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Top 10 STR-Friendly Cities in the USA

STR friendly cities

 

Starting a short-term rental business can be an excellent source of income. However, it can also be difficult when a city has strict laws and regulations for operating one. Not to mention how time consuming it is to go through permits and registration requirements!

If you want to learn about STR friendly cities in the USA, it’s all in this article.

Discover the top 10 STR friendly cities along with their potential revenue and occupancy rate. Continue reading to learn more!

What to Expect: Airbnb Legal Requirements

If you want to become an Airbnb host, you definitely can! But before you do, you have to understand the local laws and regulations based on your jurisdiction. Here are some of the legal requirements you need to look out for:

1. Business Licenses

Major cities such as Seattle and New York City require business licenses before you can operate an STR. You can take a look at your local government’s official website and learn more about the requirements. You may have to fill out a form and pay a certain amount when applying for a business license.

2. Zoning Restrictions

There are certain cities that allow short-term rentals but have zoning restrictions. For instance, in Orlando City, standard residential zoning districts prohibit short-term rentals. A property needs to be zoned as an R-3 transient residential before it can be leased for 30 days or less.

3. Permits

Apart from business licenses and registration, you may also need to apply for an STR permit. This will entirely depend on your city’s requirements. For instance, in Sacramento City, all short-term rental operators need to apply for an STR permit or a conditional use permit from Community Development. 

4. Taxes

Several cities require STR operators to collect tax for each overnight stay. The easiest way to learn about collecting taxes in your city is to reach out to your local government.

Perks of Investing in STR-friendly Cities

There can be another set of requirements before running a short-term rental business in certain cities. So it’s always better to look at other options! Check out the perks of investing in STR-friendly cities:

  • Worry-free on Local Laws

Why invest in a city where you fear unknowingly breaching local laws? If you invest in STR-friendly cities, you can be worry-free once you get to complete the process. Other cities may just require you to get registered and pay certain taxes, and you can start right away!

  • Easy Application for Airbnb Business

By “easy application”, we mean fewer complications and requirements. STR-friendly cities may often require you to fulfill an online application form and submit valid government IDs. Once approved, all you have to do is work on your listing’s details.

Top 10 Short-term Rental Friendly Cities

We filtered the STR-friendly cities USA based on lesser requirements and smooth regulations. Check out the best cities for short-term rentals in the USA as of January 2023:

1. Milwaukee, Wisconsin

To begin with, the city of Milwaukee does not have any Airbnb rules that restrict short-term rentals. However, you will need to pay state and local taxes. This includes Sales Tax, County Tax, and Basic Room Tax.
You can learn more about taxes on Milwaukee’s Government Site. Here is the Airbnb data in Milwaukee:

  • Airbnb annual revenue: $29,277
  • Average occupancy rate: 64%
  • International Guests: 25%
  • Domestic Guests: 75%
  • Number of Airbnb listings: 888
2. Dallas

Airbnb hosts in Dallas are required to register their properties to operate as short-term rentals. Hotel Occupancy Taxes (HOT) are required to be collected by hosts and submitted every month to their local city. You can register your property in Dallas through this link!
Once your registration is completed and a license number is added to your listing, you can start hosting. Check out the Airbnb statistics in Dallas:

  • Airbnb annual revenue: $30,454
  • Average occupancy rate: 61%
  • International Guests: 14.3%
  • Domestic Guests: 85.7%
  • Number of Airbnb listings: 4,175
3. Cape Cod

To operate a short-term rental in Cape Cod, Massachusetts, it’s required to register with the Massachusetts Department of Revenue. However, you may need to check if your listing can be exempted from registration. For instance, if your listing only hosts long-term stays (90+ nights), you are not required to register. There are currently no STR regulations as the government leaves it to individual communities. Discover the Airbnb statistics in Cape Cod:

  • Airbnb annual revenue: $33,846
  • Average occupancy rate: 34%
  • International Guests: 10.2%
  • Domestic Guests: 89.8%
  • Number of Airbnb listings: 38
4. Davenport

Davenport City does not mention any short-term rental restrictions as of January 2023. However, the state of Florida requires all vacation rentals to be licensed with the Florida Department of Business & Professional Regulation. Here’s what you can expect with Airbnb data in Davenport:

  • Airbnb annual revenue: $67,835
  • Average occupancy rate: 85%
  • International Guests: 33%
  • Domestic Guests: 66%
  • Number of Airbnb listings: 8,065
5. Anaheim

According to Anaheim’s Municipal code, you will need to register for a business license if you want to operate for 30 days or less. This means that if you host a traditional hospitality stay for more than 31 nights at a time, you will not need to register. However, you will need to claim an exemption via Airbnb.

Read more about short-term rental laws in Anaheim. Check out the Airbnb data in Anaheim:

  • Airbnb annual revenue: $74,465
  • International Guests: 30%
  • Average occupancy rate: 89%
  • Domestic Guests: 70%
  • Number of Airbnb listings: 720
6. Phoenix

Airbnb regulations in Phoenix require hosts to register with the local city and (Maricopa) county and apply for a license to operate. Depending on the structure of your property, you may also want to check the zoning restrictions in Phoenix. Discover the Airbnb statistics in Phoenix:

  • Airbnb annual revenue: $47,616
  • Average occupancy rate: 65%
  • International Guests: 15.8%
  • Domestic Guests: 84.2%
  • Number of Airbnb listings: 8,718
7. Arlington

Arlington’s STR requirements include registration and obtaining a permit to operate. There are also recent zoning districts. However, all non-residential zoning districts and all mixed-use zoning districts are eligible for STR use. Here’s a recent Airbnb data in Arlington:

  • Airbnb annual revenue: $28,342
  • Average occupancy rate: 53%
  • International Guests: 25%
  • Domestic Guests: 75%
  • Number of Airbnb listings: 361
8. San Antonio

A permit is necessary to operate an STR in San Antonio, Texas. The city also collects Hotel Occupancy Tax on behalf of Bexar County. There are two categories of STR permits which depends on the property owner’s status. The good news here is that STR permits in San Antonio are good for three years! Check out the Airbnb statistics in San Antonio:

  • Airbnb annual revenue: $30,798
  • Average occupancy rate: 59%
  • International Guests: 25%
  • Domestic Guests: 75%
  • Number of Airbnb listings: 3,346

Related article: Rental Arbitrage in San Antonio

9. Gatlinburg

To operate an STR in Gatlinburg, you need a business license and pay sales & state taxes. Unlike other cities, you won’t need to submit floor plans to the city in order to operate an STR property in Gatlinburg. Here is the Airbnb data in Gatlinburg:

  • Airbnb annual revenue: $60,781
  • Average occupancy rate: 70%
  • International Guests: 94.3%
  • Domestic Guests: 5.71%
  • Number of Airbnb listings: 1,261
10. Baltimore

In Baltimore, Airbnb hosts are required to register their property with the city. You may get a maximum of 2 licenses – one for your permanent residence, and another for a secondary unit. It’s still considered an STR-friendly city as there are not many rules and regulations! Once you register and obtain a state tax ID, you can add your registration and start hosting.

  • Airbnb annual revenue: $22,239
  • Average occupancy rate: 57%
  • International Guests: 11%
  • Domestic Guests: 89%
  • Number of Airbnb listings: 1,171

Bottomline 

Since you already have an overview of the STR-friendly cities to invest in, your next step is to level up the game! You can start looking for a profitable Airbnb property in your preferred area and find the best locations for short-term rentals.

While each neighborhood may vary according to its profitability, the only way to make sure is to use an Airbnb profit calculator. If you’d like to find profitable properties, you can take advantage of a short-term rental analytics tool like Airbtics!

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