Best Texas Cities for STR Investment in 2026 — A Data-Backed Ranking

Every few months, someone sends me a link to yet another “Top 10 Best Airbnb Cities” listicle and asks what I think. My usual answer involves a sigh and a reminder that rankings without context are about as useful as a weather forecast from last year.

But here is the thing. When AirDNA released their 2026 Best Places to Invest report and a small Texas oil town landed at number one nationally, even I had to sit up straighter in my chair. So I pulled our own StaySTRA data, cross-referenced the national rankings, and put together what I hope is a more honest picture of where Texas STR investment actually stands right now.

Let me walk you through it, city by city.

The Surprise at the Top. Port Arthur

AirDNA ranked Port Arthur, Texas, as the number one place to invest in short-term rentals in the entire United States for 2026. If you just spit out your coffee, you are not alone.

Port Arthur is not a beach resort or a mountain retreat. It is a petrochemical hub on the Gulf Coast near the Louisiana border, and that is exactly why the numbers work. The demand is driven by business travelers, plant workers on temporary assignments, and medical professionals. These guests book longer stays, care less about Instagram-worthy decor, and show up year-round.

Across AirDNA’s top 10 markets nationally, home prices average $296,000 with annual revenue potential of $40,500 and yields near 14 percent. Port Arthur fits that mold perfectly with an average annual revenue potential of $35,000 on relatively affordable properties.

StaySTRA data shows Port Arthur properties averaging around $110 in nightly rates with 60 percent occupancy. Those are not glamorous numbers, but the entry price is low and the returns are steady. Think of it like a savings bond compared to a stock. Less exciting, more reliable.

Abilene. The Stargate Effect

Abilene ranked second nationally in AirDNA’s 2026 report, with an average annual revenue potential of $55,000 and occupancy rates around 77 percent. That occupancy number alone should make investors pay attention.

The catalyst is clear. The first data center in OpenAI’s Stargate program is being built roughly 180 miles west of Dallas, and Abilene is feeling the demand from construction workers, engineers, and project managers who need furnished housing for months at a time.

StaySTRA data shows Abilene properties pulling about $153 ADR with occupancy hovering near 68 percent. The gap between our numbers and AirDNA’s likely reflects the difference between established listings and the revenue potential for new, optimized properties entering this surging market.

Dallas-Fort Worth. The World Cup Factor

Now, let’s talk about the elephant wearing a soccer jersey. The 2026 FIFA World Cup is coming to Dallas, and the numbers are already moving.

Short-term rental demand in Dallas for June is up 300 to 500 percent compared to last year. Fort Worth is seeing 500 to 700 percent more bookings. Projected host earnings during the tournament run about $4,400 per host in Dallas, and Airbnb is offering a $750 bonus for first-time hosts who list their entire home through July 31.

StaySTRA data shows Dallas properties currently averaging $173 ADR with about 57 percent occupancy, while Fort Worth runs slightly higher on ADR at around $176 with similar occupancy. These are solid baseline numbers, and the World Cup surge sits on top of them as pure upside.

But here is my word of caution. Don’t buy a property just for the World Cup. The tournament runs June 11 through July 19. That is five weeks. If the underlying market fundamentals don’t support year-round performance, you will spend the next 47 weeks regretting the other 47 weeks. The World Cup should be the bonus, not the business plan.

For a deeper look at how the World Cup is reshaping STR demand nationally, take a look at our FIFA World Cup 2026 STR forecast.

Houston. New Rules, New Opportunity

Houston presents an interesting case study in how regulation creates opportunity for prepared investors. The city implemented its first-ever comprehensive STR ordinance effective January 1, 2026, requiring registration, insurance, and compliance with parking and noise provisions.

StaySTRA data shows Houston averaging $167 ADR with about 55 percent occupancy. Those numbers are modest, but Houston has something most Texas markets lack, seven FIFA World Cup matches at NRG Stadium from June 14 to July 4. Searches for Houston stays are already up 80 percent, and over 500,000 visitors are expected during the tournament.

The new regulations will thin the herd of casual operators. If you are willing to register, carry proper insurance, and operate professionally, you will face less competition from the neighbor who was renting out a spare room on weekends. Regulation, when done right, favors the prepared.

Austin. The Cautionary Tale That Is Not Over

I need to be honest about Austin because our data tells a complicated story.

