Best States to Buy an Airbnb in 2026 A Data-Backed Ranking by Revenue Regulation and Market Depth

South Carolina properties are delivering a median $55,440 per year in gross STR revenue, according to StaySTRA data through early 2026. That puts the Palmetto State ahead of Tennessee, Florida, Colorado, and every other market most STR investors are watching. Isle of Palms alone is clearing $101,700 annually at a median ADR of $536. If your mental shortlist for your next vacation rental starts with Nashville or Orlando, it may be worth starting with the data instead.

I have been running STR market numbers for going on forty years, first as a government statistician and now as a market researcher. The pattern I see most often is investors defaulting to the states they already know: Florida because it is warm, Tennessee because everyone talks about the Smokies, Colorado because the mountains photograph well. The market the data actually points to is often one state over, or a state they had not considered at all. That is what this ranking is about.

What follows is a three-dimension scoring of the best U.S. states to buy an Airbnb in 2026, built from StaySTRA performance data, regulatory analysis, and a market-depth count of viable submarkets. Each dimension matters, and none of them tells the whole story alone.

How We Scored These States

Think of this ranking like a three-legged stool. Pull one leg out and the whole thing tips. A state can have spectacular revenue numbers and still be a poor investment if cities can arbitrarily ban STRs mid-mortgage. A state can have rock-solid regulation and still offer thin returns in shallow markets. We scored each state on three dimensions:

Revenue Potential (1-10): Based on median estimated annual gross revenue across all StaySTRA-tracked markets in the state. We used last-twelve-months (LTM) metrics from our database, annualized to give a full-year revenue picture at the property level.

Regulatory Environment (1-10): Statewide preemption status, permit availability, enforcement posture, and trajectory. States with laws preventing cities from banning STRs outright score higher. States where cities are systematically restricting or eliminating permits score lower.

Market Depth (1-10): Number of viable STR submarkets tracked in StaySTRA data. Depth matters for two reasons: it gives you more geographic options when acquiring, and it signals a mature, scalable STR economy in that state.

The states below are ranked by composite score. I have included enough individual-market data that you can run your own numbers before drawing a conclusion.

The Top 10 States to Buy an Airbnb in 2026

#1: Tennessee

Tennessee is the most balanced STR investment state in the country right now. It does not lead on any single metric, but it finishes in the top tier on all three, which is what makes it the overall top pick.

StaySTRA data shows Nashville clearing $60,276 in estimated annual gross revenue at a median ADR of $301 and 61.3% occupancy. Sevierville, the main gateway to the Smoky Mountain markets, delivers $59,448 at a nearly identical occupancy profile ($292 ADR, 61.3% occupancy). The Great Smoky Mountains National Park is the most visited national park in the United States. Demand there does not thin out in shoulder seasons the way it does in ski markets or single-beach coastal towns.

On regulation, Tennessee has statewide preemption protecting STR operators from municipal bans. Cities can impose permit requirements and reasonable operational rules, but they cannot eliminate the market. That is a material difference when a DSCR lender is underwriting the income stream and needs to know it will still exist in year three.

Stay with me here: the no-state-income-tax angle is not just a personal finance benefit. It affects your net-cash-flow calculation, which in turn affects your DSCR ratio. An investor netting $3,000 per month on a $400,000 property in Tennessee keeps more of that $3,000 than the same investor in a state with income tax on rental earnings.

Five strong markets, a preemption law, and two submarkets clearing $59,000 in annual revenue at mid-range ADRs. Tennessee leads this list.

#2: Florida

Florida’s headline number is market depth: 35 viable STR submarkets tracked in StaySTRA data. No other state is close. That depth means two things for investors: you have more geographic options when acquiring, and there are more comps for appraisers and lenders when you are financing with a DSCR loan.

