Short-Term Rental Investing in 2026: What the Numbers Actually Look Like

Pigeon Forge, Tennessee posted a 26% year-over-year revenue increase in February 2026, according to StaySTRA data. Park City, Utah, the market so many investors have treated as the benchmark for mountain STR investing, fell 31% in that same month. Both numbers come from the same database, covering the same period. That is not a contradiction. It is the single most important thing I can tell you about short-term rental investing in 2026: the asset class is not moving as a block, and investors who treat it like one are making expensive mistakes.

I have spent the past several months running queries against StaySTRA’s market database, and what the data shows is genuinely interesting. Not uniformly great, not uniformly difficult. Some markets are penciling well for DSCR borrowers right now. Others look fine on paper until you examine the direction of travel. The goal of this article is to show you both sides, give you the actual numbers, and walk through the breakeven math so you can evaluate any market you are considering.

If you want to jump straight to market rankings, the StaySTRA Best Airbnb Markets hub covers top picks in detail. This article goes deeper on the mechanics: what revenue ranges actually look like by market type, where growth is concentrated, and what your property needs to earn to service a typical DSCR loan.

What the National Picture Shows

StaySTRA’s database covers 55 U.S. markets with monthly data through February 2026. Across those markets, the median annual gross revenue for the twelve months ended February 2026 was approximately $51,600. The range runs from $23,800 at the low end (Silver City, NM) to $128,000 at the high end (Key West, FL).

Think of the median the way you would think about a real estate price in any given city. The citywide figure tells you something useful, but the spread from the worst block to the best block often matters more. The same is true for STR revenues. Knowing the “average” market earns $51,600 is less useful than knowing that beach markets cluster between $36,000 and $128,000, and that the midpoint of that beach cluster sits around $71,000.

The occupancy picture is equally layered. Across all 55 markets in February 2026, occupancy ranged from 19% (Alexandria, MN, deep in the off-season) to 52% (Scottsdale and Phoenix, AZ). The markets with the highest occupancy are not necessarily the markets with the highest revenue, because occupancy and ADR (average daily rate) often move in opposite directions within destinations. More on that in a moment.

Revenue by Market Type: Where the Medians Actually Land

I categorized StaySTRA’s 55 markets by type, then calculated median annual gross revenue, median ADR, and median occupancy for each category over the twelve months ended February 2026. Here is what the data shows:

Stay with me here, because the urban row is worth examining closely. Urban markets have the highest occupancy in the dataset, averaging 46% versus 41% for both beach and mountain, yet they produce the lowest median ADR at $287. That pattern makes sense when you think about it the way you would think about hotels: a budget property near a convention center might run near 80% occupancy and still earn less per room than a resort running 60%. STR revenue is a product of both rate and nights occupied. Urban markets trade higher fill rates for lower rates, and the revenue math generally does not favor them as investment vehicles compared to destination markets.

Mountain markets flip that equation. A Park City or Sedona property commands premium ADR ($610 and $430 respectively) but occupancy is seasonal and often falls below 40% for the full year. The revenue math works because the high-rate nights carry a disproportionate share of the annual total.

The Top 10 Highest-Earning Markets in StaySTRA’s Database

The following table shows the ten markets with the highest median annual gross revenue over the twelve months ended February 2026. All figures come directly from the StaySTRA database.

That YoY column is the one worth studying. Key West tops the list at $128,009 in annual gross revenue and is down 17% year-over-year. Park City earns $74,174 annually and is down 31%. Two of the ten highest-earning markets in the country are declining materially. Meanwhile Gatlinburg is up 17% and Broken Bow is up 11%, and neither is widely considered a marquee market.

Don’t let the declining YoY numbers scare you away from high-revenue markets entirely. Annual revenue is the starting point, not the finish line for underwriting. A market declining from a high base can still produce sufficient income for DSCR purposes even after a revenue dip. But the direction of travel is a signal worth examining before you buy.

Where Revenue Is Growing and Where It Is Falling

Across all 55 markets in the StaySTRA database, comparing February 2026 monthly revenue to February 2025, twelve markets posted year-over-year gains and forty-three posted declines. That sounds alarming until you look at the geography of the gains, because they cluster in a specific profile: the drive-to leisure destination with a cabin or mountain character.

