Updated on: September 3, 2025
The short-term rental scene in the U.S. has exploded in the last few years. More and more travelers are skipping hotels and going for private places that feel flexible and personal. Platforms like Airbnb have made booking so simple that it’s changed the way people think about travel altogether.
For the industry, it means short-stays aren’t just a side gig anymore – they’re a big part of hospitality. And with demand still climbing, the market looks set to keep shifting and growing in ways that will keep both guests and property managers on their toes.
Brief Overview of Short-Term Rental Market in the US
Short-term rentals in the U.S. aren’t slowing down anytime soon. In 2024, the market’s pulling in about $20 billion – and that’s just the start. Analysts expect steady growth over the next few years, around 4% a year, which could push things close to $25 billion by 2029.
And it’s not only about the money. The number of people actually using vacation rentals is climbing too. By the end of the decade, almost 72 million Americans are expected to book stays this way. That’s a lot of travelers choosing rentals over hotels, and it shows how much the industry has shifted.
Current State of the Short-Term Rental Market
As of 2024, about 18.7% of U.S. travelers are using short-term rentals. By 2029, that number should climb to around 20.5%. It doesn’t sound huge, but that’s millions of new users in just a few years.
The average revenue per user is also on the rise, sitting at about $316 right now. Add to that the fact that most bookings are happening online – projections say 85% of total revenue will come through digital channels by 2029 – and it’s clear where the market is heading.
The U.S. is expected to stay out in front globally when it comes to vacation rental revenue. Demand for flexible, private stays just keeps growing, and it’s pushing the market forward year after year.
Key Factors Influencing the Short-Term Rental Market
Travel habits in the U.S. have changed a lot. More people want private, personal spaces instead of hotels – a cabin, a beach house, or even just a small city flat that feels like home. Extra room, a kitchen, or just something different from the usual hotel box… that’s what’s pulling travelers toward short-term rentals.
And honestly, booking’s easier than ever. A few taps on an app and you’re done. That convenience has completely changed the game. Add in the growing interest in eco-friendly places – solar panels, recycling bins, energy-efficient design – and you can see why some rentals get booked up faster than others.
It’s not just one factor, though. The U.S. has a mix of everything: coastlines, mountains, busy cities, and quiet towns. That variety alone keeps the market strong. Plus, more Americans are sticking to domestic trips lately, exploring spots they might’ve ignored before.
Then there’s money and work. When people feel confident about their income, they’re more likely to splurge on unique stays. And with remote work sticking around, longer bookings are becoming normal – people mixing work with travel, staying a few weeks instead of just a weekend. It all adds up to steady growth for short-term rentals.
Key Investment Factors for Short-Term Rentals
Buying into short-term rentals isn’t as simple as grabbing the first property you find and listing it online. Profit depends on a mix of things – where the place is, what kind of property it is, and what rules the local council has in place. Ignore any of those and your numbers can go south fast.
It also pays to dig into demand and rates in the area. Are travelers actually booking stays there year-round, or is it seasonal? Are nightly prices strong enough to cover your costs and still leave a margin? These are the kinds of questions that separate a smart investment from a money drain.
In short, picking the right spot and running the numbers properly matters more than anything else. Get that wrong, and nothing else will save the deal.
Location Considerations
With short-term rentals, where the place is matters more than almost anything else. You can have a beautiful property, but if it’s stuck in the middle of nowhere with nothing to do, it’s going to sit empty.
The flipside: even a simple space in the right neighborhood can stay full year-round. Guests care about what’s nearby – restaurants, trails, a train station, maybe just the vibe of the area. If it’s convenient or interesting, people will book.
And don’t forget about seasons. Some spots are slammed in summer and dead in winter. Others stay steady all year. Knowing those patterns ahead of time saves you from nasty surprises when the bookings suddenly dry up.
Property Type and Size
The kind of property you pick has a huge impact on how well it rents. A tiny studio might be perfect for a solo traveler, but a family won’t even look at it. And the opposite’s true too – a big house isn’t much use if most guests in the area just need a quick place to crash.
Little details matter more than people realize. Pet-friendly listings? They get snapped up fast. Same with extras like a hot tub or a cozy outdoor space. Those things aren’t just “nice to have” – they can make the difference between an empty calendar and being booked solid.
And here’s the key: don’t guess. Check what’s actually moving in your area. If most bookings are for one-bed apartments, don’t assume a five-bedroom villa will perform the same. Local demand should guide the buy – otherwise, you’re rolling dice with your money.
Local Regulations and Policies
Local laws are one of those things a lot of new hosts ignore… until it bites them. Some cities want you to get a permit. Others cap the number of nights you can rent out. A few pile on extra taxes. And it changes from place to place – there’s no one rulebook.