StaySTRA data shows Austin properties averaging $216 to $225 ADR with occupancy around 57 percent. Those are respectable numbers on the surface, but they mask what happened underneath. Austin experienced significant oversupply after the pandemic boom, and many investors who bought at peak prices with peak expectations found themselves underwater on cash flow.

The market is stabilizing. Occupancy is expected to bottom out in 2026 and begin climbing into 2027. Average daily rates are growing steadily rather than explosively, which is actually a sign of health. And new supply is growing modestly as regulatory friction and market reality slow the pace of new listings.

Certain Austin neighborhoods remain strong performers. Downtown (78701) properties can achieve occupancy rates exceeding 80 percent with ADRs well above $300. But the days of buying any Austin property and printing money on Airbnb are behind us.

For more context on national oversupply dynamics, our piece on whether the STR market is oversaturated or overhyped digs into the data behind the fear.

The Hill Country. Where Lifestyle Meets Returns

Now here is where my data-loving heart gets a little sentimental. The Texas Hill Country markets are producing some of the most interesting numbers in the state.

Fredericksburg leads the pack with StaySTRA data showing $284 to $289 ADR and about 42 percent occupancy, translating to roughly $3,400 in monthly revenue. Wine country tourism drives consistent demand, and the town has established itself as a legitimate destination brand.

Wimberley is not far behind at $251 to $253 ADR with about 47 percent occupancy, producing around $3,200 monthly. The artsy small-town charm and proximity to Austin’s workforce make it a natural weekend getaway market.

Dripping Springs shows $257 to $261 ADR but lower occupancy around 38 percent. The “Gateway to the Hill Country” branding is working, and the brewery and distillery scene draws visitors, but there is room for growth in midweek bookings.

What makes the Hill Country special is the demand profile. These are not business travelers or construction workers. They are couples on wine trail weekends, families escaping the city, and wedding guests filling entire guest houses. The guests stay longer, spend more locally, and leave better reviews. And unlike the urban markets, Hill Country properties have a lifestyle appeal that sustains property values even if STR regulations tighten.

San Antonio and Waco. The Steady Performers

Not every market needs to be exciting to be profitable.

StaySTRA data shows San Antonio averaging $176 ADR with 60 percent occupancy, producing solid monthly returns around $2,400. The Riverwalk, Alamo, and convention center drive consistent tourism demand, and the city has remained relatively affordable for investors.

Waco continues to benefit from the Magnolia effect, with $197 to $199 ADR and about 50 to 52 percent occupancy. Chip and Joanna Gaines may have moved on to other ventures, but the tourism infrastructure they helped build is self-sustaining at this point.

The Coastal Play. Galveston and Port Aransas

Texas coastal markets show the highest raw revenue numbers in our data but come with important caveats.

Galveston leads the state in our data with up to $4,500 monthly revenue, driven by $351 ADR and 50 percent occupancy. Port Aransas follows closely at $383 ADR and 45 percent occupancy. These numbers look impressive until you factor in hurricane insurance, flood zone premiums, maintenance costs from salt air, and the brutal seasonality. Your January occupancy will look nothing like your July occupancy.

If you can stomach the risk and have reserves for a bad hurricane season, coastal Texas can deliver strong returns. But go in with your eyes open and your insurance current.

So Where Should You Actually Invest

After staring at these numbers for longer than my optometrist would approve, here is what the data tells me.

If you want steady, low-risk returns, look at the demand-driven markets like Port Arthur and Abilene where business and industrial travelers provide year-round baseline occupancy.

If you want lifestyle plus returns, the Hill Country markets (Fredericksburg, Wimberley, and Dripping Springs) offer premium ADRs with properties that hold value regardless of STR regulation changes.

If you want short-term upside, Dallas and Houston offer the World Cup boost on top of solid fundamentals, but make sure the year-round math works before you buy.

If you want proven urban markets, San Antonio offers the best risk-adjusted returns among Texas metros right now.

And if you are looking at Austin, be selective. The right property in the right neighborhood still works. But “right” means doing the homework that too many investors skipped in 2021 and 2022.

We do our best to keep our data accurate and up to date, but markets move fast and we are only human. Always verify current figures directly with local sources before making investment decisions.

Run the Numbers for Your Target Market

Want to see how these numbers play out for a specific property? Our free StaySTRA Analyzer pulls real market data so you can estimate revenue, occupancy, and expenses for any address in Texas.

For deeper market profiles including active rental counts, average daily rates, and neighborhood-level data, explore our Texas market profiles.

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