The Top 10 Cities for Short-Term Rentals in 2024

The short-term rental market has exploded in recent years, with more travelers opting to stay in privately owned homes and apartments rather than traditional hotels. Major sites like Airbnb, VRBO, and FlipKey have made it easier than ever for property owners to rent out their spaces to visitors looking for an authentic local experience.

In 2024, the U.S. short-term rental industry is projected to be worth over $46 billion. With such impressive growth, many property investors and managers are looking to capitalize on this trend. But with so many options across the country, how do you know which cities offer the best opportunities?

This article will countdown the top 10 best cities for short-term rentals in the United States as we enter 2024. We’ll analyze data on rental demand, occupancy rates, Airbnb regulations, and more to give you keen insights into promising markets for your next rental property investment.

10. Dallas, TX

The Dallas-Fort Worth metroplex is one of the fastest-growing metro areas in the country, on pace to become the fourth largest by 2025. Tourism is booming as well, with over 32 million visitors in 2022 spending $7 billion.

Major attractions like the newly opened National Medal of Honor Museum and the epic Globe Life Field continue fueling travel demand. Looking ahead, massive events like the 2024 National Rifle Association Annual Meetings will keep the crowds coming.

For real estate investors, short-term rentals remain a lucrative opportunity here despite tight regulations on multifamily buildings. Enforcement often lacks, while single-family homes have fewer restrictions. Homeowners earned over $1,100 a month on average renting out properties in 2022.

With the region expecting 39 million visitors by 2025, savvy investors can capitalize on Dallas’ soaring tourism industry through short-term single-family home rentals. Sports events, conventions and new attractions provide a steady stream of travelers eager for an authentic local stay.

9. Denver, CO

Denver, Colorado is an increasingly popular destination for tourists and travelers. Over 17 million visitors flocked to the Mile High City in 2022 to experience its epic skiing, booming craft beer scene, and newly legalized recreational marijuana dispensaries. Tourism demand has kept occupancy rates high, averaging around 73% for area hotels and short-term rentals last year.

While Denver does have laws restricting some short-term rental properties, they primarily target multi-unit buildings rather than single-family homes. Enforcement has also been relatively lax up until this point. As such, there remain plenty of opportunities for investors to profit from short-term home and apartment rentals in popular central neighborhoods like Capitol Hill, Lower Downtown, and City Park West. Investors can expect average monthly profits of $1,600 or more from Denver short-term rental properties in 2024.

8. San Diego, CA

Blessed with idyllic weather year-round, San Diego draws over 41 million annual visitors to its sandy beaches and vibrant urban communities. Occupancy rates averaged around 70% in 2022, as travelers packed hotels to capacity. Tourism infrastructure is well-developed, with the San Diego International Airport providing easy access.

For real estate investors, San Diego provides a welcoming environment for short-term rentals. The city allows hosted home shares as well as unhosted entire home rentals. There is also no minimum stay requirement. Unlike other California cities, San Diego places no cap on the number of licensed short-term rentals. Investors can capitalize on high tourism demand, with average monthly profits around $2,100 for an entire home. With temperate weather, plenty of attractions, and flexible regulations, San Diego offers an appealing market for those looking to break into short-term rental investing.

7. Miami, FL

Miami is an iconic tourist hotspot, welcoming over 24 million annual visitors drawn to its beautiful beaches, vibrant nightlife, and cultural attractions like Little Havana. Tourism demand remains high thanks to major annual events that entice travelers worldwide, including Art Basel Miami Beach, one of America's largest modern art festivals, as well as the star-studded South Beach Wine and Food Festival.

Average hotel occupancy rates have recently hit an impressive 75% in the area. Additionally, new state legislation passed in 2022 restricts local governments from outright banning short-term rentals, creating a more favorable regulatory environment for hosts and investors. While some regulations do exist specifically within Miami Beach, there remain abundant opportunities to profit across the metro area.

Investors renting out an entire short-term rental property in Miami can expect to earn an average of $2,300 per month given the booming level of tourism the city continues to enjoy.

6. Nashville, TN

Nashville is a major hub for tourism, welcoming over 16 million visitors in 2022. Known as the epicenter of country music, the city boasts iconic venues like the Grand Ole Opry House and the Ryman Auditorium. Major festivals like the CMA Fest also attract hundreds of thousands of fans annually.

Beyond music, Nashville offers a lively dining scene with hot restaurants and bars centered downtown on Broadway. The city also enjoys an average hotel occupancy rate around 77%, indicating strong tourism demand.

While Nashville does have restrictions on non-owner-occupied short-term rentals, they mostly apply to apartments and condos. Enforcement has also been fairly minimal so far. For single-family homes, short-term rental investing remains an opportunity. According to data, owners earn an average of $2,500 a month renting out entire properties to visitors in popular neighborhoods.