The revenue range in Florida is wide, which is important context. Rosemary Beach delivers $94,272 in estimated annual revenue at $545 ADR. Key West clears $91,080 at a median occupancy of 73.3%. Destin sits at $65,856. Those are exceptional numbers. But the statewide median is $38,976, which means a lot of Florida markets sit below the headline performers. Tampa checks in at $27,720. Gainesville at $24,228. Understanding which submarket you are buying into matters more in Florida than in almost any other state on this list.

Florida’s regulatory framework has historically been more permissive than its coastal-city reputation suggests. State law limits how aggressively municipalities can restrict STRs, though the patchwork of local permitting rules varies by county. Orlando has a permit system. Miami has district-level restrictions. The Gulf Coast corridor from Destin to Fort Myers has generally been hospitable to new operators.

If you are building a portfolio rather than acquiring a single property, Florida is the best state on this list for that purpose. The depth is unmatched.

#3: South Carolina

Think of South Carolina as the market equivalent of a stock that pays better dividends than the more famous company in the same sector. More investors talk about Florida’s beach markets. South Carolina’s beach markets are generating more revenue per property.

Isle of Palms, a 30-minute drive from Charleston, is delivering $101,700 in estimated annual gross revenue per StaySTRA data, at an ADR of $536 and 71% occupancy. Charleston proper runs $65,820 annually at $311 ADR and 74.2% occupancy. That 74% occupancy is one of the highest in any coastal urban market in the database. Hilton Head sits at $55,440. Pawleys Island at $49,956.

At a 40% expense ratio, $65,820 gross in Charleston leaves roughly $39,492 in net operating income. On a $450,000 property, that is a debt-service coverage ratio north of 1.3x at most standard DSCR loan structures. That pencils.

South Carolina does not have statewide preemption legislation, but the regulatory climate at the local level is generally reasonable. Charleston has a short-term rental permit system that is functional for operators who comply. Other coastal markets are less burdened by permitting requirements. Investors here are not dealing with the kind of active restriction movement that has defined New York City, Los Angeles, or Colorado mountain towns.

If I were making a case study for one underanalyzed state to present to a client, South Carolina would be that case study.

#4: Arizona

Arizona has two things going for it that few states can match simultaneously: high median occupancy and a preemption law protecting operators from city-level bans.

The state’s median occupancy runs at 68.6% per StaySTRA data, the highest in this top-10 group. That occupancy is driven by year-round demand. The Phoenix metro area draws winter visitors from November through March, then pivots to business travel and events during shoulder months. Sedona adds a category of its own: a desert destination generating $56,556 annually at $290 ADR and 70% occupancy. Scottsdale runs $50,340.

Arizona’s preemption law has faced legal and legislative challenges. As of 2026, the framework protecting STR operators from municipal bans remains in place. Investors should monitor its status, as several municipalities have pushed for rollback. What the law provides right now is material: even if a city wants to restrict Airbnb in residential zones, state law constrains how far that restriction can go. That stability has real value when a lender is counting rental income in the DSCR calculation.

With 10 tracked markets and a median annual revenue of $37,266, Arizona offers both solid returns and genuine geographic optionality within the state.

#5: Colorado

Colorado’s mountain market premium is real. Breckenridge delivers $64,152 annually at $393 ADR and 62.5% occupancy. Steamboat Springs runs $54,648. Frisco clears $50,232. Those are among the highest absolute ADRs in this entire dataset.

The caution with Colorado is regulation at the local level. Mountain towns have been aggressive about managing STR supply in recent years. Breckenridge has a permit system with hard caps. Colorado courts have upheld certain STR fees and permit restrictions as legitimate regulatory tools. The statewide regulatory environment is patchwork: Colorado does not have preemption legislation, which means each municipality sets its own rules.

Investors who know the specific rules in a target market can do very well in Colorado. The revenue numbers are strong enough to support DSCR underwriting on properties that pencil at current acquisition prices, particularly in the mid-tier ski towns where entry prices are lower than Aspen or Vail but revenue profiles are not proportionally lower. Eight markets with solid data gives you options.

