The Top 9 Airbnb Rental Arbitrage Markets in the USA

Airbnb rental arbitrage lets you build a short-term rental business without owning a short-term rental property. But location is everything. Even the best-managed listings can fall flat if demand is low or local rules get in the way.

This blog zeroes in on U.S. cities where Airbnb arbitrage isn’t just possible — it’s profitable. We’re talking strong occupancy, reliable monthly revenue and high guest interest. Whether you’re scaling your operation or just getting started, these are the markets worth your attention.

What is Rental Arbitrage?

Rental arbitrage is a real estate strategy where you lease a property on a long term lease and then re-rent it as a short-term rental on platforms like Airbnb, Vrbo or Booking.com. It’s a smart way to get started in the short-term rental industry without having to buy property.

For many aspiring hosts and real estate investors, this approach makes launching an Airbnb rental arbitrage business far more accessible. This model allows you to tap into strong rental demand and start earning Airbnb income while minimizing upfront costs like down payments or long-term mortgages.

Of course, it’s not without its challenges — but when done right, Airbnb rental arbitrage can be both profitable and scalable, especially in the best cities for Airbnb arbitrage where tourism, events or business travelers drive year-round bookings.

How do you calculate rental arbitrage profitability?

If you're considering diving into short-term rental arbitrage, you'll want to make sure the numbers work. Here’s a simple way to calculate your monthly arbitrage potential:

Monthly Rent – Average Monthly RevPAR (from the Last Twelve Months) = Monthly Arbitrage Potential

*RevPAR - Revenue per available room (RevPAR) is a metric used in the hospitality industry to measure hotel performance. It’s calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.

Where to Invest: Best U.S. Cities for Airbnb Rental Arbitrage

Choosing the right market is everything in Airbnb arbitrage. It affects your nightly rates, booking volume, occupancy, legal constraints and long-term scalability.

In the U.S., several cities stand out due to strong demand, high STR premiums and favorable regulations for Airbnb hosts. Let’s explore the top 9 cities for short term rental arbitrage in 2025.

1. Charleston, South Carolina

Charleston is a coastal gem renowned for its cobblestone streets, antebellum charm and rich Southern history. As one of the most visited cities in the U.S., Charleston attracts millions of tourists each year with its beautiful beaches, vibrant culinary scene and historic architecture.

For short-term rental investors, Charleston offers a compelling mix of high demand and premium nightly rates. With strong tourism, cultural festivals and year-round attractions, this city ensures consistent bookings and strong cash flow.

It has also been ranked as one of the best U.S. cities by Condé Nast Traveler, increasing its visibility among travelers.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $382.7

• Occupancy Rate: 61%

• Annual Revenue: $54.6K

The best neighborhoods for Airbnb arbitrage include Downtown Charleston, South of Broad and Harleston Village — known for walkability, historic charm and access to restaurants and landmarks.

2. Nashville, Tennessee

Famous as the heart of country music, Nashville offers a vibrant entertainment scene with a mix of honky-tonks, music venues, and thriving food culture. Named among Tripadvisor’s top U.S. destinations for 2025, tourists flock here year-round for music festivals, business conferences and nightlife, making it a prime spot for short-term rentals.

The city also has a diverse housing market and opportunities to scale by managing multiple properties. Its STR-friendly environment further fuels its appeal.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $363.2

• Occupancy Rate: 53%

• Annual Revenue: $42.9K

Top neighborhoods for Airbnb include Green Hills, Inglewood and Urbandale Nations, offering a mix of suburban charm and proximity to downtown attractions.

3. Austin, Texas

Austin stands out as the cultural and tech capital of Texas, blending a booming job market with a legendary live music scene and unmistakably quirky charm.

It's home to major attractions and events like South by Southwest (SXSW), Austin City Limits, Zilker Park, Barton Springs Pool and the vibrant nightlife of Sixth Street. These draw thousands of tourists, creatives and professionals throughout the year.

This constant flow of visitors, combined with a growing population and remote work-friendly lifestyle, makes Austin one of the best cities for Airbnb rental arbitrage. The city's short-term rental regulations, while requiring registration and adherence to zoning rules, are clearer and more navigable than in other major U.S. markets.

