Looking to build wealth in real estate? Discover the best states to buy investment property in 2025 for maximum returns and long-term success.
In this article, we listed the best US states for investing in long-term rental properties and the best US states for investing in short-term rental properties. As you will see, very different locations are optimal for the two rental strategies, as success depends on a different set of factors.
- 10 Best States to Buy Investment Property for Long-Term Rentals
- 10 Best States to Buy Investment Property for Short-Term Rentals
Finding the top states for investing in rental properties is the first step in locating the best market and houses for investment. Thus, we at Mashvisor conducted a nationwide real estate market analysis to rank the best US states to buy long-term and short-term rentals in the coming year.
We considered several different aspects that affect ROI in real estate. However, we focused primarily on the cash-on-cash return as the most comprehensive measure of profitability in the industry.
So, in brief, the top 10 states to buy a long-term rental in 2025 are:
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Meanwhile, the top 10 states to invest in short-term rentals are:
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In addition, we’ll list the five best cities for each rental strategy in each of the ranked states. We’ll also show you how to use Mashvisor to find top-performing rental properties for sale in the said locations.
10 Best States to Buy Investment Property for Long-Term Rentals
First, we take a look at the top states in the US housing market for long-term rental properties, also known as traditional rentals. It implies renting out on a monthly or annual basis.
The main benefits of the said rental strategy include lower vacancy, more stability, and few rental laws in the majority of states across the US. On the flip side, long-term rentals usually bring lower rental income and return on investment than their short term counterparts.
Nevertheless, if you perform careful real estate market analysis, you can find very profitable opportunities within this strategy.
Long-Term Rental Market Trends in 2025
Before we look at the top states for buying long-term rental property, it’s worth considering whether such a strategy will be a good investment in 2025.
The most important real estate trends related to long-term rentals experts predicted for next year include the following:
- The average rental rate is expected to continue going up, boosting ROI.
- The total number of completed apartments is anticipated to fall by 20%, driven by the lingering effects of high interest rates and softening rent growth.
- Demand for both single-family and multifamily rental properties will remain strong due to younger adults and seniors forming households.
- Rental affordability issues are expected to continue, with many renters spending a significant portion of their income on housing.
- Renters are moving less frequently. A significant percentage have indicated plans to stay in their current residences, driven by the disparity between current rents and new market rates.
These trends suggest that 2025 is forecast to be a tightening rental market due to rising costs and sustained demand amid affordability challenges.
Data and Ranking
Next, let’s take a quick look at the real estate data and methodology we used in our ranking of the best states for long-term and short-term rentals. We collected national real estate and long-term and short-term rental data from reliable sources like the MLS, Redfin, RentJungle, Airbnb, and public records.
Then, we applied our AI technology-based machine-learning algorithms to analyze the data and extract the most promising markets for each strategy. We selected markets with over 100 active rental listings for the respective rental strategy. Also, we chose the ones with a median property price below $1,000,000 to ensure affordability for investors.
As a leading metric of return on investment, we focused on the cash-on-cash return as it shows the potential of markets and properties in the most comprehensive manner.
So, without further ado, let’s take a look at the 10 best states for long-term rental property investments in 2025. The list is sorted from the highest to the lowest cash-on-cash return and is based on Mashvisor’s latest location report:
1. Indiana
- Median Property Price: $401,967
- Average Price per Square Foot: $191
- Days on Market: 80
- Number of Long-Term Rental Comps: 3,225
- Monthly Long-Term Rental Income: $2,413
- Long-Term Rental Cash-on-Cash Return: 5.56%
- Long-Term Rental Cap Rate: 5.66%
- Price-to-Rent Ratio: 14
- Walk Score: 44
Indiana ranks number one on our list thanks to the state’s strong economic foundation, job growth, and growing rental demand. Indiana boasts a diverse and robust job market, low unemployment rates, and steady population growth, all of which contribute to consistent rental income.
With affordable home prices and low property taxes, you can acquire properties at competitive rates. Additionally, urban revitalization efforts in areas like Indianapolis present opportunities for property appreciation.