Skip the paperwork and, trust me, the fines aren’t pretty. In some areas, they’ll even shut you down completely. The best move? Keep an eye on council announcements, and talk to other hosts nearby. They usually hear about changes before anyone else.
Bottom line: don’t guess. What’s allowed in one town might get you in trouble just a few miles away.
Market Demand and Rental Rates
Before you buy, you’ve got to know if people are actually booking in that area. High demand and solid nightly rates are what make a short-term rental profitable -without them, you’re just covering bills.
Check the basics: how full are other rentals nearby? What’s the going nightly price? And how many places are you competing with? Those numbers tell you more than any sales pitch from a realtor.
There are plenty of tools to dig deeper – market reports, rental data sites, even just comparing similar listings. Use them. The more you know upfront, the less chance you’ll sink money into a property that never performs.
Top Cities for Short-Term Rental Investments in the United States
Short-term rentals in the U.S. are all over the place – what works in Miami might totally flop in Denver. Each city’s got its own quirks, its own rules, and its own demand patterns.
That’s why you can’t just follow the hype. Look at the basics: are places actually being booked? What’s the average nightly rate? How full are calendars getting? Those numbers tell the story way better than glossy headlines.
Some cities clearly do better than others, and a few are pulling way ahead right now. Let’s check out which ones.
Nashville, Tennessee
Nashville’s been buzzing. Tourists pour in for the music, the food, the bars – and they need places to stay. That’s kept demand high, and the numbers prove it: the city’s market score is sitting at 86. Pretty strong.
But it’s not perfect. Bookings dip here and there depending on the season, and the city’s been known to tweak its rental rules. If you’re eyeing Nashville, you’ll want to keep that in mind.
Still, the pull of the city is huge. For a lot of investors, that’s enough.
Austin, Texas
Austin’s been on the radar for short-term rentals for a while now. The city’s culture, food, and booming tech scene keep drawing in travelers, and that demand has kept the rental market strong. Its current market score sits at 74 – solid, though not without a few caveats.
The numbers look good, but investors should keep an eye on local rules and seasonal shifts. Austin has plenty going for it, but like most busy markets, things can change quickly.
Miami, Florida
Miami’s short-term rental scene is about as strong as it gets. Tourists pour in for the beaches, nightlife, and endless events, which keep demand high year-round. The city’s market score is currently 78 – not bad at all.
That said, it’s not just sunshine and easy money. Regulations can be tricky, and like most tourist hubs, seasonality plays a role. Still, for investors chasing steady demand and high occupancy, Miami stays near the top of the list.
San Diego, California
San Diego’s always been a magnet for visitors – perfect weather, beaches everywhere, and a laid-back vibe that keeps tourists coming back. For short-term rentals, the city scores a 62, which puts it in the “good, not great” range.
There’s still plenty of opportunity here, but it’s not without challenges. Regulations can be strict, and demand shifts with the seasons. For investors, San Diego can work well, but it takes careful planning and a close watch on the local rules.
Asheville, North Carolina
Asheville’s been getting a lot of attention lately in the short-term rental world. Tourists come for the mountain views, the breweries, and the city’s artsy vibe – and that steady flow of visitors keeps demand high. Its current market score sits at 78, which puts it solidly in the “good” range.
Still, it’s not a free ride. Regulations can shift, and rental demand changes with the seasons. But for investors who want a mix of natural beauty and a cultural draw, Asheville is one of the stronger U.S. markets to look at right now.
How does the growth of remote work impact short-term rentals demand in different areas?
Remote work has flipped the travel game on its head. With more people free to work from anywhere, short-term rentals are seeing big changes in both where guests go and how long they stay. Suddenly, it’s not just about quick vacations – it’s about living and working somewhere new for weeks or even months.
That shift has opened the door for places that didn’t used to be on the map. Small towns, mountain spots, or coastal areas that were once “off-season only” are now pulling steady bookings all year. Travelers want a mix of good internet, a nice setting, and space to balance work and downtime.
For investors, it means paying attention to these new patterns instead of only chasing the big urban markets. Remote workers are spreading demand wider, and the places that figure out how to attract them are the ones cashing in.
Remote work in tourist destinations
Beach towns, mountain getaways, even spots near national parks – they’re not just weekend destinations anymore. Remote workers are booking longer stays, often a few weeks or months at a time. That’s stretched out the “busy season” and kept occupancy steady well past the usual holiday rush.