#6: North Carolina

North Carolina is the best state on this list for market depth relative to regulatory risk. Fifteen viable STR submarkets in StaySTRA data, and the regulatory environment is among the more permissive on the East Coast.

The Outer Banks is the anchor market. Kill Devil Hills delivers $42,936 annually at $269 ADR and 61.3% occupancy. Blowing Rock, in the Blue Ridge Mountains, runs $40,236. Asheville comes in at $30,288. Charlotte ($30,228) and the Research Triangle markets add urban inventory to what is otherwise a coastal-and-mountain story.

North Carolina does not have statewide preemption, but there has been no aggressive municipal restriction movement to match what New York City or Chicago have pursued. The 15-market depth gives portfolio investors meaningful options, and entry price points in most North Carolina markets are lower than comparable Florida or South Carolina coastal markets. That improves cash-on-cash return calculations for investors working within DSCR qualification thresholds.

Run your target market through the StaySTRA analyzer before committing to a specific North Carolina city. The state median of $29,244 annually obscures a wide range from $21,000 at the lower end to $43,000 at the Outer Banks.

#7: Nevada

Nevada’s numbers are stronger than most investors expect, and most of those investors are not thinking about Henderson or North Las Vegas when they think about STR investing in the state.

Henderson delivers $54,780 annually at $292 ADR and 67.7% occupancy per StaySTRA data. North Las Vegas runs $51,000 at $285 ADR. These are not resort markets. They are capturing business travel, entertainment visitors, and convention overflow from the Las Vegas Strip. The year-round demand profile is different from a seasonal beach market: occupancy is driven by events and convention traffic, which creates a more predictable revenue base than a summer-only coastal market.

The caution in Nevada is Clark County’s regulatory posture, which has been contentious in recent years. Investors should verify current permit status and local requirements before acquiring. Do not let Clark County’s enforcement history put you off the Nevada numbers entirely: the revenue fundamentals in Henderson and North Las Vegas are compelling enough to warrant a serious look.

#8: Texas

Texas has state preemption legislation protecting STR operators. It has 33 tracked submarkets in StaySTRA data, second only to Florida in this ranking. Those are two meaningful structural advantages. The revenue numbers, though, require careful reading.

The statewide median estimated annual revenue sits at $26,112 with a median occupancy of 40%. That occupancy figure is the lowest in the top-10 by a meaningful margin, largely driven by urban Texas markets where STR supply has expanded rapidly. Austin comes in at $33,528 with 57.7% occupancy. Port Aransas on the Gulf Coast delivers $48,024. Fredericksburg, in the Hill Country wine country corridor, clears $41,844.

Texas rewards investors who pick their submarket carefully. The state-level numbers look modest because the state contains both high-performing leisure markets and a large volume of lower-performing urban and suburban inventory. For DSCR financing, the specific property’s projected revenue matters more than the state median, and a leisure market like Port Aransas or Fredericksburg will pencil very differently than a generic Austin suburban listing.

Read our STR Financing Guide for 2026 to understand how lenders evaluate rental income in markets with wide revenue variance before applying for a DSCR loan in Texas.

#9: Montana

Montana’s appeal is regulatory, not revenue. There is almost no STR restriction framework at either the state or local level in the markets where investors are active. When you have watched markets long enough, one of the most durable advantages any market can have is what is NOT there: no moratorium, no permit cap, no city council working group on short-term rental impacts. Montana has none of those things in most of its market areas.

Dayton, MT delivers $33,156 annually in StaySTRA data. Billings, primarily a business travel market, clears $21,468. The data footprint is smaller because the markets are smaller. Big Sky, Whitefish, and the Glacier and Yellowstone gateway towns are generating demand that the formal data does not fully capture yet, partly because supply is still catching up to interest.

Investors who acquire in Montana now, in established leisure markets near the national parks or major ski areas, are positioning for a demand curve that has not fully arrived. It scores lower on current revenue than states above it on this list. It scores near the top on regulatory risk-adjusted return potential for investors with a multi-year horizon.

