4 STR Markets Every Aspiring Airbnb Investor Should Know

Hidden gem markets can mean everything for your next Airbnb.

When it comes to investing in Airbnb properties, one of the most critical decisions you'll make is choosing the right market. The location you pick can make or break your success. Over the past seven years, I’ve invested in Airbnbs across a variety of markets—from LA and Joshua Tree to Tennessee and Wisconsin. After buying dozens of properties, I've found that certain markets consistently outperform others. Today, I’m sharing four types of Airbnb markets that are primed for success, along with bonus categories to help you refine your search even further.

1. National Parks: The Evergreen Choice

National parks are always going to be a solid investment. Why? Because they're what I like to call "Mother Nature's Disneyland." Every year, over 300 million people visit national parks across the U.S., and these are destinations people flock to regardless of the economy.

Think about it: a family might skip the luxury vacation to Disney World in favor of a more affordable road trip to places like Yosemite, Joshua Tree, or the Grand Canyon. The demand for accommodation in these areas is constant, and short-term rentals are often the most convenient option for travelers.

For example, the Smoky Mountains is the most visited national park in the U.S., with over 14 million visitors annually. Yet, there are only around 5,000 short-term rentals in the area. That means the demand far exceeds supply, making it a highly lucrative market.

What makes national parks recession-resistant?

• Cheaper travel: Families can drive to national parks and pack their own food, cutting down on costs.
• Year-round demand: While other vacation destinations may be seasonal, national parks tend to have steady demand throughout the year.

📌 Pro Tip: Look for national parks that aren’t overly saturated, but still get decent traffic. Unique design and great amenities can set you apart in these markets.

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2. State Parks: Hidden Treasures with less competition

While national parks get most of the attention, state parks can be just as profitable—if not more so. State parks actually attract 800 million to 1 billion visitors annually, three times the amount of traffic that national parks get. The best part? The competition is usually far less fierce.

What I've noticed in these areas is that a lot of the Airbnb listings are outdated. Think old, mismatched furniture and poor photography. If you can invest in good design, professional photos, and a compelling listing, you can easily rise to the top of the market.

Why invest in state parks?

• Lower competition: The bar for quality in state park markets is often low.
• Consistent traffic: Like national parks, state parks have steady traffic from local and regional visitors.

📌 Pro Tip: Consider investing in under-the-radar state parks like Hocking Hills or Red Rock State Park, where there’s ample room for growth and little competition from high-quality listings.

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3. Eclectic Towns: Weekend Wonders

Eclectic towns, weekend getaways, and pitstop towns are gold mines for short-term rentals—if you play it right. These towns may not have high occupancy during the week, but they absolutely crush it on weekends.

Take Fredericksburg, Texas. It's known as the wine country of Texas, and while it's mostly a weekend destination, the high nightly rates more than make up for the lack of weekday bookings. Eureka Springs, Arkansas, and Waco, Texas, are other great examples of these quirky, highly profitable markets.

How to win in eclectic towns:

• Embrace the weekend warrior: Most bookings will happen on Fridays and Saturdays, so make sure your weekend pricing reflects that demand.
• Understand the market’s quirks: You won’t get 80% occupancy, but with the right pricing strategy, you won’t need it.

💡 Case Study: My Airbnb in Austin, The Pink Pickle, averages $1,299 per night on weekends with an occupancy rate of only 41%. Even with low weekday bookings, the property pulls in around $12,000 a month, covering the mortgage and making a hefty profit.

📌 Pro Tip: Focus on upping your weekend pricing and adding quirky amenities to stand out. Eclectic towns thrive on character!

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4. Vacation Destinations: High Reward, Seasonal Income

If you’re looking for big-ticket profits, vacation destinations like beach towns, ski resorts, and lakefront properties are where it’s at. These markets see massive spikes in demand during peak seasons, and while the rest of the year may be slower, the peak months can make up for it.

Take Destin, Florida for example. A single week-long stay in July can go for anywhere between $5,000 and $10,000. The same goes for ski towns like Vail or Aspen, where winter bookings can fill up fast, bringing in massive profits.

Why vacation destinations are worth the risk:

• High-ticket bookings: These areas command higher nightly rates, especially during peak season.
• Appreciation: Vacation homes often appreciate in value over time, giving you a solid return on investment beyond just cash flow.

📌 Pro Tip: Be prepared for seasonality. You’ll need to budget for the slower months, but the high rewards during peak season can more than make up for it.

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Bonus Considerations for Choosing Your Next Market

Now that we’ve covered the four main categories, here are some bonus tips to help you refine your search even further:

1. Short-Term Rental Regulations
   Always check the local laws to ensure short-term rentals are allowed in your chosen market. A quick Google search (e.g., “Airbnb regulations in [city]”) can save you a lot of time and frustration.
2. Market Dependency on Short-Term Rentals
   Some markets, like Gatlinburg, are heavily dependent on tourism and short-term rentals. In these places, it's less likely that local governments will impose harsh restrictions on Airbnb properties.
3. Affordability
   Be realistic about your budget. While you might love the idea of owning a property in LA or San Diego, these markets are significantly more expensive. Start with something you can afford.

By keeping these market types and tips in mind, you’ll be better equipped to find an Airbnb investment that aligns with your financial goals and lifestyle. Whether you're targeting steady income from national parks or high-ticket profits in vacation destinations, there’s an opportunity out there for everyone.

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