Madison, IN Airbnb Market Data, Statistics, and Occupancy Rates

Madison Short-Term Rental Market Overview

Madison, IN presents a compelling small-market opportunity for short-term rental investors, with average home values of $357,668 and annual revenue averaging $27,477 across 87 active listings. The market's ADR of $172 sits well below Indiana's $290 state average, reflecting its positioning as an affordable getaway destination, while a 30% occupancy rate tracks close to the statewide benchmark of 32%. With a 54% year-over-year increase in active listings, investor interest is clearly growing — though that rapid supply growth deserves careful monitoring.

Key Market Statistics

According to Rabbu market data, the Madison short-term rental market shows:

Data sources: Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Mar, 17 2026.

Why Investors Consider Madison

Madison's blend of relatively affordable property prices and reasonable revenue potential makes it an attractive entry point for investors seeking small-town STR returns in Indiana.

Expert Market Assessment

"Madison earns an ROI score of 59 out of 100, placing it in the "Attractive Opportunity" tier — a market with genuine upside tempered by a few soft spots. Seasonality is pronounced: July leads with $3,262 in average monthly revenue while January bottoms out at just $1,304, creating a nearly 2.5× swing between peak and trough. The below-average supply/demand balance, driven partly by a 54% surge in new listings, is the primary risk factor investors should weigh. That said, for operators who price competitively and target the right property size, Madison's combination of accessible home prices and steady summer demand offers a workable investment thesis."

— Rabbu Market Analysis Team

Key Airbnb Metrics & Trends in Madison

Average revenue by month in Madison

Madison shows clear seasonality, with July delivering the highest average revenue at $3,262 and January at the bottom with just $1,304 — a spread of nearly $2,000 between peak and trough. The warm-weather months from May through October consistently outperform, making summer-focused pricing and marketing strategies essential for maximizing returns.

Active Airbnb listings by property size in Madison

One- and two-bedroom properties dominate Madison's supply, accounting for 33 and 31 listings respectively out of 87 total. Larger homes are notably scarce — only 5 four-bedroom listings exist — which could represent an opportunity for investors willing to target the upper end of the market where competition is thin.

Average daily rate (ADR) by property size in Madison

ADR rises steadily with property size, from $146 for one-bedroom units to $254 for four-bedroom homes, representing a 74% premium for the largest category. Three-bedroom listings at $219 may offer the strongest premium-to-cost trade-off, as they command a significant rate bump over two-bedrooms ($162) without the acquisition cost of a larger property.

Average RevPAN by property size in Madison

Despite commanding lower nightly rates, one-bedroom properties deliver the highest RevPAN at $53, thanks to their superior occupancy. RevPAN drops steadily as property size increases — down to just $29 for four-bedrooms — indicating that smaller units generate better income per available night after accounting for vacancy.

Average occupancy rates by property size in Madison

Occupancy drops sharply with size: one-bedrooms lead at 36%, two-bedrooms follow at 29%, three-bedrooms at 16%, and four-bedrooms at just 12%. For investors prioritizing consistent cash flow and lower vacancy risk, smaller properties in Madison clearly offer more dependable booking volume.

Average monthly revenue by property size in Madison

Four-bedroom properties top monthly revenue at $3,300, outpacing all other sizes despite their low occupancy, driven by their premium nightly rate. One-, two-, and three-bedroom units cluster much closer together at $2,155–$2,269 per month, suggesting that the revenue advantage of mid-sized properties is marginal in this market.

Average annual revenue by property size in Madison

Four-bedroom listings stand out with $39,610 in average annual revenue, roughly 45% more than three-bedroom properties at $27,238. One- and two-bedroom units generate similar annual returns around $25,870–$26,219, making them appealing for investors focused on lower acquisition costs and more predictable occupancy rather than maximum gross revenue.

Most common amenities for Airbnb listings in Madison

Parking leads as a near-universal amenity at 97%, followed by self check-in and kitchen access at 83% each — signaling these are baseline expectations for guests in Madison. Outdoor-oriented features like patios (63%), outdoor furniture (52%), and backyards (46%) also rank highly, reflecting the market's appeal to leisure travelers seeking a relaxed, home-like experience.

Understanding Madison's ROI Score: 59/100

Rabbu's ROI Score is a proprietary metric that evaluates short-term rental investment potential based on multiple factors.

How the ROI Score is Calculated

What This Means for Investors

Madison's ROI score of 59 out of 100 places it in the "Attractive Opportunity" band, reflecting a market where revenue potential and property costs are reasonably aligned. Revenue-to-price ratio and occupancy stability both rate as average, providing a stable foundation, while the below-average supply/demand balance — driven by rapid listing growth — is the primary factor pulling the score down. Investors should pair these data points with thorough local regulatory research and a conservative financial model to ensure the numbers work for their specific property and strategy.

Short-Term Rental Regulations in Madison

Understanding local STR regulations is essential before investing in Madison. Here's the current regulatory landscape:

Permit Requirements

Short-term rental operators in Madison, Indiana may need to obtain permits or register their properties with local authorities before listing. Investors should verify current requirements directly with the City of Madison and Jefferson County, as regulations in smaller Indiana communities can evolve quickly.

