Rental Investors Targeted 17 Affordable Submarkets

New data identifies emerging short-term rental hubs where lower home values may help offset current mortgage costs.

Updated on Sept. 21, 2026 in Apartments

Bold vector editorial illustration showing a house key framed within a home outline, evocative of new real estate investment opportunities. — Investors are increasingly targeting affordable secondary submarkets for short-term rental properties, seeking higher annual yields outside major urban centers. AI Illustration. Upload story photo >

Live Poll

Do you believe the growth of short-term rentals in your area harms local housing affordability?

AirDNA has identified 17 U.S. submarkets ripe for short-term rental investment based on high annual yields and moderate competition. These areas are drawing interest as investors look for affordable entry points outside of major, high-cost urban centers.

Why it matters

Investors are pivoting toward markets with lower home prices to mitigate the impact of high mortgage rates on cash flow. These regions often appeal to travelers seeking proximity to regional attractions or military bases rather than traditional tourist hotspots.

Rockford, Illinois, leads the list with an annual revenue potential of $40,024 and a 14% yield on an average home value of $300,442. This market saw a 13% year-over-year increase in listings, outpacing regional housing trends.

The players

AirDNA

A provider of data and analytics for the short-term rental industry that tracks property performance and market trends for investors.

National Association of Realtors

A trade association that provides national housing market data, including its monthly Housing Affordability Index.

The details

AirDNA filtered these locations by selecting submarkets that offer annual yields exceeding 10% while maintaining a professional management share of under 20%. By focusing on areas where individual hosts are not crowded out by large firms, investors may find opportunities to maximize occupancy and revenue. This strategy targets smaller, more affordable markets that remain accessible to individual investors despite the broader national housing affordability challenges.

August 2026: The National Association of Realtors released the Housing Affordability Index.
September 21, 2026: AirDNA published its report on top short-term rental submarkets.

Money Landscape

These investment patterns emerge as the national housing market faces persistent affordability hurdles tracked by the National Association of Realtors' Housing Affordability Index. Investors are increasingly moving toward regions where entry prices allow for viable rental returns despite the higher-rate environment.

If you are considering rental property investment, prioritize markets where professional management density remains low to avoid aggressive competition. Always consult with a qualified financial or tax professional to review how short-term rental income fits into your specific household budget and long-term tax strategy.

The takeaway

The move toward secondary markets indicates a strategic shift by investors to bypass high-cost urban areas in favor of higher yield opportunities. Investors should monitor ongoing reports on housing affordability and local rental growth to assess the long-term feasibility of these submarkets.