Top 5 Cities for Long-Term Rentals in the State of Indiana in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Fort Wayne | $2,460 | 6.28% |
| 2 | Indianapolis | $2,166 | 5.42% |
| 3 | Bloomington | $2,357 | 4.37% |
| 4 | Westfield | $2,902 | 4.25% |
| 5 | Fishers | $2,959 | 4.19% |
2. Kentucky
- Median Property Price: $389,562
- Average Price per Square Foot: $201
- Days on Market: 97
- Number of Long-Term Rental Comps: 2,852
- Monthly Long-Term Rental Income: $2,254
- Long-Term Rental Cash-on-Cash Return: 5.10%
- Long-Term Rental Cap Rate: 5.19%
- Price-to-Rent Ratio: 14
- Walk Score: 41
The affordable housing shortage in Kentucky presents a compelling opportunity for long-term rental investors. With a current gap of over 206,000 units—projected to grow to 287,000 by 2029—the demand for rental properties is surging.
Being the fifth most affordable housing market in the US, tenant interest in Kentucky remains steady. Plus its stable economy, coupled with incentives like tax breaks for developers addressing the housing shortfall, enhances investment appeal. Additionally, property values are expected to appreciate by 5.5% by next year.
By investing in a long-term rental property in Kentucky, you can address a critical housing need while benefiting from economic growth and long-term returns.
Top 5 Cities for Long-Term Rentals in the State of Kentucky in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Louisville | $2,186 | 4.96% |
| 2 | Elizabethtown | $2,414 | 4.89% |
| 3 | Bowling Green | $2,221 | 4.58% |
| 4 | Frankfort | $2,205 | 4.41% |
| 5 | Georgetown | $2,295 | 4.28% |
3. Oklahoma
- Median Property Price: $428,472
- Average Price per Square Foot: $196
- Days on Market: 90
- Number of Long-Term Rental Comps: 2,738
- Monthly Long-Term Rental Income: $2,355
- Long-Term Rental Cash-on-Cash Return: 5.08%
- Long-Term Rental Cap Rate: 5.17%
- Price-to-Rent Ratio: 15
- Walk Score: 43
Robust job growth and favorable demographic trends are making Oklahoma a promising location for long-term rental investment in 2025. The state’s diverse industries—energy, healthcare, and technology—fuel consistent employment expansion, boosting demand for rental properties.
With population growth projected to rise by 14% next year, cities like Oklahoma City and Tulsa are experiencing increased urbanization.
The rental market is projected to remain competitive thanks to rising home prices and low vacancy rates.
Lastly, Oklahoma’s affordable cost of living, paired with job-driven revitalization in areas like Midtown Tulsa, is enhancing the state’s appeal to investors.
Top 5 Cities for Long-Term Rentals in the State of Oklahoma in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Tulsa | $2,461 | 5.42% |
| 2 | Oklahoma City | $2,319 | 5.27% |
| 3 | Broken Arrow | $2,599 | 5.25% |
| 4 | Yukon | $2,258 | 5.01% |
| 5 | Norman | $2,262 | 4.60% |
4. Louisiana
- Median Property Price: $432,271
- Average Price per Square Foot: $192
- Days on Market: 118
- Number of Long-Term Rental Comps: 5,652
- Monthly Long-Term Rental Income: $2,296
- Long-Term Rental Cash-on-Cash Return: 5.07%
- Long-Term Rental Cap Rate: 5.16%
- Price-to-Rent Ratio: 16
- Walk Score: 45
Investing in long-term rentals in Louisiana for 2025 offers great potential, driven by economic growth, rising rental demand, and favorable market conditions.
Cities like Baton Rouge and New Orleans are experiencing job growth, particularly in healthcare, education, and manufacturing, which is attracting renters. Plus, an affordable housing shortage and steady student demand are further bolstering the rental market.
With a median property price of $432,271 and monthly rental income of $2,296, you can achieve solid returns.
Top 5 Cities for Long-Term Rentals in the State of Louisiana in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Hammond | $2,306 | 5.94% |
| 2 | Slidell | $2,354 | 5.74% |
| 3 | Lafayette | $2,346 | 5.44% |
| 4 | Baton Rouge | $2,320 | 5.17% |
| 5 | Covington | $2,626 | 4.69% |
5. Arkansas
- Median Property Price: $461,821
- Average Price per Square Foot: $217
- Days on Market: 95
- Number of Long-Term Rental Comps: 6,018
- Monthly Long-Term Rental Income: $2,227
- Long-Term Rental Cash-on-Cash Return: 4.70%
- Long-Term Rental Cap Rate: 4.79%
- Price-to-Rent Ratio: 17
- Walk Score: 39
Thanks to job growth, affordability, and strong rental demand, Arkansas is a promising location for long-term rental investment in 2025. The state added 11,100 non-farm jobs from June 2023 to June 2024, which boosted housing demand, while its low unemployment rate of 3.4% has enhanced economic stability. And since it’s ranked fifth in housing affordability, Arkansas attracts renters and offers solid returns for investors, with the median rental income at $2,227 monthly.