As a result, long-term lease arbitrage here remains a highly viable strategy for those looking to tap into the city’s strong Airbnb demand and year-round rental income potential.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $277.4

• Occupancy Rate: 50%

• Annual Revenue: $23.5K

Top neighborhoods include Downtown Austin, West Oak Hill and North Austin — each offering access to nightlife, business districts and events.

4. Las Vegas, Nevada

Las Vegas needs no introduction — it’s one of the most iconic tourism hotspots in the world. Known for its vibrant nightlife, casinos and entertainment, it attracts more than 40 million visitors annually.

The city is a dream for Airbnb arbitrage business operators, boasting a high market score of 87, strong occupancy rates and lucrative Average Daily Rates (ADRs). Tourists seek out affordable alternatives to hotels and many prefer staying off-strip in homes with full amenities. Real estate prices are relatively affordable, making this a cost-effective arbitrage venture.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $298.4

• Occupancy Rate: 49%

• Annual Revenue: $23.8K

Popular neighborhoods include Sun City Summerlin, Lone Mountain and North Cheyenne — offering a balance of comfort, convenience and appeal to families and groups.

5. Gatlingburg, Tennessee

Source: Gatlinburg, Tennessee

Gatlinburg is a small mountain town nestled on the edge of Great Smoky Mountains National Park. It's famous for hiking, scenic views and seasonal tourism.

This area is highly attractive to short-term rental investors due to moderate property costs and extremely high seasonal demand. Guests are often families or couples looking for cabin experiences, making larger homes especially profitable.

Short-term rental hosts in the area are required to obtain a business license and comply with local zoning laws. Additionally, properties must pass safety checks, including fire inspections, before they can be listed.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $335.3

• Occupancy Rate: 55%

• Annual Revenue: $47.5K

Best areas for investment include Chalet Village, Ober Gatlinburg and downtown Gatlinburg — each with great mountain views and proximity to tourist activities.

6. Phoenix, Arizona

Phoenix is one of the fastest-growing metropolitan areas in the U.S. With over 300 days of sunshine a year, it draws vacationers, snowbirds and digital nomads alike.

For investors, Phoenix offers a healthy mix of tourism and corporate travel. With a lower cost of living compared to other Sun Belt cities, it's also easier to cover expenses like first month’s rent and security deposit, lowering the barrier to entry.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $216.3

• Occupancy Rate: 53%

• Annual Revenue: $19.6K

Top neighborhoods include Downtown Phoenix, Arcadia and Roosevelt Row — trendy and central for both business and leisure guests.

7. Orlando, Florida

Home to Walt Disney World and Universal Studios, Orlando is one of the most visited cities in the U.S., drawing families year-round.

This makes Orlando a top contender for Airbnb rental arbitrage. Family-sized homes with pools or resort-style amenities are especially profitable. Orlando also supports a strong infrastructure for tourism, including cleaning services and property management.

Orlando’s vacation rental regulations require hosts to register with the city and comply with local zoning laws. In Orange County, STRs are typically allowed only in specific areas and non-owner-occupied properties may be restricted. Airbnb hosts must also meet safety, insurance and occupancy requirements.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $243.3

• Occupancy Rate: 51%

• Annual Revenue: $21.5K

Neighborhoods to consider include Kissimmee, Celebration and Lake Buena Vista — close to theme parks and family attractions.

8. Joshua Tree, California

Joshua Tree is a high desert destination known for its national park, unique rock formations and bohemian culture. It's especially popular among millennials and Gen Z travelers.

It’s a hot spot for Instagrammable stays and unique Airbnb listing designs. Many hosts generate passive income by offering tiny homes, domes and off-grid experiences. High ADRs and low property taxes sweeten the deal.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $337.6

• Occupancy Rate: 51%

• Annual Revenue: $45.2K

Top neighborhoods include Joshua Tree Village, Panorama Heights and Friendly Hills — quiet, scenic and close to the park entrance.

9. Blue Ridge, Georgia

Blue Ridge is a picturesque mountain town in North Georgia, famous for its scenic railway, waterfalls and cabin retreats. It's ideal for weekend getaways, particularly for travelers from Atlanta.

Its appeal lies in low upfront costs, high ADRs and consistent demand for cozy, rustic accommodations. Cabins with hot tubs, fireplaces and views are top earners, making it a strong candidate for vacation rentals and Airbnb arbitrage projects.