Markets with positive YoY revenue growth (StaySTRA data, Feb 2026 vs. Feb 2025):

• Pigeon Forge, TN: +26%
• Nashville, TN: +26%
• Traverse City, MI: +21%
• Branson, MO: +17%
• Gatlinburg, TN: +17%
• Blue Ridge, GA: +14%
• Broken Bow, OK: +11%
• Asheville, NC: +10%
• Myrtle Beach, SC: +8%
• Joshua Tree, CA: +5%
• Charleston, SC: +2%
• Scottsdale, AZ: +1%

What connects Pigeon Forge, Blue Ridge, Broken Bow, and Branson? These are accessible leisure markets: destinations where guests can drive from a major metro, stay in a cabin or A-frame, and pay a fraction of what a beachfront property costs. They attract groups who are price-sensitive enough to substitute away from coastal markets when rates get out of hand, but experience-hungry enough to travel when the value proposition is clear. Forty years of watching data move taught me that those substitution patterns tend to be sticky once they form.

The deepest declines tell a different story. Markets like Park City (-31%), Fort Pierce FL (-22%), Daytona Beach FL (-21%), and Corpus Christi TX (-19%) are not failing as markets. Many of them saw significant post-pandemic revenue surges between 2021 and 2023, and what we are measuring now is mean reversion. Park City added enormous STR supply between 2020 and 2024 and demand has not kept pace. What looks like a declining market is often a market returning to its pre-pandemic trajectory from an unsustainable peak.

A Wider View: 20 Markets Across All Types

Here is a broader snapshot showing diversity within and across market categories. These figures represent the twelve-month period ending February 2026 from the StaySTRA database.

Notice the spread within each type. Beach markets run from $36,000 (Myrtle Beach) to $128,000 (Key West), a factor of 3.5x. Mountain markets run from $40,000 (Asheville) to $84,000 (Sedona). Urban runs from $31,000 (Houston) to $74,000 (Scottsdale). That internal range within each market type matters more than the type-level median for any individual investment decision.

The Expense Ratio: Translating Gross to Net

Every figure in the tables above is gross revenue, before expenses. This is where many first-time STR investors get tripped up. They see $64,000 in annual gross revenue and assume that is close to what they will pocket. It is not.

A well-run STR typically operates at an expense ratio between 35% and 45% of gross revenue. That range covers platform fees (roughly 3% under Airbnb’s standard host-only split), property management if you hire a PM (20-30% of gross, which is why the high end of the range reaches 45%), cleaning, maintenance, supplies, insurance, utilities, property taxes, and a reserve for capital expenditures like appliance replacements and HVAC service. Self-managing hosts who handle their own operations will typically land in the 35% range. Hosts using full-service property managers will often hit 45% or above.

Think of it as a business’s gross margin. A $64,000 annual gross revenue property with a 40% expense ratio produces $38,400 in net operating income. That is the number that matters for DSCR underwriting, and it is the number lenders care about when they evaluate whether your property qualifies for a DSCR loan.

The DSCR Breakeven: What Annual Gross Revenue Does Your Property Need?

DSCR (debt service coverage ratio) is how lenders underwrite short-term rental mortgages. Rather than looking at your personal income, the lender evaluates whether the property’s rental income covers the mortgage payment. A 1.0x DSCR means rental income exactly equals annual debt service. Most DSCR lenders want to see at least 1.0x, with some requiring 1.1x or 1.2x for the best rate tiers.

For a detailed breakdown of how DSCR loans work for STR investors, including current rate ranges and which lenders are active in this space, the STR Financing Guide covers that topic in full. For our purposes here, the question is: given what the data shows about market revenues, which markets can support which purchase prices?

The table below uses a 7.5% mortgage rate (representative of DSCR loan pricing for STR properties in 2026, though your actual rate will depend on lender, LTV, and borrower profile), 20% down payment, and 30-year amortization. The columns show annual gross revenue needed to hit 1.0x DSCR at three expense ratio scenarios.