Top 5 Cities for Long-Term Rentals in the State of Arkansas in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | North Little Rock | $2,097 | 5.79% |
| 2 | Fort Smith | $2,246 | 5.26% |
| 3 | Benton | $2,187 | 5.16% |
| 4 | Conway | $2,224 | 5.11% |
| 5 | Siloam Springs | $2,049 | 4.58% |
6. Alabama
- Median Property Price: $469,214
- Average Price per Square Foot: $351
- Days on Market: 110
- Number of Long-Term Rental Comps: 5,663
- Monthly Long-Term Rental Income: $2,346
- Long-Term Rental Cash-on-Cash Return: 4.69%
- Long-Term Rental Cap Rate: 4.77%
- Price-to-Rent Ratio: 17
- Walk Score: 44
Alabama’s thriving economy and consistent job growth make it a promising market for long-term rental investments in 2025. As of July of this year, the state had 127,000 job openings, with industries like technology, aerospace, and manufacturing driving growth. And with median home prices at $469,214 that offer a 4.69% cash-on-cash return, investors can get a property with strong cash flow potential.
Top 5 Cities for Long-Term Rentals in the State of Alabama in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Montgomery | $2,279 | 6.06% |
| 2 | Dothan | $2,577 | 5.68% |
| 3 | Prattville | $2,164 | 5.64% |
| 4 | Troy | $2,013 | 5.63% |
| 5 | Mobile | $2,240 | 4.95% |
7. Michigan
- Median Property Price: $458,041
- Average Price per Square Foot: $251
- Days on Market: 86
- Number of Long-Term Rental Comps: 8,001
- Monthly Long-Term Rental Income: $2,478
- Long-Term Rental Cash-on-Cash Return: 4.69%
- Long-Term Rental Cap Rate: 4.78%
- Price-to-Rent Ratio: 15
- Walk Score: 49
Rising home prices and a shortage of affordable housing are driving increased demand for rentals, particularly in areas like Detroit. The median long-term rental income in the state grew by 19% from last year. With the low vacancy rate of 6%, we expect the rent prices to grow by at least 3% in 2025, ensuring stable cash flow for landlords.
Michigan’s diverse economy and migration trends are also boosting rental demand. While property taxes are expected to rise by 3.3% next year, this only means that property values are increasing, which supports long-term buy-and-hold investment strategies.
Top 5 Cities for Long-Term Rentals in the State of Michigan in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Warren | $1,974 | 6.30% |
| 2 | Detroit | $2,085 | 6.10% |
| 3 | Dearborn Heights | $1,969 | 5.94% |
| 4 | Dearborn | $2,292 | 4.73% |
| 5 | Ypsilanti | $2,286 | 4.73% |
8. Pennsylvania
- Median Property Price: $499,875
- Average Price per Square Foot: $483
- Days on Market: 88
- Number of Long-Term Rental Comps: 27,412
- Monthly Long-Term Rental Income: $2,506
- Long-Term Rental Cash-on-Cash Return: 4.30%
- Long-Term Rental Cap Rate: 4.38%
- Price-to-Rent Ratio: 17
- Walk Score: 50
Pennsylvania’s long-term rental market in 2025 offers a winning combination of affordability, demand, and tax advantages.
First, the state’s strong job market—led by sectors like healthcare and tech—has been attracting steady housing demand. With median home prices as low as $148,000 in some areas, you can find affordable properties with significant rental potential.
Meanwhile, low vacancy rates and competitive rents of about $2,506 per month ensure reliable income streams. Plus, long-term appreciation can provide immediate cash flow and growing equity.
Tax advantages are a major perk in Pennsylvania, as well. Here, property taxes are deductible, which helps reduce overall costs. Additional deductions, like depreciation and maintenance expenses, can also enhance your profitability.
Lastly, younger renters are flocking to revitalized neighborhoods. With all of these factors plus solid market fundamentals, Pennsylvania offers a promising opportunity for stable, long-term returns.
