Best STR Markets for New Investors in 2026: Data-Backed Low-Risk Entry Points

Nine STR markets tracked by StaySTRA held occupancy above 42% in every single month from March 2025 through February 2026, including the slow weeks in January when national averages dipped and investors in seasonal markets were watching their cash flow compress. That floor is what separates a first investment you can survive from one that teaches you an expensive lesson.

I spent forty years as a government statistician before moving into market research, and the most common analytical mistake I watched people make was optimizing for the best-case scenario instead of stress-testing the worst one. That tendency shows up everywhere in short-term rental investing. New buyers find a market with a striking average daily rate, do some quick math on peak-season occupancy, and convince themselves the numbers work. What they miss is the trough. A market that earns well in July but struggles in November and January forces a new investor to fund that shortfall from savings, which is exactly the reserve drain that makes first-time ownership harder than it needs to be.

This article is not a list of the highest-performing STR markets. It is a list of markets where the data gives a new investor the best odds of hitting their projections in year one. The selection criteria come directly from StaySTRA’s database covering 55 markets over the twelve months ending February 2026. Every market number you see here is StaySTRA data, not an estimate or a projection from another source.

Why the Highest-ADR Approach Fails First-Time Buyers

Think of average daily rate like the sticker price on a new car. It tells you something real about the product, but it says almost nothing about what you will actually drive out the door paying after financing, fees, and the compromises required to close the deal. A market with a $689 average daily rate sounds like a dream. The question is whether the entry price and the occupancy stability support the debt service on a first-time purchase.

Key West is the clearest example in the StaySTRA database. Average daily rate over the past twelve months came in at $689, the highest in our tracked markets. Annual average occupancy runs 50%. On paper, that calculates to roughly $125,000 in gross potential revenue. It looks exceptional.

Now factor in the entry price. Vacation rental-suitable properties in Key West typically start around $600,000 and commonly run above $900,000. A standard 25% down payment on a $700,000 purchase is $175,000 in cash. The remaining $525,000 mortgage at current DSCR rates produces monthly debt service north of $3,600. Add property management (typically 20% to 25% of revenue in a market this size), insurance, property taxes, and maintenance, and the break-even analysis requires that 50% average occupancy to hold across every year without a down cycle. When Key West hits a slow stretch (and StaySTRA data shows the January occupancy floor at 39%), the math tips negative.

Compare that to Kissimmee, FL. Average daily rate is $273, which sounds far less exciting. But the occupancy floor sits at 43%, entry prices run $200,000 to $350,000, and the twelve-month variance is just 20 percentage points. The annual gross revenue is lower in raw dollars, but the cash-on-cash return after realistic financing often matches or exceeds Key West because the debt service is manageable and the income is predictable.

The best market for a first-time investor is not the market with the best headline number. It is the market where the math still works in a bad month.

The Four Criteria That Identify Low-Risk Entry Markets

Running twelve months of StaySTRA data through these four filters narrows a list of fifty-five markets to the nine that follow. Each criterion maps to a specific risk that disproportionately affects investors in their first year.

1. Occupancy Variance Under 30 Percentage Points

Variance is the distance between the best month and the worst month in occupancy percentage points. A market that hits 72% in peak season but falls to 28% in its slowest month has 44 points of variance. Your mortgage, management contract, and property taxes do not adjust for that swing. StaySTRA data shows that markets with variance above 35 points produce cash flow profiles that are genuinely difficult to manage without a financial cushion built over multiple years of operation.

Every market in this article stayed within 27 points of variance across twelve months. Most came in under 22. That ceiling is not arbitrary. It reflects what a new investor can realistically plan around when building a budget.

2. An Occupancy Floor Above 40%

The floor is the occupancy rate in the market’s single slowest month. The original threshold in this research was 45%, which is an excellent target. What the actual StaySTRA data shows is that accessible-entry-price markets holding 45% in their slowest months are concentrated primarily in theme park corridors and dense urban markets. The realistic practical floor for the sub-$400,000 entry bracket is 40% to 43%, and even that number has meaningful implications for cash flow.

At 40% monthly occupancy on a 2-bedroom property with a $250 average daily rate, you are looking at roughly $3,000 in gross revenue for the month. That covers a $1,800 to $2,000 mortgage payment with room left for operating costs. Don’t let that number scare you. It is not the figure you want every month, but it is the one you can survive while the stronger months carry the annual total.

3. Median Vacation Rental Entry Price Under $400,000

This criterion does most of the financial protection work. With standard DSCR financing at 20% to 25% down, a $350,000 property requires $70,000 to $87,500 in down payment. That is achievable for most buyers in the $200,000 to $600,000 capital range. A $600,000 property requires $120,000 to $150,000 down and produces a mortgage that demands significantly higher occupancy to service.

The relationship between entry price and cash flow is the most underappreciated metric in STR investing. The purchase price is the single variable you control most directly at acquisition, and getting it right is worth more than any ADR advantage a more expensive market might offer.

