7 States To Buy Airbnb Investment Properties In 2025 For Maximum ROI

Investing in Airbnb properties can be a profitable venture, especially with the growth of the short-term rental market. When considering where to purchase a property to maximize return on investment (ROI), several factors come into play, such as occupancy rates, average nightly rates, local regulations, and tourism levels. Below, we explore some of the best states for purchasing Airbnb properties in 2025, highlighting what makes each location ideal for short-term rentals.

1. Florida: High Demand for Year-Round Rentals

Florida remains one of the best states for Airbnb investments due to its thriving tourism industry. Popular destinations like Orlando, Miami, and Tampa, Florida attract visitors year-round. Orlando, with its theme parks, has one of the highest Airbnb occupancy rates in the country, as families flock to Disney World and Universal Studios. Miami, known for its beaches and vibrant nightlife, also draws a high volume of tourists and thus commands a premium nightly rate.

Pros:

• High demand year-round thanks to favorable weather and attractions.
• Tourism-friendly regulations in certain areas, although it’s important to check city-specific rules.
• Strong potential for ROI due to high occupancy and nightly rates in popular cities.

Cons:

• Competition can be fierce in popular areas.
• Regulation restrictions exist in certain cities, so research is necessary before purchasing.
• Risk of natural disasters, particularly hurricanes, can cause property damage, insurance spikes, and periodic tourism slowdowns during hurricane season.

2. Tennessee: The Rising Star of Short-Term Rentals

Tennessee is rapidly becoming a hotspot for Airbnb investments. Nashville and Gatlinburg are among the most sought-after destinations for short-term rentals. Nashville, known as “Music City,” attracts country music fans and bachelorette parties throughout the year. Gatlinburg, close to the Great Smoky Mountains, is ideal for vacation rentals, offering visitors a scenic and adventurous retreat.

Pros:

• Growing popularity among tourists, especially those looking for music and nature-based experiences.
• Affordable property prices compared to other high-ROI states.
• The favorable regulatory environment in many parts of the state.

Cons:

• Seasonal demand fluctuations in more rural areas like Gatlinburg.
• City-specific regulations in Nashville that may affect short-term rental owners.

3. Arizona: Strong ROI in a Tourism Hub

Arizona has become increasingly popular for short-term rental investments, particularly in cities like Phoenix and Scottsdale. Scottsdale, known for its golf courses, luxury resorts, and arts scene, has emerged as a premium destination for both winter snowbirds and spring-break tourists. Phoenix, as a major urban hub, sees high demand from both business travelers and vacationers.

Pros:

• High nightly rates and occupancy levels, especially during winter months.
• Tourist-friendly cities with events like the Phoenix Open and Cactus League spring training.
• Affordable property prices in suburban areas around Phoenix and Scottsdale.

Cons:

• Regulatory challenges exist, especially with recent city ordinances in Scottsdale.
• Seasonal demand may dip during the hot summer months.

4. Texas: Diverse Opportunities in a Business-Friendly State

Texas boasts several ideal cities for Airbnb investments, with Austin, Dallas, and Houston leading the charge. Austin, known for its live music scene, annual events like SXSW, and vibrant nightlife, attracts a consistent influx of tourists. Dallas and Houston also host numerous conventions, sporting events, and cultural attractions that drive short-term rental demand.

Pros:

• Favorable state laws for short-term rentals.
• High demand due to tourism, business events, and festivals.
• Low property taxes compared to other high-demand states.

Cons:

• Higher property prices in Austin due to the city’s growing popularity.
• Regulatory restrictions in some Texas cities, requiring owners to stay updated on city laws.
• Natural disaster risks in certain regions, including hurricanes in coastal areas and potential flooding and tornadoes, which may impact property safety and guest booking stability.

5. Colorado: A Perfect Destination for Seasonal and Year-Round Rentals

Colorado’s popularity as a tourist destination makes it an excellent choice for Airbnb investments. The state draws visitors in both winter and summer, thanks to its mountain resorts and outdoor activities. Denver, Boulder, and mountain towns like Breckenridge and Aspen see high demand from tourists interested in skiing, hiking, and mountain biking.

Pros:

• Year-round tourist appeal due to seasonal sports and nature-based tourism.
• High occupancy rates in popular mountain towns and cities like Denver.
• Strong ROI potential with high nightly rates in ski resort areas.

Cons:

• High property prices in sought-after areas like Aspen and Boulder.
• Strict regulations in some cities, particularly Denver.

6. North Carolina: Affordable Properties and Diverse Tourism

North Carolina, with cities like Asheville and Charlotte, has seen a boom in short-term rentals due to its variety of attractions. Asheville’s proximity to the Blue Ridge Mountains and its renowned culinary and arts scene makes it particularly attractive to tourists. Charlotte, as a major urban center, also draws business travelers, which contributes to year-round occupancy.

Pros:

• Affordable real estate prices compared to other states on this list.
• Steady demand is driven by both leisure and business tourism.
• Tourism-friendly regulations in many parts of the state.

Cons:

• Seasonal fluctuations may impact occupancy in smaller towns.
• Local regulations in cities like Asheville require owners to stay informed.
• Susceptibility to hurricanes in coastal areas, which can lead to property damage, insurance concerns, and seasonal disruptions in rental activity.

7. California: High Returns in Prime Locations

California has long been a favorite for short-term rental investments, especially in places like Los Angeles, San Diego, and San Francisco. These cities attract tourists for various reasons, from beaches to theme parks to national landmarks. While property prices are high, the ROI potential remains strong in well-established markets.

Pros:

• High nightly rates and strong demand in popular tourist cities.
• Year-round tourism due to diverse attractions and a mild climate.

Cons:

• High property prices and associated expenses.
• Strict regulations in many cities, including San Francisco and Los Angeles.

When deciding where to buy an Airbnb property in 2025, it’s essential to consider the local market demand, regulatory environment, and initial investment costs. States like Florida and Tennessee offer year-round demand with favorable regulations, while Colorado and Arizona provide seasonal demand that supports high occupancy rates. North Carolina and Texas also stand out as affordable options with growing tourism sectors. Regardless of the location, researching local laws and tourist trends is key to maximizing the ROI on your Airbnb investment. Natural disasters, especially in southern states, can be a significant risk factor for Airbnb property owners, affecting both long-term investment costs and guest occupancy during certain times of the year.