#10: Idaho

Idaho passed HB 583 in early 2026, making it one of the most recent additions to the list of states with preemption laws protecting STR operators from local bans. The law is still new, and the market data is still catching up to its implications. Boise, the primary Idaho market with substantial StaySTRA data, delivers $24,960 in estimated annual revenue at $149 ADR and 65.5% occupancy.

The 65.5% occupancy in Boise is notable. In a state where the vacation rental market is still maturing, that occupancy rate tells you demand exists. The ADR will grow as the market develops, and the preemption law removes the risk that any Idaho city will eliminate the market before it reaches its ceiling. Coeur d’Alene, Sandpoint, and the Sun Valley area represent Idaho’s highest-demand leisure markets with revenue profiles significantly above Boise.

Idaho belongs on this list because it combines regulatory certainty with a demand foundation that has not yet translated into mature pricing. For investors with a three-to-five year horizon, that combination is worth evaluating. Run the numbers on your specific Idaho target in the StaySTRA analyzer.

States to Avoid for New STR Investors in 2026

Four states consistently score low across all three dimensions for investors who are not already established in the market:

California: City-level restrictions are severe and expanding. Multiple coastal markets have strict permit caps or outright bans in residential zones. Acquisition prices are high relative to revenue potential. It is the wrong starting point for a first or second STR property.

New York: New York City’s Local Law 18 has effectively banned most short-term rentals in the five boroughs. The state added a statewide STR sales tax in 2026. Outside the city, the regulatory trajectory is unfavorable and acquisition costs remain high relative to STR income potential.

Illinois: Chicago has been tightening STR restrictions and the state lacks preemption. StaySTRA data shows Illinois averaging $35,736 annually, which is not a bad number, but markets heading in the wrong regulatory direction rarely reverse quickly.

Oregon: Oregon lacks statewide preemption and several major markets, including Portland, have active restriction frameworks. No preemption plus active municipal restriction is a difficult combination for DSCR-financed investors who need income stability.

Overlooked States Showing Strong Numbers

A few states are not getting the attention their numbers deserve:

Nevada outside Las Vegas proper: Henderson ($54,780/year) and North Las Vegas ($51,000/year) are treated as overflow, but their revenue profiles stand on their own. These are primary-market numbers for a different traveler than the Strip draws, and they deserve to be evaluated that way.

South Carolina: It appeared at #3 above, but it deserves a second mention here because most investors doing their first state-level comparison do not include it in the shortlist. If you are comparing South Carolina to Tennessee or Florida using a general sense of “where do people vacation,” you will underestimate it consistently. The Isle of Palms and Charleston data should change that comparison.

Missouri: Eight tracked markets in StaySTRA data, $27,774 in median annual revenue, and a generally permissive regulatory environment. Branson is a significant leisure market. Kansas City is growing. Missouri rarely appears in state-ranking conversations, which keeps competition lower than it deserves to be.

Before buying in any market, run the data on your specific target in the StaySTRA analyzer. State medians are a starting point, not a conclusion. A property in Kill Devil Hills, North Carolina generates nearly 50% more than the state median. A property in suburban Jacksonville, Florida generates less than half the Florida statewide median. The state ranking gives you a direction. The market-level data tells you whether the specific property pencils.

If you are financing with a DSCR loan, see our complete STR Financing Guide for 2026, which covers how lenders evaluate rental income, what coverage ratios they require, and which market types tend to pass underwriting most consistently. Also see the Best Airbnb Markets rankings for market-level data and the How to Buy an Airbnb step-by-step guide if you are earlier in the research process.

Data in this article represents StaySTRA database metrics through early 2026. Revenue figures are estimated annual gross based on last-twelve-months performance data and are presented at the median across tracked markets in each state. Individual property performance will vary based on location, property type, amenities, management quality, and pricing strategy. 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.