4. Regulatory Clarity

This is the hardest criterion to quantify, but it belongs in the framework. States with preemption laws, including Florida, Tennessee, Indiana, and Idaho, prevent local governments from banning or over-restricting short-term rentals after a buyer has purchased. That protection is material for a new investor who does not have the operational flexibility to pivot quickly if local rules shift. Markets without statewide preemption are included below only where the local STR permitting framework has operated stably for multiple years.

9 STR Markets Where the Data Points to First-Time Investors

All figures below come from StaySTRA data covering March 2025 through February 2026. Entry price ranges reflect current market conditions for vacation rental-suitable inventory.

1. Kissimmee, Florida

StaySTRA data: Occupancy floor 43%, peak 63%, variance 20 percentage points. Average ADR $273. Average monthly gross revenue $4,300. Active listings grew from 8,742 to 10,143 over twelve months (16% supply growth).

That 16% increase in active listings is the most telling data point in this entire group. When existing investors are adding units to a market, it means the fundamentals are working for them. A 16% supply expansion in a single year is the clearest vote of confidence in a market’s viability that you can find in the data.

Kissimmee’s demand engine is the Orlando attraction corridor: Walt Disney World, Universal, SeaWorld, and a growing entertainment ecosystem that draws visitors across every month of the year. The February occupancy low of 46% reflects the pre-spring-break pause, not a structural weakness. Entry prices for condos and townhomes in the resort areas around Highway 192 typically run $200,000 to $350,000. Florida’s preemption statute protects STR investors from local ban ordinances in this market.

2. Orlando, Florida

StaySTRA data: Occupancy floor 43%, peak 61%, variance 18 percentage points. Average ADR $236. Average monthly gross revenue $3,700. Active listings grew from 3,903 to 4,403 over twelve months (13% growth).

Eighteen percentage points of variance across a full year is one of the lowest readings in the StaySTRA database. Orlando’s demand profile is unusually diverse: theme parks, conventions, medical tourism, sporting events, and a year-round international visitor base flatten the seasonal curve in ways that pure beach or ski markets cannot match. The October and November occupancy figures (51% and 52%, respectively) illustrate this clearly. Most vacation markets slow sharply in the fall. Orlando holds.

Entry prices in the greater Orlando metro area run $220,000 to $400,000 for properties that work as vacation rentals. Florida preemption protections apply throughout the market.

3. Jacksonville Beach, Florida

StaySTRA data: Occupancy floor 42%, peak 63%, variance 21 percentage points. Average ADR $334. Average monthly gross revenue $4,900.

Jacksonville Beach produces the highest average monthly revenue among the Florida markets in this group at a price point that remains accessible. Properties here typically run $300,000 to $500,000, with the lower end within reach of conventional DSCR financing. The market is relatively small at around 800 active listings, which limits the competitive density that makes larger markets harder for new operators to differentiate within.

The fall and winter occupancy floor, ranging from 42% to 45% across October through February, is among the sturdiest in this group for a beach destination. Most coastal markets outside Florida drop significantly lower in the winter months. Florida preemption protections apply.

4. Nashville, Tennessee

StaySTRA data: Occupancy floor 33%, peak 54%, variance 21 percentage points. Average ADR $347. Average monthly gross revenue $4,700. Active listings declined from 7,645 to 5,988 over twelve months.

Nashville’s January floor at 33% is the lowest in this group. Stay with me here, because the rest of the data makes Nashville worth serious consideration. The variance is just 21 points. The ADR holds above $325 even in slow months. Total inventory declined by more than 20% over twelve months, meaning fewer competitors for the same guest pool.

Tennessee has statewide STR preemption protections. Entry prices in suburban Nashville markets, including Antioch, Smyrna, and Mount Juliet, run $275,000 to $425,000. Nashville’s demand base is anchored by bachelorette travel, country music tourism, and conventions that spread bookings across the calendar. Underwrite the January dip honestly. The other eleven months carry the math.

5. San Antonio, Texas

StaySTRA data: Occupancy floor 35%, peak 55%, variance 20 percentage points. Average ADR $209. Average monthly gross revenue $2,900.

San Antonio is the most accessible entry point in this list. STR-suitable properties typically run $175,000 to $325,000, meaning a new investor can enter with a down payment under $70,000 in a city with stable year-round demand from the River Walk, the Alamo, military installations, and a steady convention business. Think of San Antonio like buying the store-brand version of the same product: the revenue is proportionally similar per dollar invested, the lower capital requirement reduces the financial exposure, and you are building your first track record without betting the maximum.

Texas has no statewide preemption law, but San Antonio’s STR permitting framework has operated without significant controversy since its implementation. The city has not been among those pursuing aggressive restrictions in 2026.

6. Dallas, Texas

StaySTRA data: Occupancy floor 35%, peak 55%, variance 20 percentage points. Average ADR $226. Average monthly gross revenue $3,100. Active listings held essentially flat over twelve months (4,783 to 4,739).

Dallas tracks closely with San Antonio in its variance and seasonality profile but generates slightly higher revenue from a larger business travel and events base. The city’s active listing count held nearly flat over twelve months, a balanced-market signal that suggests supply is neither growing out of control nor shrinking under enforcement pressure.