Top 5 Cities for Long-Term Rentals in the State of Pennsylvania in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Johnstown | $2,349 | 7.07% |
| 2 | Scranton | $2,134 | 6.55% |
| 3 | Harrisburg | $2,539 | 5.48% |
| 4 | Tobyhanna | $2,604 | 5.44% |
| 5 | Chambersburg | $2,384 | 5.09% |
9. Maryland
- Median Property Price: $557,620
- Average Price per Square Foot: $261
- Days on Market: 73
- Number of Long-Term Rental Comps: 13,765
- Monthly Long-Term Rental Income: $2,822
- Long-Term Rental Cash-on-Cash Return: 4.29%
- Long-Term Rental Cap Rate: 4.36%
- Price-to-Rent Ratio: 16
- Walk Score: 50
Maryland is an exciting location for long-term rental investment next year because of several factors. Millennials and Gen Z renters, especially in urban areas like Baltimore, are driving up rental demand. Maryland also boasts gross rental yields 28.4% higher than the national average.
With a strong economy, job growth, and expanding infrastructure, more people are moving to Maryland. Maryland’s real estate market remains stable, as homes continue to appreciate and tenant turnover stays low.
If you’re wondering about property taxes, the state’s rates are manageable, such as Baltimore’s $2.248 per $100 of assessed value. You can even further reduce costs by taking advantage of state programs like the Homestead Tax Credit.
Top 5 Cities for Long-Term Rentals in the State of Maryland in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Baltimore | $2,374 | 5.50% |
| 2 | Hagerstown | $2,347 | 5.02% |
| 3 | Owings Mills | $2,803 | 4.90% |
| 4 | California | $2,338 | 4.80% |
| 5 | Bel Air | $2,922 | 4.79% |
10. Tennessee
- Median Property Price: $517,277
- Average Price per Square Foot: $534
- Days on Market: 98
- Number of Long-Term Rental Comps: 2,934
- Monthly Long-Term Rental Income: $2,331
- Long-Term Rental Cash-on-Cash Return: 4.15%
- Long-Term Rental Cap Rate: 4.21%
- Price-to-Rent Ratio: 18
- Walk Score: 45
Tennessee’s booming economy, driven by industries like healthcare and technology, has kept unemployment low and attracted new residents, fueling the rental market. Many areas will also benefit from low vacancy rates (around 4%) and rising rents as more people choose renting over buying.
The state also stands out for its favorable property taxes, which are based on home value. While home values in major counties may rise by 15% to 50% during 2025 reassessments, Tennessee’s revenue-neutral policy may still lower overall tax rates.
Lastly, you can expect solid returns in Tennessee, with areas like Johnson City and Memphis offering monthly rental incomes of over $2,200 and cash-on-cash returns around 4.8%.
Top 5 Cities for Long-Term Rentals in Tennessee in 2025
| Ranking | City | Monthly Long-Term Rental Income | Long-Term Rental Cash on Cash Return |
| 1 | Johnson City | $2,242 | 4.80% |
| 2 | Memphis | $2,237 | 4.80% |
| 3 | Chattanooga | $2,186 | 3.63% |
| 4 | Knoxville | $2,349 | 3.53% |
| 5 | Collierville | $3,111 | 3.27% |
To start searching for profitable long term rental properties for sale in any of these states for 2025, click here.
10 Best States to Buy Investment Property for Short-Term Rentals
Next, we’ll have a look at the top states for buying a short term rental property in 2025. These rentals are also referred to as vacation rentals or Airbnb rentals.
While long-term rentals offer important benefits, as outlined above, the most significant advantage of short-term rentals is that they generally come with a higher return on investment. This is driven by the fact that they are rented out on a daily basis, so rental rates tend to be higher.
Another benefit is that investors can use them as a second home, spending holidays and vacations there instead of in hotels. This also implies some vacation rental tax advantages.
Nevertheless, vacation rentals come with some drawbacks, too. They are a riskier investment strategy as vacancies can be high. Moreover, there is more active work as well as more costs involved in starting an Airbnb business. This originates from the need to furnish your investment property and cover all utilities, amenities, restocking, and cleaning between guests.
Short-Term Rental Market Trends in 2025
Before ranking the top states to buy short-term rental property to rent out on a short term basis in the coming year, it’s worth investigating whether such a decision is at all worth it in the US market.
