Best Markets for Short-Term Rental Investing 2026: What PropertyIQ Scores Reveal That Occupancy Data Misses

Every short-term rental market ranking you will find online is built on the same data: occupancy rates, average daily rate, and revenue per available rental. AirDNA, Rabbu, Mashvisor, and similar platforms track these figures well. They tell you which markets have performed for STR investors in the recent past.

What they do not tell you is whether the underlying real estate market is healthy -- and that matters enormously for short-term rental investing because STR investors carry the same real estate risk as any other property owner. The property must hold its value or appreciate for the investment thesis to work over time. High occupancy in a declining market is a trap that takes several years to reveal itself.

The PropertyIQ Score measures something different: the fundamental supply-demand balance of the underlying real estate market. It scores every U.S. metro on a 0-100 index updated monthly using Zillow, Census, and Realtor.com data, covering price trends, inventory levels, demand velocity, affordability against income fundamentals, and economic indicators.

All scores referenced in this post are effective February 28, 2026.

What the Popular STR Markets Actually Score

The first thing the PropertyIQ data reveals about short-term rental markets is uncomfortable: the most popular STR destinations in the country are not the markets with the strongest underlying fundamentals.

Miami, FL: 13 out of 100

Miami has long been one of the most searched STR markets in the country. It has beaches, nightlife, international tourism, and a strong brand. It also has 47,000+ homes for sale, an 81.5% overvaluation reading relative to income fundamentals, and a demand score of 5.7 out of 100. A score of 13 places Miami in the bottom 15% of all U.S. markets tracked.

Read the full breakdown: Miami real estate market 2026

New Orleans, LA: 25 out of 100

New Orleans has irreplaceable tourism demand. Mardi Gras, Jazz Fest, French Quarter foot traffic, and a dining scene that draws visitors from across the country. The PropertyIQ Score is 25. Home values have declined 6.5% year over year. Homes sit on market for 88 days on average. The occupancy data may still look favorable for an established, well-reviewed STR. The underlying market is weakening.

Read the full breakdown: New Orleans real estate market 2026

Scottsdale, AZ (Phoenix metro): 45 out of 100

Scottsdale ranked as a top STR market through most of the 2020-2023 period. The Phoenix-Scottsdale metro has since accumulated 19,352 active listings, a 49.2% overvaluation reading, 3.88% year-over-year home value decline, and 28.2% of listings already having cut their asking price. A score of 45 reflects a market where supply significantly exceeds demand.

Read the full breakdown: Scottsdale AZ real estate market 2026

Nashville, TN: 52 out of 100

Nashville is the outlier in this group -- it is the only market on this list scoring at or above the national median. A 52 reflects a market holding its footing better than most Sun Belt peers. Home values are up 1.6% year over year. It is not a top-tier market by PropertyIQ standards, but it is materially different from Miami (13) or Scottsdale (45). The Nashville story is nuanced: the city has real demand, but rapid STR supply growth during the 2020-2022 period has normalized returns.

Read the full breakdown: Nashville real estate market 2026

Austin, TX: 18 out of 100

Austin deserves its own discussion. It was the emblematic STR market of the 2020-2022 era: explosive population growth, a booming tech economy, South by Southwest, and Formula 1. STR investors poured in. So did homebuilders, developers, and out-of-state investors in the traditional rental market.

By February 2026, Austin scores 18 out of 100. Home values are down 8.82% year over year. The price cut rate is 20.01%. Zillow forecasts an additional -2% decline. Investors who entered the Austin STR market at 2022 prices with 2022 occupancy expectations are now holding properties that have declined significantly in value.

The Austin case is the clearest example in the current dataset of what happens when STR appeal (real tourism demand, strong events calendar) decouples from underlying market fundamentals.

Read the full breakdown: Austin real estate market 2026

Why High-Popularity STR Markets Score Low

The pattern is not random. Several forces explain why markets with strong STR brand recognition tend to score lower on underlying fundamentals:

1. STR demand attracted over-investment. High STR revenue in Nashville, Miami, and Scottsdale from 2019 to 2022 attracted both STR unit creation (converting long-term rentals and primary residences to STR use) and new construction. When a market is perceived as profitable, capital flows in until the opportunity narrows. The result is more supply -- both of STR units specifically and housing generally.