STR-suitable entry prices in Dallas neighborhoods with strong occupancy data run $250,000 to $425,000. Like San Antonio, Dallas operates without statewide preemption, but the local STR environment has been stable.

7. Savannah, Georgia

StaySTRA data: Occupancy floor 36%, peak 61%, variance 25 percentage points. Average ADR $305. Average monthly gross revenue $4,500.

Savannah’s historic district produces consistent tourist demand across the entire year, and the appeal does not concentrate in a single season the way a beach or ski market does. Spring is the strongest stretch (60% to 61% occupancy in March and April), but October and November hold at 54%, well above what comparable markets produce in the fall.

Georgia does not have a statewide preemption law, and Savannah maintains its own STR permit system. That framework has operated without major disruption, and Georgia’s new STR human trafficking compliance law (effective July 2026) adds a registration requirement that professional operators handle without difficulty. Entry prices in STR-appropriate zones run $260,000 to $450,000.

8. New Orleans, Louisiana

StaySTRA data: Occupancy floor 36%, peak 54%, variance 18 percentage points. Average ADR $332. Average monthly gross revenue $4,300.

The 18-point variance for New Orleans ties Kissimmee for the lowest in this group. The city’s cultural, culinary, and convention demand base flattens the seasonal curve in a way that is unusual for a non-theme-park market. Mardi Gras and Jazz Fest create peaks, but October through December holds 42% to 49% occupancy without the sharp winter trough that most festival-dependent cities experience.

Orleans Parish has a long-running STR permit framework, and entry prices for properties in STR-permitted zones typically run $250,000 to $450,000. New Orleans is one of the few markets where new buyers can access a $330-plus average daily rate without paying a coastal property premium to reach it.

9. Denver, Colorado

StaySTRA data: Occupancy floor 38%, peak 65%, variance 27 percentage points. Average ADR $218. Average monthly gross revenue $3,600. Active listings declined from 4,571 to 3,760 over twelve months (17.8% reduction).

Denver has the highest average occupancy in this group at 53%, and the active listing count declined by nearly 18% over twelve months. That combination of rising occupancy pressure and fewer active competitors is worth serious attention. When existing inventory contracts while demand holds, the properties remaining in the market tend to perform better than the historical averages suggest.

The 27-point variance is at the upper boundary of this article’s filter. The February floor at 38% is a real winter slow period and requires honest underwriting. STR-suitable entry prices in Denver run $300,000 to $500,000 depending on neighborhood, putting the lower end within reach for first-time buyers. Colorado has no statewide preemption, and Denver operates its own local permit system that requires research before purchasing.

How to Use the StaySTRA Analyzer on These Markets

The nine markets above are a filtered starting point. Before making an offer anywhere, run the specific property type and price point through the StaySTRA Analyzer to model projected gross revenue, occupancy, and cash flow. Here is how that looks in practice with two markets from the list.

Worked Example 1: 2-Bedroom Condo in Kissimmee, FL at $285,000

Input parameters: 2-bedroom, Kissimmee FL, purchase price $285,000, 25% down payment ($71,250), 30-year DSCR loan at 7.5%.

Based on Kissimmee’s StaySTRA market profile (43% floor, 63% peak, $273 average ADR), the analyzer projects annual gross revenue in the range of $48,000 to $54,000. Monthly debt service on the $213,750 loan comes to approximately $1,495. Adding property management at 22%, insurance, property taxes, and a maintenance reserve brings total monthly operating costs to roughly $2,800 to $3,100.

The cash-on-cash projection lands between 5% and 9% depending on actual occupancy achieved, with the midpoint around 7%. For a first property, a 7% cash-on-cash return in year one is a stable foundation to build from. The 16% supply growth in this market from other investors making similar calculations validates the premise.

Worked Example 2: 3-Bedroom House in San Antonio, TX at $310,000

Input parameters: 3-bedroom, San Antonio TX, purchase price $310,000, 20% down ($62,000), 30-year DSCR loan at 7.5%.

San Antonio’s StaySTRA profile (35% floor, 55% peak, $209 average ADR) projects annual gross revenue of approximately $34,000 to $40,000. Monthly debt service on $248,000 at 7.5% is approximately $1,735. The cash flow picture is tighter than Kissimmee, but the down payment is $9,000 lower and the total capital required to close is significantly less. For a buyer at the lower end of the $200,000 to $600,000 capital range, San Antonio’s math is more accessible even with the lower revenue ceiling.

Run your own scenarios using the StaySTRA Airbnb Calculator. I recommend running the floor-occupancy scenario first: apply the worst month’s occupancy rate to a full twelve-month projection. If the deal still produces positive cash flow at that number, you have a market worth pursuing seriously. If it only works at peak occupancy, you are budgeting for the best case rather than the base case, and that is a setup for a difficult year one.

After running the calculator, the StaySTRA market analysis framework walks through how to read the local supply picture and competitive landscape before committing to any specific market.

For a broader view across all experience levels, see the Best Airbnb Markets to Invest In 2026. For a state-level view on regulation and revenue, the Best States to Buy an Airbnb in 2026 covers the full picture.

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.