Indiana is home to many thriving short-term rental markets, but identifying the top-performing cities can be overwhelming, especially when combing through data from countless locations across the state.
To simplify this process, we analyzed data from markets statewide and compiled a list of the top 12 cities for investors and landlords seeking potentially high-return rental properties in the coming year.
As always, we recommend thorough underwriting and analysis of any prospective property and a review of local short-term rental regulations before making any investment decisions.
How We Created This List
First, we looked at all Airbnb listings in Indiana that met the following criteria as of January 2025:
- Average Rating: 4.8 stars and above
- Guest Review Count: Minimum of 10
- Average Daily Rate: $1 (minimum) to $2,000 (maximum)
- Occupancy Rate: 1% (minimum) to 99% (maximum)
- Property Size: 1 to 10 bedrooms
- Property Type: Entire homes
We did this to eliminate Airbnb listings from our analysis that fall outside of what we consider "realistic" situations. This left us with a total of 3,241 Airbnb listings across the state of Indiana to work with.
Next, we grouped these listings by city and eliminated markets that didn't have at least 75 Airbnb listings meeting the above criteria. We took this step to avoid outlier cities we felt didn't have enough data to be considered at this current time. This left us with 12 cities in Indiana to rank.
Then, we needed to arrive at a gross yield number for each of our remaining cities in order to create our rankings. We did this by taking the average annual Airbnb revenue for each city and combining it with the cities median property value (from Zillow as of December 2024) to calculate our gross yield for each city.
Finally, we ordered the cities by highest gross yield.
The Top 12 STR Markets in Indiana
1. South Bend, IN
South Bend, IN, is a thriving hub for real estate investors eyeing the burgeoning short-term rental market. The city draws tourists with attractions like the iconic University of Notre Dame, known for its Fighting Irish sports teams, and the magical St. Joseph River Lights. Rich cultural events like the South Bend International Festival attract diverse visitors, offering lucrative opportunities for Airbnb hosts seeking good returns. With a promising real estate market, South Bend stands out as one of the best places for vacation homes and strong rental income potential.
Key STR Metrics:
- Average Gross Yield: 18.4%
- Average Property Value: $293,696 (as of December 2024)
- Average Annual Revenue: $53,928 (past 12 months)
- Average Occupancy Rate: 32% (past 12 months)
- Qualifying Airbnbs: 358 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 101%
Find Airbnbs For Sale in South Bend, IN →
2. Michigan City, IN
Michigan City, IN, is a booming short-term rental market offering lucrative opportunities for real estate investors seeking vacation rentals. Nestled on the southern shore of Lake Michigan, it features attractions like Washington Park Beach and the Lighthouse Place Premium Outlets. The annual Michigan City Grand Prix draws motorsport enthusiasts, while local sports teams add vibrancy. These attractions boost tourism and promise good rental income for Airbnb hosts, making it one of the best places for investment property with a promising real estate market.
Key STR Metrics:
- Average Gross Yield: 16.5%
- Average Property Value: $322,654 (as of December 2024)
- Average Annual Revenue: $53,137 (past 12 months)
- Average Occupancy Rate: 35% (past 12 months)
- Qualifying Airbnbs: 224 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 84%
Find Airbnbs For Sale in Michigan City, IN →
3. Nashville, IN
Nashville, IN, nestled in the heart of Brown County, offers a thriving short-term rental market with its charming vacation homes ideal for real estate investors. Known for its vibrant arts scene, this quaint town attracts tourists with attractions like the Brown County State Park, offering hiking and outdoor adventures. The bustling local art galleries and unique boutiques add to its appeal. Special events such as the Spring Blossom Parade and the Brown County Music Festival draw visitors year-round, providing solid rental income and good return potential for airbnb hosts.
Key STR Metrics:
- Average Gross Yield: 11.5%
- Average Property Value: $497,266 (as of December 2024)
- Average Annual Revenue: $57,305 (past 12 months)
- Average Occupancy Rate: 44% (past 12 months)
- Qualifying Airbnbs: 129 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 132%
Find Airbnbs For Sale in Nashville, IN →
4. Jeffersonville, IN
Jeffersonville, IN is a burgeoning destination for short-term rental properties, making it one of the best places for vacation rentals by 2025. Located along the scenic Ohio River, it offers attractions like the Big Four Bridge, perfect for tourists and Airbnb guests looking for a picturesque stroll. The vibrant local culture is further highlighted by events like the Steamboat Days Festival. This growing tourism hub is appealing to real estate investors seeking a good return in the housing market, with ample opportunities for investment property and rental income.
Key STR Metrics:
- Average Gross Yield: 10.7%
- Average Property Value: $314,804 (as of December 2024)
- Average Annual Revenue: $33,671 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 98 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 132%
Find Airbnbs For Sale in Jeffersonville, IN →
5. Madison, IN
Madison, IN is a charming destination bursting with attractions, making it a top contender in the short-term rental market for 2025. Nestled along the Ohio River, visitors can explore the rich history of its National Historic Landmark District, enjoy outdoor adventures at Clifty Falls State Park, and attend unique events like the Madison Regatta. The area's vibrant tourism scene provides real estate investors with lucrative opportunities in vacation rentals, promising good returns and rental income as an Airbnb host.
Key STR Metrics:
- Average Gross Yield: 10.0%
- Average Property Value: $337,792 (as of December 2024)
- Average Annual Revenue: $33,853 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 81 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 129%
Find Airbnbs For Sale in Madison, IN →
6. New Albany, IN
New Albany, IN, a hidden gem for short-term rental properties, blends rich history with modern allure, attracting tourists seeking unique experiences. The town enchants with attractions like the Carnegie Center for Art & History and the Culbertson Mansion. Positioned near Louisville, it draws sports fans with events like Thunder Over Louisville and the Kentucky Derby. For real estate investors eyeing vacation homes or Airbnb properties, New Albany offers promising rental income and a good return on investment, making it one of the best places for vacation rentals in 2025.