In 2025, the short-term rental market in the US is expected to experience several significant trends:
- The short-term rental market is projected to see a demand growth of approximately 6.8%, driven by improved economic conditions and a shift in consumer preferences.
- However, supply growth is anticipated to slow down due to high mortgage rates and a housing shortage. This may lead to a tighter market where demand may outpace supply.
- After years of decline, occupancy rates are expected to stabilize and begin to rise slightly, reflecting a recovery in travel and tourism as economic uncertainties diminish.
- The average daily rates are forecasted to increase modestly by about 2.1%, as hosts adjust their pricing strategies in response to the evolving market dynamics and increased demand.
- Revenue per available room is expected to improve as occupancy rates increase alongside rising average daily rates.
- There will be a growing emphasis on experience-based stays, with travelers seeking accommodations that offer local experiences and unique amenities beyond just a place to sleep.
- The trend towards mid-term rentals (one to six months) will continue, driven by remote work flexibility and the desire for longer stays without the commitment of traditional leases.
- Eco-friendly rentals will gain traction as more travelers prioritize sustainability.
- More hosts will adopt dynamic pricing technology and vacation rental management software to remain competitive in an increasingly crowded market.
Now, here are the top states to focus on in your short-term rental property search in 2025, ranked from the highest to the lowest cash-on-cash return, based on Mashvisor’s latest location report:
1. Kentucky
- Median Property Price: $389,562
- Average Price per Square Foot: $201
- Days on Market: 97
- Number of Short-Term Rental Comps: 8,366
- Monthly Short-Term Rental Income: $2,863
- Short-Term Rental Cash-on-Cash Return: 5.03%
- Short-Term Rental Cap Rate: 5.12%
- Short-Term Rental Daily Rate: $185
- Short-Term Rental Occupancy Rate: 55%
- Walk Score: 41
Investing in vacation rentals in Kentucky in 2025 offers a fantastic opportunity, thanks to favorable property taxes and a thriving short-term rental market.
The state’s property tax rate dropped to 11.4 cents per $100 of assessed value in July 2023—a third consecutive reduction in the last few years. This decrease should help enhance your cash flow, making it easier to reinvest your profits.
With an average monthly income of $2,863, short-term rentals in Kentucky boast a 5.03% cash-on-cash return and a 5.12% cap rate. The state’s diverse attractions, from natural parks to cultural landmarks, drive high occupancy rates, which ensures a steady income.
Top 5 Cities for Short-Term Rentals in the State of Kentucky in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Campton | $3,494 | 6.87% |
| 2 | Frankfort | $3,710 | 6.68% |
| 3 | Bowling Green | $3,189 | 5.56% |
| 4 | Stanton | $3,143 | 5.42% |
| 5 | Paducah | $2,646 | 5.37% |
2. Alabama
- Median Property Price: $469,214
- Average Price per Square Foot: $351
- Days on Market: 110
- Number of Short-Term Rental Comps: 12,648
- Monthly Short-Term Rental Income: $3,182
- Short-Term Rental Cash-on-Cash Return: 5.00%
- Short-Term Rental Cap Rate: 5.08%
- Short-Term Rental Daily Rate: $194
- Short-Term Rental Occupancy Rate: 54%
- Walk Score: 44
With scenic destinations like Gulf Shores and Orange Beach, a growing economy, and investor-friendly regulations, Alabama stands out as a prime market for vacation rental investing.
The state’s tourism is thriving, attracting millions of visitors annually and boosting the need for vacation rentals. And with affordable home prices—going around $469,000 with a 5.08% cap rate—new investors will be able to start their journey here. Alabama’s strong economy and low property taxes further enhance profitability.
Investor-friendly regulations will simplify your operations, while median daily rates of $194 and occupancy rates of around 54% promise solid returns. If you partner with an experienced real estate agent or use a platform like Mashvisor, you can get insights into top-performing neighborhoods and regulatory compliance.