Now cross-reference against the market data. A $400,000 STR needs roughly $41,000 to $49,000 in annual gross revenue to reach 1.0x DSCR. Looking at the database, Traverse City ($49,737), Fredericksburg TX ($46,135), and Asheville ($40,512) land right in or near that band. Gatlinburg ($64,295) and Joshua Tree ($61,441) are significantly above it. Myrtle Beach ($36,499) and Houston ($30,756) would struggle to service a $400,000 mortgage under most expense scenarios.

The most important exercise you can do before any STR purchase is to pull market-level gross revenue data for your target area, apply a realistic expense ratio based on your operating model, and compare that NOI to the annual debt service at the price you are considering paying. If the math works at current market medians, you have a baseline to work from. If it does not work at the median, you need the property to perform in the upper quartile, which is a much riskier assumption to underwrite.

The STR Revenue Benchmarks article provides additional context on revenue distributions within each market type, including the spread between the 25th and 75th percentiles, which helps you assess how much above-median performance your underwriting is assuming.

The Markets That Work Best for DSCR Investors Right Now

Based on the StaySTRA data, the markets offering the best combination of annual gross revenue, positive or stable YoY trend, and DSCR-serviceable entry prices in 2026 include the following.

Gatlinburg and Pigeon Forge, TN. Both posted 17-26% YoY revenue gains in February 2026. Annual gross revenue of $60,000 to $64,000 sits well above the DSCR threshold for properties priced under $500,000, which is still achievable in these markets compared to coastal destinations.

Blue Ridge, GA. Up 14% YoY, $56,934 in annual gross revenue. Mountain cabin character, drive-to access from Atlanta. Property prices have remained more moderate than Gatlinburg, which gives the DSCR math more cushion.

Broken Bow, OK. Up 11% YoY, $63,898 in annual gross revenue. Not on most investors’ radar, which is part of why the numbers look better here than in more widely tracked markets. Lower entry prices, solid ADR at $455, and consistent demand from Dallas and Oklahoma City give this market genuine appeal for investors who can set aside the lack of name recognition.

Traverse City, MI. Up 21% YoY, $49,737 in annual gross revenue. A seasonal market with a strong summer peak and growing shoulder season demand from wine and culinary tourism. A $400,000 property here lands right at the DSCR line under a 40% expense assumption, which means your operating model matters significantly. Self-managing hosts have more room than those using full-service property managers.

Charleston, SC. The most stable of the high-revenue markets, up 2% YoY and earning $84,843 annually. Entry prices are higher here, which creates DSCR pressure in the $600,000 to $700,000 range, but properties priced appropriately against the income stream still work for well-capitalized buyers.

What to Verify Before You Buy

The StaySTRA database shows market-level aggregates, not property-level performance. Regulation matters enormously and is not captured in revenue data. Nashville’s strong numbers exist alongside ongoing permit restrictions that limit new STR supply, which is part of why revenue is holding. Park City’s decline coexists with a supply overhang that built up during the pandemic boom. Before acting on any of these numbers, verify current permitting requirements, supply trends, and any pending regulatory changes in your target market.

Seasonality is also not fully visible in an annual aggregate. A market with $64,000 in annual gross revenue might earn $12,000 in its best month and $2,000 in its worst. Your cash flow management needs to account for that volatility, especially in the first year before you have an optimized listing and a base of repeat guests.

That variance within each market is also significant. In forty years of working with data, most recently at StaySTRA and before that in government statistics, I have not seen a market where the top quartile of operators and the bottom quartile are earning the same thing. The same Gatlinburg market that averages $64,000 annually has operators earning $30,000 and operators earning $110,000. Where your property lands depends on bedroom count, amenities, location relative to the national park entrance, and the quality of your listing and operations.

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 on Your Market Before You Buy

The figures in this article come from StaySTRA’s database of 55 U.S. markets. They give you a framework and a starting point, not a final answer on any specific property. Before you make an offer, run the address through the StaySTRA Analyzer to see how that specific property type, bedroom count, and location compares against the market distribution. Market medians are useful for screening. Property-level data is what you need for a purchase decision.

If you are still working through the financing side of an STR investment, the DSCR loan landscape has its own nuances around how lenders calculate qualifying income for short-term rentals. The STR Financing Guide covers the lender landscape, current rate ranges, and what documentation you will need in detail.