For investors, that’s good news. A place that used to sit empty most of the year can now bring in regular income. Cities like Asheville and San Diego are great examples – they’ve got the scenery people want plus the basics like good internet and co-working spots nearby.
And here’s the kicker: rentals with remote-friendly setups – think fast Wi-Fi, a real desk, maybe even an ergonomic chair – are pulling in higher rates and repeat bookings. For a lot of travelers mixing work and vacation, those features aren’t extras anymore… they’re must-haves.
Demand for rentals in urban areas
Remote work hasn’t killed the appeal of cities – not even close. Plenty of urban spots are still buzzing with short-term rentals, especially places with a strong tech scene, great culture, and solid infrastructure. Austin and Miami are perfect examples: people head there for the lifestyle, the events, the networking… or just because they’re fun places to live for a while.
What’s changed is the length of stays. Instead of just a few nights, more guests are booking one to three months at a time. That mid-term demand is climbing, and investors who offer flexible booking options, good monthly rates, and fully set-up apartments are the ones cashing in.
City renters also expect convenience. Coworking spaces nearby, walkable neighborhoods, cafes, gyms, public transport – those details matter more than granite countertops. If it makes day-to-day life easier, it makes the property more appealing.
Bottom line: city rentals aren’t slowing down, they’re just shifting. Guests want remote-friendly setups and hosts who adapt to their rhythm. Keep up with that, and occupancy takes care of itself.
Market Trends and Future Projections
Trends in short-term rentals change fast. What looked like a safe bet a year ago might already feel old news.
Right now, a few things keep popping up: almost everything’s booked online, guests want privacy and flexibility, and eco-friendly stays are finally more than just a buzzword. None of this is shocking, but it’s reshaping demand all the same.
As for what’s next? The market’s still climbing. No big secret there. The hard part is figuring out which of these shifts are worth chasing – and which ones you can safely ignore.
Investment Strategies for Short-Term Rentals
One of the biggest shifts in short-term rentals is how people book. Online platforms are basically taking over – by 2029, they’re expected to handle around 85% of all revenue. If your place isn’t easy to find and book online, you’re missing out.
Travelers also keep leaning toward private, one-of-a-kind stays instead of standard hotel rooms. They want something flexible, personal, and a little different. That’s where the demand is heading.
Sustainability is another big one. More guests are looking for rentals that actually walk the walk – energy-efficient appliances, recycling, solar panels, that kind of thing. Eco-friendly features aren’t just “nice extras” anymore; they’re starting to drive booking decisions.
Looking ahead, the market still points up. More disposable income, remote work, and shifting travel habits – all signs point to steady growth. The real challenge for investors is staying on top of which of these trends matter most for their properties.
Identifying Profitable Properties
Making money off short-term rentals isn’t just “buy a place and watch it fill.” It takes work – and the little choices add up.
Mixing things up helps. A city apartment, a beach house, maybe a cabin. If one slows down, another picks up. That balance keeps the income steadier.
But honestly, marketing is where so many people drop the ball. Blurry photos? Two lines of text? Nobody’s booking that. Good shots, clear info, and a few solid reviews do way more than fancy wording ever will. Push it out online, maybe boost it a little, and you’ll notice the difference.
Then there’s the setup. Guests notice small things right away – Wi-Fi that works, easy check-in, a bed that doesn’t squeak, even eco touches. It doesn’t have to be luxury, but it has to feel cared for.
And pricing – you can’t set one number and forget it. Rates should shift. Busy weekends, slow weekdays, festival season… it all changes. Keep adjusting, or you’ll either scare off guests or leave money sitting on the table.
That’s pretty much the game: keep an eye on it, tweak often, fix what feels off. The hosts who do that stay full. The ones who don’t? Their calendars stay empty.
Understanding Local Market Dynamics
Buying a rental that actually turns a profit isn’t as simple as scrolling Zillow and picking the place with the nicest kitchen. You’ve got to dig into the numbers. How often are places in that area booked? What do they go for per night? Do the prices even make sense compared to what you’d earn? If the math looks off, skip it.
Don’t just trust your gut either. There are plenty of tools out there that show past booking trends, average income, and how properties compare. Honestly, it’s worth the 10 minutes of research – it can save you years of regret.
Talking to locals helps too. They’ll tell you things the data won’t, like when the tourist rush actually happens or what kind of guests flood the area. Families? Students? Weekend partiers? Totally different markets.
And once you’ve got the place, running it is its own job. Trying to juggle everything in spreadsheets gets old fast. That’s where something like Hostify makes sense – it keeps calendars, pricing, and guest messages in one spot so you’re not buried in tabs all day. Book a demo with Hostify PMS to learn how it can help you maximize your rental property investments.