Key STR Metrics:
- Average Gross Yield: 9.9%
- Average Property Value: $317,619 (as of December 2024)
- Average Annual Revenue: $31,390 (past 12 months)
- Average Occupancy Rate: 38% (past 12 months)
- Qualifying Airbnbs: 97 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 74%
Find Airbnbs For Sale in New Albany, IN →
7. Indianapolis, IN
Indianapolis, IN is a vibrant city that appeals to tourists and real estate investors alike, making it one of the best places for short-term rental markets in 2025. With top attractions like the Indianapolis Motor Speedway, home of the iconic Indy 500, and the Indianapolis Colts in the NFL, it draws countless visitors year-round. The city's dynamic real estate market offers lucrative opportunities for real estate investing with promising rental income and strong cash flow potential, making it ideal for vacation homes and short-term rental properties like Airbnb.
Key STR Metrics:
- Average Gross Yield: 9.6%
- Average Property Value: $332,160 (as of December 2024)
- Average Annual Revenue: $32,028 (past 12 months)
- Average Occupancy Rate: 33% (past 12 months)
- Qualifying Airbnbs: 1,313 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 90%
Find Airbnbs For Sale in Indianapolis, IN →
8. Lafayette, IN
Lafayette, IN, a dynamic hub for real estate investing, offers an enticing short-term rental market thanks to Purdue University and lively downtown attractions. As a host city for sporting events like Purdue Boilermakers games and the annual Feast of the Hunters' Moon festival, it attracts tourists year-round. Airbnb hosts can tap into steady rental income, driven by visitors keen on exploring Prophetstown State Park and local breweries. Investors seeking cash flow will find Lafayette's vacation homes yield a good return, making it one of the best places for investment property.
Key STR Metrics:
- Average Gross Yield: 9.0%
- Average Property Value: $354,645 (as of December 2024)
- Average Annual Revenue: $31,755 (past 12 months)
- Average Occupancy Rate: 41% (past 12 months)
- Qualifying Airbnbs: 101 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 93%
Find Airbnbs For Sale in Lafayette, IN →
9. Bloomington, IN
Bloomington, IN, stands out as a vibrant hub for real estate investors seeking lucrative short-term rental properties. With attractions like Indiana University, sports events featuring the Indiana Hoosiers, and lively festivals such as the Lotus World Music & Arts Festival, it's a magnet for tourists and visitors. The thriving short-term rental market offers good return potential for Airbnb hosts aiming to tap into the growing tourism sector, making it one of the best places for real estate investing in 2025.
Key STR Metrics:
- Average Gross Yield: 8.2%
- Average Property Value: $466,888 (as of December 2024)
- Average Annual Revenue: $38,142 (past 12 months)
- Average Occupancy Rate: 35% (past 12 months)
- Qualifying Airbnbs: 408 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 96%
Find Airbnbs For Sale in Bloomington, IN →
10. Westfield, IN
Westfield, IN is a vibrant hub for real estate investing, offering an array of vacation homes ideal for short-term rentals. Known for Grand Park Sports Campus, it draws sports enthusiasts year-round. Unique attractions like Cool Creek Park and exciting events such as the Westfield Rocks the 4th Festival make it a standout destination for tourists. The flourishing short-term rental market presents real estate investors with a promising opportunity for strong rental income, making it one of the best places to invest in Airbnb properties in 2025.
Key STR Metrics:
- Average Gross Yield: 7.4%
- Average Property Value: $665,084 (as of December 2024)
- Average Annual Revenue: $49,153 (past 12 months)
- Average Occupancy Rate: 40% (past 12 months)
- Qualifying Airbnbs: 93 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 100%
Find Airbnbs For Sale in Westfield, IN →
11. Evansville, IN
Evansville, IN offers exciting opportunities for real estate investors in the short-term rental market. Known for its historical charm and vibrant culture, attractions like the Mesker Park Zoo and Botanic Garden, the Evansville Museum of Arts, and regular events like the West Side Nut Club Fall Festival entice tourists year-round. The city is home to the Evansville Otters baseball team, further boosting rental income potential. With thriving tourism and affordable vacation homes, Evansville is one of the best places for investing in vacation rentals, promising a good return for Airbnb hosts and investors alike.
Key STR Metrics:
- Average Gross Yield: 7.1%
- Average Property Value: $303,709 (as of December 2024)
- Average Annual Revenue: $21,504 (past 12 months)
- Average Occupancy Rate: 42% (past 12 months)
- Qualifying Airbnbs: 137 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 120%
Find Airbnbs For Sale in Evansville, IN →
12. Fort Wayne, IN
Fort Wayne, IN is a burgeoning hub for short-term rental properties, making it one of the best places for real estate investing in 2025. With vibrant attractions like the Fort Wayne Children's Zoo and expansive Foellinger-Freimann Botanical Conservatory, it draws numerous tourists and visitors. Sports enthusiasts can catch action at Parkview Field, home to the TinCaps baseball team. The city's thriving tourism scene, coupled with high rental income potential, offers real estate investors a good return and stable cash flow from vacation homes and Airbnb rentals.
Key STR Metrics:
- Average Gross Yield: 6.6%
- Average Property Value: $347,781 (as of December 2024)
- Average Annual Revenue: $22,995 (past 12 months)
- Average Occupancy Rate: 41% (past 12 months)
- Qualifying Airbnbs: 202 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 76%