Top 5 Cities for Short-Term Rentals in the State of Alabama in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Sedro Woolley | $4,898 | 5.81% |
| 2 | Montgomery | $2,788 | 5.80% |
| 3 | Madison | $3,874 | 5.44% |
| 4 | Altoona | $2,979 | 5.42% |
| 5 | Birmingham | $2,996 | 5.38% |
3. Indiana
- Median Property Price: $401,967
- Average Price per Square Foot: $191
- Days on Market: 80
- Number of Short-Term Rental Comps: 7,883
- Monthly Short-Term Rental Income: $2,812
- Short-Term Rental Cash-on-Cash Return: 4.85%
- Short-Term Rental Cap Rate: 4.94%
- Short-Term Rental Daily Rate: $161
- Short-Term Rental Occupancy Rate: 54%
- Walk Score: 44
Indiana offers a promising market for vacation rental investments in 2025, thanks to affordable housing, strong income potential, and urban revitalization projects.
With a median daily rate of $161 and occupancy rates around 54%, short-term rentals provide solid ROI, especially in prime areas. You can also enjoy personal use of your vacation home during off-peak seasons. Meanwhile, urban revitalization is driving up home values, so partnering with a knowledgeable real estate agent can help you navigate the market and its regulations seamlessly.
Top 5 Cities for Short-Term Rentals in the State of Indiana in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Nashville | $5,884 | 7.44% |
| 2 | Beech Grove | $2,649 | 6.99% |
| 3 | Jeffersonville | $3,337 | 6.43% |
| 4 | Clarksville | $2,551 | 5.83% |
| 5 | New Albany | $2,429 | 5.77% |
4. Louisiana
- Median Property Price: $432,271
- Average Price per Square Foot: $192
- Days on Market: 118
- Number of Short-Term Rental Comps: 6,869
- Monthly Short-Term Rental Income: $2,789
- Short-Term Rental Cash-on-Cash Return: 4.75%
- Short-Term Rental Cap Rate: 4.84%
- Short-Term Rental Daily Rate: $208
- Short-Term Rental Occupancy Rate: 54%
- Walk Score: 45
Louisiana’s thriving tourism industry attracts millions of visitors every year, creating high demand for vacation homes in prime locations. And despite rising home prices, Louisiana remains relatively affordable with a median price of $432,271, and those in desirable areas are expected to appreciate over time. You can also benefit from tax deductions on expenses like maintenance, mortgage interest, and property management fees, boosting your profitability.
Owning a vacation rental in Louisiana offers flexibility—you’d have both an income-generating asset and a personal retreat. Additionally, suburban areas around New Orleans and Baton Rouge are growing in popularity for short-term stays. To navigate this effectively, partnering with an experienced real estate agent or using a platform like Mashvisor can give you valuable insights and help you craft a tailored investment strategy to ensure long-term success.
Top 5 Cities for Short-Term Rentals in the State of Louisiana in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Harvey | $3,854 | 6.79% |
| 2 | Chalmette | $2,656 | 6.57% |
| 3 | Marrero | $3,339 | 6.47% |
| 4 | Gretna | $3,679 | 6.31% |
| 5 | Jefferson | $3,433 | 6.07% |
5. Alaska
- Median Property Price: $468,923
- Average Price per Square Foot: $247
- Days on Market: 100
- Number of Short-Term Rental Comps: 4,951
- Monthly Short-Term Rental Income: $3,508
- Short-Term Rental Cash-on-Cash Return: 4.69%
- Short-Term Rental Cap Rate: 4.76%
- Short-Term Rental Daily Rate: $186
- Short-Term Rental Occupancy Rate: 61%
- Walk Score: 35
Alaska’s stunning landscapes attract millions of tourists annually, making rentals popular in hotspots like Anchorage, Juneau, and Fairbanks. Remote work has also been boosting midterm rental opportunities, which offer higher returns than short-term rental.
With no state income tax and potential deductions for maintenance and improvements, you can maximize your rental’s profitability. If you follow the correct seasonal pricing strategy, you can further optimize your returns.
Location is also important when owning rental property in Alaska. Vacation homes near natural attractions are highly marketable, and using platforms like Airbnb simplifies reaching potential guests.
If you want to invest in a vacation rental in Alaska, consider using Mashvisor or hiring a real estate agent who specializes in vacation homes. They provide crucial insights on local laws, market trends, and rental management connections to help your operations run smoothly.