Rental arbitrage market potential (AirDNA stats):

• Average Daily Rate: $338.7

• Occupancy Rate: 49%

• Annual Revenue: $41.5K

Short-term rental local regulations in Blue Ridge require hosts to obtain a business license and comply with Fannin County ordinances, which may include zoning restrictions, safety inspections and occupancy limits, particularly for non-owner-occupied properties.

Best investment areas include Aska Adventure Area, Cherry Log and Downtown Blue Ridge — popular for hiking, fishing and boutique shopping.

Airbnb Arbitrage, Simplified: 4 Tips That Work

Starting and scaling an Airbnb rental arbitrage business involves more than listing a furnished space. The most successful short-term rental investors treat it like a full-fledged operation — balancing smart market research, professional partnerships, sound finances and efficient systems.

Whether you’re operating in San Diego, South Carolina or Las Vegas, these four pillars are essential to building a successful Airbnb arbitrage venture in today’s competitive short-term rental market.

1. Choose your Airbnb market wisely

Success begins with selecting the right market and neighborhood. Not every city supports rental arbitrage, especially in areas with restrictive local regulations.

Some cities require a business license, impose legal fees, limit occupancy rates or prohibit short-term rentals entirely. That’s why it's crucial to use tools like AirDNA or PriceLabs to analyze average daily rates, monthly rent, short-term rental performance and the STR premium (the difference between short- and long-term income).

Focus on the best cities for Airbnb arbitrage — places with high rental demand, strong tourism, steady streams of business travelers and supportive laws. Popular short-term rental destinations often offer high cash flow and make it easier to find the right property.

Whether you're looking for vacation rentals or urban apartments, these top markets tend to deliver better ROI and more consistent Airbnb income.

2. Secure landlord approval with confidence

Convincing property owners to lease you their space for Airbnb arbitrage is one of the most critical steps in launching your Airbnb rental arbitrage business. Some landlords worry about problematic tenants, damages or neighborhood complaints. To win their trust, clearly outline your Airbnb arbitrage business plan and explain how you’ll protect their investment.

Use screening tools that automatically screen problematic tenants and offer cleaning services, higher rent and liability insurance. Propose a detailed lease that includes house rules, clear expectations and a commitment to professional management.

When done right, convincing landlords/property owners turns them into long-term partners in your growing Airbnb arbitrage project.

3. Prepare for upfront and ongoing costs

Although rental arbitrage eliminates the need to buy a home, it still comes with significant starting costs.

Be ready to pay first month’s rent, a security deposit and cover furnishing, Wi-Fi, decor and cleaning fees. Include costs for professional photos and other Airbnb listing essentials that influence guest bookings.

You’ll also need to factor in legal fees, licensing, insurance and reserves for slow periods. Depending on the market, your upfront costs may range from $5,000 to $50,000. That said, a smart investment in top short-term rental markets can yield high average annual revenue and quickly create consistent cash flow.

4. Automate your operations early

As your short-term rental business grows, managing multiple properties manually becomes a burden. Automation tools can help you scale efficiently by handling everything from direct bookings to guest communication.

Use all-in-one vacation rental software and Airbnb management system like Hostaway to sync calendars, automate messages, optimize pricing based on market dynamics and more.

Set up reliable cleaning services with auto-scheduling and smart locks for seamless check-ins. Automation gives you time to focus on finding new arbitrage properties, maintaining high Airbnb listing quality and expanding your portfolio in the short-term rental industry.

The more streamlined your systems, the easier it becomes to build sustainable Airbnb investments that continually generate income.

Roadmap to Profitable Airbnb Arbitrage

Airbnb rental arbitrage presents one of the most accessible and scalable paths into the Airbnb business, especially for those who want to start generating income without owning property. By strategically selecting the right city, understanding local regulations and managing your properties with a business mindset, you can turn a single lease into a steady source of cash flow.

Whether you're just exploring your first property lease for Airbnb or looking to expand into multiple markets, the key to success lies in preparation, automation and adaptability. From bustling cultural hubs like Austin and Nashville to scenic getaways like Gatlinburg and Blue Ridge, the opportunities are abundant for hosts who are ready to put in the work.

With a great listing in a thriving rental market and a strong operational system in place — you’re well-positioned to launch a profitable Airbnb arbitrage business and tap into the growing demand for unique, flexible and well-managed short-term rental experiences.