2. Price inflation beyond income support. The same investor demand that created STR revenue opportunity also inflated acquisition prices beyond what local income fundamentals support. Miami at 81.5% overvalued and Scottsdale at 49.2% overvalued are markets where prices reflect optimistic assumptions about future STR revenue, not current income-based purchasing power.

3. Regulatory pressure followed the growth. Cities with high STR visibility attracted regulatory scrutiny. Nashville, Miami, and New Orleans all have STR licensing requirements, caps in some districts, or active legislative pressure. Regulatory risk is not captured in the PropertyIQ Score, but it correlates with the same high-visibility markets that tend to show lower scores today.

Markets With Strong PropertyIQ Scores and STR Potential

High PropertyIQ Score does not guarantee STR success -- a market can score 98 with zero tourism appeal. But a strong score indicates that the underlying real estate is healthy, which provides a margin of safety that low-scoring markets do not.

San Diego, CA: 94 out of 100

San Diego is a rare case: a major coastal tourism market with a PropertyIQ Score in the top tier. The score reflects a market where home sales are up 13.5% year over year, the Zillow forecast is +2.1%, and supply has not overwhelmed demand. San Diego's tourism infrastructure (beaches, Comic-Con, military family relocations, biotech conference traffic) provides STR demand across multiple visitor segments. The 94 score indicates that the underlying real estate supports the STR opportunity rather than working against it.

Read the full breakdown: San Diego real estate market 2026

Denver, CO: 76 out of 100

Denver scores 76, which places it above the national median despite being 56% overvalued by the PropertyIQ income model. The overvaluation reading reflects high home prices relative to Denver incomes -- which is a real constraint -- but the demand metrics remain positive. Denver's STR profile benefits from Rocky Mountain ski proximity, a strong convention calendar, and year-round outdoor tourism. The score of 76 suggests a market where fundamentals are still positive, not a market in the structural decline that characterized Miami or Scottsdale.

Read the full breakdown: Denver real estate market 2026

Charleston, SC: 40 out of 100 (Recovering)

Charleston scores 40 as of February 2026, but the score has risen 9 points over three months and 11 points from its September 2025 low. A market in recovery can offer different conditions from a market in decline at the same score. Charleston's heritage tourism, waterfront appeal, and growing convention business provide STR demand drivers. The rising score trajectory warrants monitoring over the next two to three reporting periods.

Read the full breakdown: Charleston SC real estate market 2026

How to Use PropertyIQ Score in STR Market Due Diligence

The PropertyIQ Score is one input into STR market analysis, not a complete framework on its own. The recommended approach for STR investors:

Step 1: Identify markets where the PropertyIQ Score is above 60. A score below 60 indicates the underlying market has supply-demand dynamics working against real estate value retention. That does not make STR revenue impossible, but it creates an environment where property value risk compounds STR operating risk.

Step 2: Layer in STR-specific data. Within markets scoring above 60, evaluate occupancy rates, ADR, regulatory environment, and seasonality using platforms designed for that data. PropertyIQ does not track STR-specific metrics directly.

Step 3: Check the overvaluation reading. Markets that are significantly overvalued relative to income fundamentals carry acquisition price risk. If the STR revenue assumptions change, the property must hold its value to avoid losses. High overvaluation reduces that margin.

Step 4: Review the supply trajectory. Inventory trending up year over year is a signal that competition is increasing -- both for STR occupancy (more units in the market) and for resale exits if the STR thesis does not work out.

The PropertyIQ Score surfaces these signals in a single monthly number updated across 400+ markets. The current data shows a clear pattern: the most marketed STR destinations are not the same as the markets with the healthiest underlying real estate.

PropertyIQ scores as of February 28, 2026. All data sourced from the PropertyIQ index using Zillow, Census, and Realtor.com data. All data for informational purposes only.