Top 5 Cities for Short-Term Rentals in the State of Alaska in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Juneau | $5,363 | 5.44% |
| 2 | North Pole | $3,283 | 5.22% |
| 3 | Fairbanks | $3,339 | 5.19% |
| 4 | Anchorage | $3,930 | 4.43% |
| 5 | Wasilla | $3,708 | 4.01% |
6. Maryland
- Median Property Price: $557,620
- Average Price per Square Foot: $261
- Days on Market: 73
- Number of Short-Term Rental Comps: 9,647
- Monthly Short-Term Rental Income: $3,710
- Short-Term Rental Cash-on-Cash Return: 4.67%
- Short-Term Rental Cap Rate: 4.73%
- Short-Term Rental Daily Rate: $171
- Short-Term Rental Occupancy Rate: 59%
- Walk Score: 50
Investing in vacation rentals in Maryland in 2025 offers strong opportunities due to economic stability, high rental yields, and diverse vacation destinations.
Hotspots like Ocean City, Deep Creek Lake, and the Chesapeake Bay attract families, outdoor enthusiasts, and leisure travelers year-round, which means your occupancy rates will remain consistent.
Thanks to remote work, short-term rentals have become increasingly popular. Tenants are seeking places where they can balance work and fun.
Lastly, beyond financial returns, Maryland’s proximity to major cities, natural beauty, and recreational activities enhance its lifestyle appeal.
Top 5 Cities for Short-Term Rentals in the State of Maryland in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Dundalk | $3,340 | 7.10% |
| 2 | Temple Hills | $4,378 | 7.01% |
| 3 | Landover | $3,793 | 7.00% |
| 4 | Capitol Heights | $4,230 | 6.97% |
| 5 | Cheverly | $5,764 | 6.81% |
7. Virginia
Humpback Rock, VA. Photo by Nathaniel Villaire on Unsplash
- Median Property Price: $625,566
- Average Price per Square Foot: $346
- Days on Market: 80
- Number of Short-Term Rental Comps: 14,182
- Monthly Short-Term Rental Income: $3,621
- Short-Term Rental Cash-on-Cash Return: 4.56%
- Short-Term Rental Cap Rate: 4.62%
- Short-Term Rental Daily Rate: $200
- Short-Term Rental Occupancy Rate: 59%
- Walk Score: 49
With diverse attractions like Williamsburg, Shenandoah National Park, and Virginia Beach, the state of Virginia draws visitors year-round. Tourism numbers continue to rise, fueling the need for vacation rentals.
Compared to other markets in the East Coast, the state provides more affordable entry points for investors, while home appreciation rates often exceed the national average.
Virginia also has favorable regulations that offer flexibility to vacation rental owners. Additionally, popular tourist destinations report their short-term rental occupancy rates meet or even surpass the national average, ensuring reliable rental income.
Lastly, seasonal tourism peaks further allow you to maximize earnings during high-demand periods while maintaining steady occupancy during off-peak months.
Top 5 Cities for Short-Term Rentals in the State of Virginia in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Hampton | $3,266 | 6.70% |
| 2 | Colonial Beach | $3,658 | 6.57% |
| 3 | Chesapeake | $3,877 | 6.05% |
| 4 | Portsmouth | $2,785 | 5.85% |
| 5 | Virginia Beach | $4,386 | 5.63% |
8. South Carolina
Charleston, South Carolina. Photo by Omri D. Cohen on Unsplash
- Median Property Price: $527,638
- Average Price per Square Foot: $220
- Days on Market: 100
- Number of Short-Term Rental Comps: 21,263
- Monthly Short-Term Rental Income: $3,427
- Short-Term Rental Cash-on-Cash Return: 4.53%
- Short-Term Rental Cap Rate: 4.60%
- Short-Term Rental Daily Rate: $247
- Short-Term Rental Occupancy Rate: 57%
- Walk Score: 44
Investing in vacation rentals in South Carolina offers exciting opportunities. With a thriving tourism industry, economic growth, and favorable tax policies, the state provides an ideal environment for profitable investments.
Popular destinations like Myrtle Beach, Charleston, and Hilton Head Island attract millions of visitors annually, ensuring high occupancy rates and consistent rental income.
Beyond tourism, South Carolina’s relatively affordable home prices (around $527,638 as of December 2024) and growing job market add to its investment appeal.
Additionally, the state’s income tax system allows investors to benefit from deductions on expenses such as vacation rental management and maintenance. Generally low property tax rates help maximize returns, too. Of course, tax rates can vary by locality, so make sure to do your due diligence.
