44,000
According to AirDNA, Abilene, Texas ranks #2 for short-term rental investments, with an average annual earning potential of $55,000. The number of short-term rental properties in Abilene will increase by 15% from 2024 to 2025, and the city’s occupancy rate will reach 77%.
Abilene, Texas
Aaron Yoder Eyestock | Getty Images
Lane said Abilene’s No. 2 ranking was surprising, but likely reflects the opening of the first data center in OpenAI’s Stargate program, which promotes infrastructure development to power artificial intelligence in the United States. The flagship site is located about 290 miles west of Dallas and is being leased by Oracle, CNBC reported.
Following the opening, “the hotel was completely booked,” Lane said.
Locating the data center in Abilene is part of the city’s efforts to position itself as a technology hub, according to Cities Today, a news platform focused on urban mobility and innovation.
Want to use AI to advance your work? Sign up for CNBC’s new online course, Beyond the Basics: How to Use AI to Supercharge Your Work. Learn advanced AI skills like building custom GPTs and using AI agents to increase your productivity today.
