2026's STR Alpha: The Top 10 Markets & Their Yields

Forget the usual suspects. The highest-yielding STR plays in 2026 are hiding in plain sight, in markets that don't scream "tourist trap." The thesis is clear: affordability + year-round demand = outsized returns. The data from AirDNA's latest report lays it out perfectly.

The top 10 markets on the list deliver yields near 14%. That's the alpha. But the real story is how they get there. These aren't luxury beachfront properties. The average home price across these 10 markets is just $296,000, yet they carry a projected annual revenue potential of $40,500. That math-buying low, earning steady-is the core return driver. This isn't about chasing seasonal spikes; it's about buying a cash flow machine at a discount.

And where does that cash flow come from? It's no longer just about summer vacations. Demand is increasingly year-round, fueled by workforce travel, healthcare, education, and government or military-related activity. This is the shift. These markets are becoming hubs for business travelers, medical professionals, students, and essential workers, creating a stable, predictable income stream that seasonal tourism simply can't match.

The bottom line? The 2026 STR playbook is about moving beyond traditional hotspots. The highest yields are in lower-cost, operationally efficient markets where demand is consistent. It's a signal vs. noise situation: the noise is the crowded, expensive resorts. The alpha is in the overlooked towns with real, year-round needs.

The Breakdown: The Top 10 Markets & Their Metrics

The alpha is in the details. Let's break down the actual list and see what makes these 10 markets the 2026 STR winners. The exact lineup is: Port Arthur, Texas; Abilene, Texas; Downtown Saint Paul, Minn.; Charleston, W.Va.; Springfield, Ill.; Lake Charles, La.; Montgomery, Ala.; Akron, Ohio; Lebanon, Pa.; Jackson, Miss.

The math is the hook. These aren't beachfront getaways. The average home price is just $296,000, yet they project an annual revenue of $40,500, driving yields near 14%. That's the affordability play. But the real edge is in the demand drivers. These markets are powered by workforce travel, healthcare, education, and government or military-related activity. This creates year-round, stable income-no seasonal busts. It's the shift from chasing tourists to serving essential workers and business travelers.

Regulatory stability is the silent multiplier. The report explicitly cites this as a top criterion. You can't scale a cash flow machine if the rules change overnight. Markets like Austin, with clearer licensing paths, are a benchmark. The top 10 list avoids the regulatory minefields of cities with restrictive or unclear laws. This stability reduces the risk of a sudden shutdown, protecting your cash flow. In a year like 2026, where the STR environment is strong, that clarity is a major competitive advantage.

The bottom line is a setup for consistent returns. These markets combine low entry costs with diversified, non-seasonal demand and a favorable regulatory backdrop. It's a clean, repeatable formula. For investors, the watchlist is clear: look past the obvious. The highest-yielding STR plays are in these overlooked towns where the fundamentals are solid.

The Alpha Leak: Metrics That Matter

Forget the noise. The real alpha in 2026 STR investing is in the numbers that actually move your cash flow. It's time to cut through the marketing and focus on the metrics that separate a winner from a washout.

The Baseline: Occupancy + ADR = Profitability The foundation is simple. You need both high occupancy and strong pricing power. The report shows the top markets hit 78% occupancy in Port Arthur, a solid start. But that's just the first hurdle. You need to pair that with a strong Average Daily Rate (ADR). The magic happens when these two meet: high occupancy at good rates drives Revenue per Available Room (RevPAR), which is your quick benchmark for market health. Markets with 60-80% annual occupancy and robust ADRs are the ones that consistently cover expenses and generate cash.

The Single Score: BPTI AirDNA's proprietary Best Places to Invest (BPTI) Score is your cheat code. It doesn't just rank markets; it integrates the key drivers-demand, revenue potential, and price affordability-into one powerful metric. This score cuts through the clutter of individual data points. When the report says Port Arthur is #1, it's because its BPTI score reflects the optimal balance of these factors. Use this score as your starting filter for any market analysis.

The Real Yield: Pre-Expense Revenue vs. Purchase Price Here's where most investors get burned. The headline yield of 14% is a gross number. The true yield is pre-expense revenue divided by purchase price. That means you must model the projected annual rental income before factoring in taxes, insurance, cleaning, platform fees, and management. This pre-expense revenue is the raw cash flow engine. Divide that number by your actual purchase price (not the list price) to get your real, actionable yield. This is the number that matters for your return on investment.

The bottom line is operational. The top 10 markets succeed because they hit the sweet spot: high occupancy, strong ADRs, and a favorable BPTI score driven by affordability. Your job is to model the pre-expense revenue against your cost. If that math works, you've found a 2026 STR winner. If not, it's a watchlist item, not a buy.

Catalysts & Risks: What to Watch in 2026

The 2026 STR thesis is set. The alpha is in the overlooked towns. But the setup is dynamic. The next big moves will come from the policy front and the shifting demand landscape. Here's what to watch.

The Regulatory Catalyst: Year-Round Demand Takes Off The primary bullish signal is the continued growth of non-seasonal travel. The top 10 markets succeed because they serve workforce travel, healthcare, education, and government or military-related activity. This isn't a fad. It's a structural shift creating stable, predictable income. If this trend accelerates, it validates the entire investment thesis. More business travelers and essential workers mean higher occupancy in those towns, even during traditional off-seasons. That's the real catalyst for sustained high yields.

The Regulatory Risk: Overreach in the States The biggest threat isn't the market-it's the lawmakers. State legislatures are actively shaping the STR environment. In 2025, we saw consequential laws pass, like California's host data-sharing law and Colorado's lodging tax expansion. These are not isolated incidents. They set a precedent for increased scrutiny and taxation. Watch for similar bills in 2026. The risk is regulatory overreach that chokes off cash flow through higher costs or stricter enforcement.

The Black Swan: Effective Bans The most severe risk is an outright ban, like the one in New York City. When a city imposes an "effective ban," the consequences are brutal. Airbnb listings can plummet by 85%, guest spending collapses, and hotel rates spike. While the top 10 markets are chosen for regulatory stability, no market is immune. Monitor for any city considering rules so restrictive they effectively shut down the STR model. Such a move would cause massive guest displacement and could trigger a regional rate shock, disrupting the stable demand these towns rely on.

The Bottom Line: A Watchlist, Not a Bet The 2026 STR playbook is clear, but the environment is volatile. The key catalyst is the expansion of year-round demand. The key risk is regulatory overreach. Your edge is in selecting markets with the strongest demand diversification and the clearest local rules. Stay vigilant. The alpha is in the details, but the thesis can be broken by a single, poorly timed law.