5. Los Angeles, CA

Los Angeles continues to be a premier destination for tourists, welcoming over 58 million visitors in 2022. Occupancy rates averaged 76% last year thanks to world famous attractions like Universal Studios Hollywood and the Santa Monica Pier.

In late 2022, Los Angeles passed one of America's most flexible laws allowing short-term rentals. Investors can now legally list primary residences, secondary dwelling units like backyard cottages, and even units within apartment buildings on platforms such as Airbnb. With an average monthly profit of $2,900 for entire home rentals, Los Angeles offers investors a profitable market with few barriers. However, some regulations vary across LA counties, so research both state and local ordinances thoroughly before investing. With proper preparation, Los Angeles' high tourism demand paired with accommodating rental laws provide prime short-term rental investment opportunities.

4. Austin, TX

Over 30 million visitors flocked to Austin in 2022, generating record visitor spending of $7.9 billion. Austin's popularity is fueled by major events like the Austin City Limits music festival and South by Southwest (SXSW) conference. With world-famous live music venues and a thriving food scene, hotel occupancy rates averaged 76% last year.

Austin has few regulations on short-term home rentals, making it easy for investors to profit. A 2021 state law also restricts future local short-term rental rules. Considered one of the most landlord-friendly cities in Texas, investors earned an average of $3,100 per month renting out entire private homes in Austin last year. With tourism and events expanding each year, Austin offers excellent short-term rental investment opportunities.

3. Orlando, FL

The Orlando area remains one of America's most visited destinations, welcoming over 80 million annual visitors. Iconic theme parks like Walt Disney World Resort and Universal Orlando Resort attract tourists from across the globe. In 2022, area hotels maintained high occupancy rates around 77%.

Orlando offers excellent short-term rental potential thanks to consistent tourism demand. The city has imposed no restrictions on short-term rental properties. Investors can legally list primary residences, secondary units, and dedicated rental properties on sites like Airbnb. With Orlando's world-famous theme parks fueling massive visitor numbers, investors earn average monthly profits around $3,600 for entire home rentals. Some top listings bring in over $10,000 per month during peak seasons. Orlando's booming tourism industry makes it a premier market for short-term rental income.

2. San Francisco, CA

San Francisco continues to be a leading destination for tourists, welcoming over 29 million visitors in 2022. Iconic attractions like the Golden Gate Bridge, Alcatraz Island, and the famous cable cars keep travelers flocking to the city every year. With average 2022 hotel occupancy rates around 70%, demand remains high.

A major reason San Francisco ranks so highly is thanks to the Uniform Short-Term Rental Ordinance passed in early 2022. This law legalized short-term rentals for all housing types across the city. It also eliminated a previous cap on licensed rentals. These business-friendly regulations make San Francisco extremely lucrative for rental property owners. Average monthly profits range from $4,900 for a single rental unit to over $13,600 for an entire home. With such excellent earnings potential and growing tourism, San Francisco stands out as a premier market for short-term rental investing.

1. New Orleans, LA

New Orleans tops the list as the most lucrative short-term rental market for 2024. Over 18.8 million visitors flocked to New Orleans last year, with numbers continuing to rebound after the pandemic. Hotel occupancy rates averaged around 70% in 2022, indicating strong tourism demand.

The city has minimal restrictions on short-term rentals, allowing hosts to legally rent out primary residences, secondary units like backyard cottages, and select commercial properties on sites like Airbnb. The short-term rental ordinance is one of the most permissive in the U.S. Enforcement has also been lax.

For investors, average monthly profits clock in at $5,500 for entire home rentals in New Orleans. Some top-earning listings bring in over $10,000 per month during peak seasons like Mardi Gras and Jazz Fest. Thanks to world-famous festivals, a thriving food scene, and lively music venues, New Orleans offers unmatched short-term rental income potential this year. The open regulatory environment makes the Big Easy the top market for rental property owners in 2024.

The Outlook for 2024

As the data shows, short-term rental investing remains a lucrative opportunity across many top tourist destinations in the U.S. With travel demand continuing to soar, average occupancy rates have stayed high in cities like Miami, Nashville, Los Angeles and more.

At the same time, some cities are passing more permissive laws regarding short-term rental licensing and multifamily unit rentals. Markets like Los Angeles, San Francisco and Orlando now allow a wider range of properties to be rented out to visitors on platforms like Airbnb. Combined with high tourism demand, 2024 looks to be a profitable year for U.S. rental property owners and managers.

Of course, keep in mind that regulations can always change. It’s important to research not just state laws, but also local ordinances in your target rental market. Finding a reliable local property manager is also key to ensuring compliance and maximizing earnings.

But with proper preparation, the short-term rental boom offers a lucrative way to profit from America’s enormous travel industry. The cities featured here are prime targets to consider for your next rental property investment.