AirDNA’s 2026 Hidden Gem report reveals the top 17 affordable U.S. short-term rental markets for high-yield investing—led by Rockford, IL.
While popular beach towns and mountain getaways usually dominate short-term rental rankings, elevated mortgage rates are shifting the focus to smaller, under-the-radar destinations that offer budget-conscious investors a chance to break into the market without breaking the bank.
AirDNA, a firm that compiles and analyzes Vrbo and Airbnb data, on Monday releases its report on the . The results shared exclusively with Realtor.com® shine a spotlight on 17 locations—nearly all clustered in the Midwest or the South—that are relatively affordable, but offer a high profit potential.
Topping the list of lesser-known short-term rental (STR) hot spots is Rockford, IL, a familiar name to Realtor.com readers after clinching the No. 1 spot in the Realtor.com August 2026 Hottest Housing Markets ranking, propelled by high buyer demand and fast market pace.
Another Midwestern destination, Akron, OH, took silver, while Warner Robins, GA, secured bronze.
Other markets promising projected returns on investment over 10% are Utica, NY; Otsego Lake, MI; Lawton, OK; Millersburg, OH; Midland, TX; Geneva, OH; Castle Rock Lake, WI; Houghton, MI; Michigan City, IN; Gary, IN; Manhattan, KS; Terlingua, TX; Nolin River Lake, KY; and Dunnellon, FL.
"This is a great list. There are so many markets that have affordable home prices," Linda Rollins, senior research analyst at AirDNA, tells Realtor.com. "With mortgage rates being so high, it's so hard to justify investing. ... But when you do have an area where home prices are still affordable, you could make a decent down payment and still be able to see those numbers work."
To zero in on smaller vacation rental markets, AirDNA researchers limited their analysis to areas with 400 to 1,000 listings, positive year-over-year inventory growth, and rising annual revenue per available room (RevPAR), which is a key industry metric that measures a property's ability to fill its rooms at a competitive average rate.
Markets were ranked by yield, calculated as average annual STR revenue relative to average home price, with the cities on the list delivering yields between 10% and 14%.
Other common threads among the ranked cities include having 20% or fewer listings that are professionally managed, signaling that the market is not yet saturated with STR operators, and lacking any active regulatory bans or stringent restrictions on rentals.
Home values across the ranking are relatively budget-friendly, ranging from just $266,555 in Houghton to $482,304 in Michigan City. Correspondingly, potential average annual revenues span from $27,833 to $50,046.
National parks and military bases
AirDNA economist Bram Gallagher notes that each enclave on the list benefits from a reliable source of recurring demand, depending on the region. In the Midwest, many of the top markets draw steady traffic from nearby national parks, including Gary and Michigan City near Indiana Dunes, and Akron, sitting just a short drive from Cuyahoga Valley National Park.
According to Gallagher, proximity to national parks and other outdoor destinations emerged as a major selling point during COVID-19, when people craved space to maintain social distance, and the appeal remained even after the pandemic receded.
"Travel is a really repeat business. People go out and visit national parks, they come back with their slideshows, and they show all their friends," he says.
However, what truly underpins the popularity of these smaller markets situated near national parks is housing affordability, which offers investors a lower entry barrier.
"The affordability, combined with the unique demand generators, [is] regularly pulling people into some of these markets," adds Gallagher.
Located a short distance from Cuyahoga Valley National Park, Akron, OH, offers short-term rental investors an average yield of 13%. (Getty Images) Rollins put that research into practice a year ago, when she used AirDNA data to purchase a $400,000 four-bedroom STR in the Akron suburb of Stow, OH, just a 10-minute drive from the Cuyahoga Valley park.
"I can buy a house in that market, and I can make the numbers work because of the revenue that is coming in, because of these niche demand drivers," says Rollins of her investment.
The analyst and her husband launched their rental in December 2025 and expect to earn $70,000 annually, $5,000 ahead of Rollins' initial projections.
In the South and West, military installations and major industrial sites anchor the local STR markets. Demand drivers range from family members attending basic training graduations at Fort Sill near Lawton to traveling contract workers looking for a place to stay for four to six months while on temporary assignments in Midland's oil fields or in Abilene's data centers.
"If you're an investor that has been questioning how do you make the numbers work when mortgage rates are so high and homes are becoming less affordable, come to this list, and it might be a bit more manageable," says Rollins.
Midwestern champion
While top-performing Rockford lacks a national park or a military base, Gallagher and Rollins note the area benefits from its close proximity to large, more expensive regional hubs, including Chicago and Madison, WI, ensuring a ready supply of visitors.
"It's right outside of these major metros in the Midwest, so if you're looking for a quick getaway, then you can go there for a weekend and hang out and see what's local," says Rollins.
This three-bedroom home in Rockford, IL, is listed for just $305,000. (Realtor.com) The average home value in Rockford sits at just over $300,000, paired with an average annual revenue potential of roughly $42,000, amounting to a robust 14% average yield in what Gallagher describes as a "great recipe for success."
Additionally, the market has seen a year-over-year listing growth of 13% and a RevPAR boost of 6%.
David Dale Johnson, real estate agent at Berkshire Hathaway HomeServices Crosby Starck Real Estate, says that another factor fueling Rockford's STR strength is the area's robust sports tourism.
"Youth and amateur tournaments at venues like Mercyhealth Sportscore One and Two, along with other local facilities, bring in teams and families for multinight stays," Johnson tells Realtor.com. "That visitor flow supports not just hotels, but also Airbnb- and Vrbo-style short-term rentals."
In addition, Rockford's healthcare sector generates midterm demand from traveling medical professionals.
"Together, those dynamics help explain why Rockford may stand out in short-term rental data," concludes Johnson.