Top 10 U.S. Destinations for Short-Term Rental Returns in 2025

After a few volatile years, the short-term rental (STR) market is stabilizing, and 2025 is shaping up to be a profitable year for well-positioned investors. With supply growth slowing and travel demand rising, occupancy rates and cash flow per property are both trending upward.

For investors, this environment creates a rare advantage: strong rental yields with limited new competition. Whether you’re an experienced host or a foreign national buying your first U.S. property, understanding where short-term rentals perform best is key.

This article highlights the 10 most profitable short-term rental markets in the U.S. for 2025 and explains how you can secure financing to invest in them. Each city on this list combines strong income potential with affordability, rental stability, and growth opportunities for international investors.

Key takeaways

• With STR demand rising in 2025 and new supply remaining limited, opportunities are growing for players in the space.
  
  
• Markets with high cash-on-cash return, strong occupancy, and median home prices under $510K offer the best balance of return and accessibility.
  
  
• Waltz helps foreign nationals finance short-term rental properties with DSCR loans.

U.S. short-term rental investment trends (2024–2025)

The U.S. short-term rental market reached a turning point in 2024, and 2025 is reinforcing that momentum. According to AirDNA, demand for STRs rose 7% year-over-year, while supply growth slowed to 6.9%, down sharply from more than 22% in 2022. With fewer new listings and steady traveler demand, existing STR owners are seeing stronger occupancy and higher returns per property.

Revenue per available room (RevPAR) increased by 3.4% in 2024, and the trend is expected to continue as inflation eases and travel activity normalizes. Foreign visitation to the U.S. is also rebounding, with 77.1 million international travelers projected for 2025 a 6.5% Year-over-Year increase, according 

Top 10 STR markets (2025)

The following table highlights the ten strongest U.S. markets for short-term rental (STR) investment in 2025. These locations combine high cash-on-cash return (CoCR) with strong occupancy, affordable property prices, and income potential.

1. Hazel Park, Michigan

Region: Midwest

Hazel Park offers the highest CoCR (7.45%) of any U.S. market, with a median home price of just $208,955. This affordability makes it ideal for income-based financing and first-time investors seeking strong cash flow margins in Michigan.

2. Sweetwater, Florida

Region: Southeast

Sweetwater combines high income ($5,385/month) with 70% occupancy. Its proximity to Miami and steady tourism make it a reliable, high-performing Florida market.

3. Zephyrhills, Florida

Region: Southeast

Zephyrhills delivers a 7.17% CoCR and 68% occupancy, a mix of affordability and demand that appeals to foreign buyers entering Florida’s STR market.

4. Silver Springs, Nevada

Region: Mountain West

With a 7.12% CoCR and median price of $305,432, Silver Springs offers affordable entry into Nevada’s growing rental corridor, ideal for diversification beyond the Sun Belt.

5. Highland Park, Pennsylvania

Region: Northeast

Highland Park posts $4,533 in monthly STR income and a 6.97% CoCR, making this Pennsylvania getaway one of the few high-yield East Coast markets still accessible to international investors.

6. Winter Haven, Florida

Region: Southeast

Winter Haven’s 77% occupancy rate and affordability create dependable, year-round returns. For foreign nationals, it’s among the most stable Florida STR markets.

7. Visalia, California

Region: West

Visalia combines an 86% occupancy rate with a 6.91% CoCR, rare for California. Its location near Yosemite and Sequoia National Park keeps bookings consistent across seasons.

8. Cayce, South Carolina

Region: Southeast

Affordable at $303,345 with a 6.83% CoCR, Cayce’s strong migration trends and regional growth make it attractive for foreign investors seeking emerging STR markets in South Carolina.

9. River Oaks, Texas

Region: Southwest

River Oaks’ 6.78% CoCR and $307,009 median price offer a low-cost path into Texas’ expanding rental economy. 

10. El Mirage, Arizona

Region: Southwest

With a 6.07% CoCR and 51% occupancy, El Mirage is an accessible Arizona suburb benefiting from the Phoenix metro’s ongoing population surge and tourism growth.
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_{Data source: Mashvisor 2025 U.S. Short-Term Rental Market Rankings. All figures represent average market-level estimates as of Q1 2025.}

Why short-term rentals matter for real estate investors

Short-term rentals (STRs) have evolved from niche vacation homes into one of the most flexible and profitable investment strategies in U.S. real estate. Unlike traditional long-term rentals, STRs can generate higher monthly revenue, adapt to market demand, and serve as both income-producing assets and lifestyle investments.

Why STRs matter to investors

• Higher monthly revenue potential: STRs often earn more gross income than long-term rentals, especially in tourism-heavy regions or cities with strong seasonal demand.
  
  
• Dynamic pricing flexibility: Owners can adjust nightly rates based on occupancy and local events to maximize returns.
  
  
• Familiar global demand: STRs align with established tourism and travel patterns, offering predictable booking trends.
  
  
• Diversification in a stable currency: U.S. real estate provides potential long-term wealth preservation in a strong currency while enabling investors to grow portfolios remotely.
  
  

• Income-based qualification: Get approved based on property income potential, not U.S. credit or personal income as a foreigner.

DSCR loans make short-term rental financing accessible

It’s hard to lend on short-term rentals because they don’t have leases that project steady income. However, there are now more flexible products to meet the growing demand for short-term rentals. Debt-service-coverage-ratio (DSCR) loans evaluate a property’s ability to generate income rather than focusing solely on a borrower’s personal finances.

Here’s how DSCR loans make short-term rental financing accessible:

• Using future rent projections: Lenders assess a property’s potential income based on local market data rather than existing leases. This approach accounts for seasonal fluctuations and varying occupancy rates, giving investors a realistic view of cash flow potential. By modeling projected rent ranges aligned with appraisers’ estimates, DSCR loans provide a reliable path to financing even for new or unproven STR properties.
  
  
• No U.S. credit or income requirements: Borrowers don’t need a U.S. Social Security number or credit history to qualify. The focus is on the property’s income-generating ability, making these loans particularly accessible for international investors. This removes a major hurdle that traditionally kept foreign buyers from U.S. real estate financing.
  
  
• Flexible loan amounts: DSCR loans typically range from $100,000 to $1 million, accommodating both entry-level investors and those looking to scale their portfolios. Loan terms can be customized to match projected income and investor goals. This flexibility allows borrowers to acquire properties that maximize cash flow without being constrained by rigid financing limits.
  
  
• Fast closings: Transactions can be completed in as little as 30 days with Waltz. Quick closings help investors capitalize on high-demand markets before properties are sold. It also reduces the time and stress often associated with international real estate transactions.

Learn more: Short-Term Rental DSCR Loans for Foreign Nationals

Start exploring options with Waltz by your side

The 2025 short-term rental landscape rewards investors who act decisively. Whether you’re drawn to Florida’s high-occupancy markets, emerging Midwest opportunities, or the steady growth of the Southwest, each city on this list offers strong income potential and now, accessible financing.

Waltz makes investing in these markets possible for both foreign and domestic buyers. With DSCR loans based on property income, remote digital closings, and integrated LLC, EIN, and banking support, you can build your U.S. rental portfolio without ever setting foot in the country.

Start your STR investment journey with Waltz.

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