Top 5 Cities for Short-Term Rentals in the State of South Carolina in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Galivants Ferry | $3,917 | 8.36% |
| 2 | Aynor | $3,874 | 7.94% |
| 3 | Mullins | $3,554 | 7.54% |
| 4 | Walterboro | $4,550 | 6.59% |
| 5 | Cayce | $2,705 | 6.51% |
9. Illinois
- Median Property Price: $475,948
- Average Price per Square Foot: $319
- Days on Market: 67
- Number of Short-Term Rental Comps: 10,127
- Monthly Short-Term Rental Income: $3,712
- Short-Term Rental Cash-on-Cash Return: 4.45%
- Short-Term Rental Cap Rate: 4.53%
- Short-Term Rental Daily Rate: $185
- Short-Term Rental Occupancy Rate: 65%
- Walk Score: 50
Illinois, especially Chicago, is a vibrant hub known for its rich cultural diversity, world-class museums, renowned theaters, and exceptional culinary scene. These attractions make it a top destination for tourists and vacationers, driving consistent need for short-term accommodations and booting occupancy rates for vacation rentals.
Additionally, Illinois has experienced steady growth in tourism, with visitors drawn to its historical landmarks and scenic natural parks. This upward trend creates a strong foundation for sustainable rental income.
Owning rental property in tourist-friendly areas not only generates steady cash flow but also offers the potential for long-term asset appreciation. Over time, home values in desirable locations tend to rise, increasing your equity and offering a profitable exit strategy should you decide to sell.
Top 5 Cities for Short-Term Rentals in the State of Illinois in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Broadview | $3,358 | 7.34% |
| 2 | Bellwood | $3,428 | 6.92% |
| 3 | Cicero | $4,089 | 6.73% |
| 4 | Northlake | $3,455 | 6.67% |
| 5 | Westchester | $3,804 | 6.48% |
10. Michigan
Lake Superior, MI. Photo by Max Bender on Unsplash
- Median Property Price: $458,041
- Average Price per Square Foot: $251
- Days on Market: 86
- Number of Short-Term Rental Comps: 17,466
- Monthly Short-Term Rental Income: $3,087
- Short-Term Rental Cash-on-Cash Return: 4.44%
- Short-Term Rental Cap Rate: 4.52%
- Short-Term Rental Daily Rate: $217
- Short-Term Rental Occupancy Rate: 52%
- Walk Score: 49
Investing in vacation rentals in Michigan in 2025 offers a promising opportunity for real estate investors. Popular vacation spots like Traverse City and Harbor Country continue to attract visitors, particularly from nearby metro areas like Chicago, fueling strong appetite for short-term and midterm rentals. This appetite, coupled with Michigan’s limited housing inventory, creates a competitive market where home values are expected to appreciate steadily 3-5% annually.
Meanwhile, the state’s shift toward suburban and rural living, driven by remote work trends, further enhances the appeal of vacation rentals. Homes in scenic, spacious areas are highly desirable, and short-term rentals in popular destinations can command peak season rates, boosting profitability.
Top 5 Cities for Short-Term Rentals in the State of Michigan in 2025
| Ranking | City | Monthly Short-Term Rental Income | Short-Term Rental Cash on Cash Return |
| 1 | Hazel Park | $2,757 | 7.31% |
| 2 | Eaton Rapids | $3,427 | 7.02% |
| 3 | Oak Park | $2,919 | 6.67% |
| 4 | Clawson | $3,293 | 5.98% |
| 5 | Inkster | $1,799 | 5.88% |
To start searching for profitable short-term rental properties for sale in any of these best states for 2025, click here.
Mashvisor allows real estate investors to search for and find the best states to buy investment property in 2023.
Investing in the Best Rental Properties in 2025
Choosing the best states to buy investment property is the first step in making profitable real estate investment decisions. The next step is selecting the best location before searching for top-performing long-term or short-term rental properties for sale. Now that you know which states to focus on in 2025, it’s time to consider the other steps in the process.
Lucky for you, Mashvisor can help you along the way. The real estate heatmap available on our real estate investing app can show you the best neighborhoods for either rental strategy in the US based on prices, rental income, and ROI. Next, the investment property search engine can help you locate profitable opportunities within your selected market and budget.
Last but not least, the Mashvisor rental property calculator provides comprehensive side-by-side investment property analysis for both rental strategies. This way, you can know what rental income, operating expenses, occupancy rate, and return on investment to expect before you buy a property.
All that is left is to try the power of the Mashvisor platform in boosting your long-term and short-term rental property investment decisions.