Key Restrictions

Common STR restrictions that may apply include occupancy limits based on property size, minimum stay requirements, noise ordinances, and parking mandates. HOA rules can also impose additional constraints, particularly in historic or residential neighborhoods, so reviewing any applicable covenants before purchasing is essential.

Tax Obligations

STR hosts in Indiana are generally subject to state sales tax and county innkeeper's tax on short-term accommodations. Platforms like Airbnb often collect and remit some of these taxes automatically, but operators should confirm their full obligations with the Indiana Department of Revenue.

Regulations subject to change. Always verify with local authorities before purchasing. A Rabbu partner agent specializing in Madison can provide current regulatory guidance.

Future Outlook & Long-Term Forecast

"Over the next 12–18 months, Madison's STR market is likely to see continued seasonal demand concentrated in the May–October window, with peak monthly revenues estimated around $2,900–$3,300. ADR may edge up modestly by 1–3% as hosts refine pricing strategies, though the rapid 54% listing growth could put downward pressure on occupancy if demand doesn't keep pace. Investors entering the market should anticipate occupancy rates hovering in the 28–32% range market-wide, with smaller properties maintaining a clear edge in booking consistency. The supply-demand balance, currently rated below average, will be the key metric to watch."

— Rabbu Market Analysis Team

Frequently asked questions about Airbnb in Madison, IN

What is the average Airbnb occupancy rate in Madison?

The average occupancy rate for Airbnb listings in Madison, IN is currently 30%, which is just slightly below Indiana's statewide average of 32%. Occupancy varies significantly by property size — one-bedroom units lead at 36%, while four-bedroom properties average only 12%. Investors targeting smaller properties can generally expect more consistent booking activity throughout the year.

How much do Airbnb hosts make in Madison?

Airbnb hosts in Madison earn an average of $2,289 per month, which translates to roughly $27,477 annually based on trailing 12-month performance data. Revenue varies by property size, with four-bedroom listings generating the highest annual revenue at approximately $39,610, while one- and two-bedroom units average around $26,000–$26,200 per year. Seasonal fluctuations also play a significant role, with summer months delivering substantially higher income.

Is Madison a good market for Airbnb investment?

Madison scores a 59 out of 100 on Rabbu's ROI Score, placing it in the "Attractive Opportunity" category. The market offers a reasonable revenue-to-price ratio with average home values of $357,668 and annual revenue around $27,477. The main consideration is the below-average supply/demand balance, as listings have grown 54% year-over-year. Investors who choose the right property size and manage pricing strategically can find solid potential here, especially with smaller units that maintain higher occupancy.

What is the average daily rate (ADR) for Airbnb in Madison?

The average daily rate in Madison is $172, which is meaningfully lower than Indiana's statewide average of $290. ADR scales with property size: one-bedroom listings average $146, two-bedrooms come in at $162, three-bedrooms at $219, and four-bedroom properties command $254 per night. This pricing structure reflects Madison's appeal as an affordable getaway destination.

Are short-term rentals legal in Madison?

Short-term rentals operate in Madison, IN, as evidenced by 87 active Airbnb listings currently in the market. However, specific permit requirements and regulations may apply at the city or county level. Prospective investors should check with the City of Madison and Jefferson County for the most current rules regarding STR permits, zoning restrictions, and any applicable licensing requirements before listing a property.

When is peak season for Airbnb in Madison?

Peak season in Madison runs from May through October, with July being the strongest month at an average revenue of $3,262 per listing. June ($2,955) and May ($2,872) round out the top three months. The slowest months are January ($1,304) and February ($1,331), so investors should plan for reduced winter income and budget accordingly.

How many Airbnbs are there in Madison?

As of April 2026, there are 87 active Airbnb listings in Madison, IN. The market has seen significant growth, with active listings increasing 54% year-over-year. One-bedroom (33 listings) and two-bedroom (31 listings) properties make up the majority of supply, followed by 13 three-bedroom and 5 four-bedroom listings.

How is Airbnb revenue calculated in Madison?

The annual and monthly revenue figures shown for Madison are derived from the trailing 12 months of historical booking performance for active comparable Airbnb listings in the market — they are not forward-looking projections. Rabbu averages each comparable listing's actual revenue per available night (RevPAN) by month over the past year, removes regional outliers, and rolls the remaining data up to a market-level historical average. Because each month uses its own historical performance, the figures naturally reflect seasonal peaks and slower periods. Individual results can vary based on property quality, pricing strategy, and operational management.

About Rabbu Market Data

Rabbu provides Airbnb and short-term rental market data and statistics across the United States. Our mission is to empower investors with accurate insights and easy-to-use tools, so they can confidently identify and act on the best opportunities in the Airbnb market.

What this data includes

• Regularly updated active Airbnb and STR listing counts for the Madison, IN market
• Average daily rate, occupancy, and RevPAN metrics across property sizes
• Monthly and annual revenue trends based on trailing 12-month booking data
• Home value benchmarks sourced from the Zillow Home Value Index (ZHVI)
• Amenity prevalence data for active listings in the market

Sources and disclaimers

Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Mar, 17 2026. Revenue projections are estimates based on comparable properties and do not guarantee future performance. Data reflects trailing 12-month historical averages and market conditions may have shifted since the most recent update. Local regulations, HOA restrictions, and tax obligations vary and should be independently verified before investing.