Iowa 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 7 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 Iowa 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 906 Airbnb listings across the state of Iowa 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 7 cities in Iowa 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 7 STR Markets in Iowa
1. Des Moines, IA
Des Moines, IA, is an emerging gem in the short-term rental market, drawing real estate investors with its vibrant attractions and strong rental income potential. The city boasts premier destinations like the Greater Des Moines Botanical Garden and the Des Moines Art Center. Sports enthusiasts flock here for Iowa Cubs baseball games, while the Iowa State Fair draws thousands annually. With thriving tourism, Des Moines offers a good return for vacation rentals, making it one of the best places for Airbnb hosts and real estate investing in the Midwest.
Key STR Metrics:
- Average Gross Yield: 10.0%
- Average Property Value: $282,498 (as of December 2024)
- Average Annual Revenue: $28,317 (past 12 months)
- Average Occupancy Rate: 42% (past 12 months)
- Qualifying Airbnbs: 241 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 54%
Find Airbnbs For Sale in Des Moines, IA →
2. Decorah, IA
Decorah, IA, is a hidden gem for the short-term rental market, attracting tourists with its vibrant blend of culture and nature. Visitors flock to explore the scenic bluffs and trails, the famous Decorah Eagle Cam, and the Vesterheim Norwegian-American Museum. The town's lively arts scene flourishes during the Nordic Fest, while outdoor enthusiasts enjoy Trout Run Trail and the annual Decorah Bike Races. Positioned as one of the best places for vacation homes, Decorah offers real estate investors promising opportunities for rental income and good returns.
Key STR Metrics:
- Average Gross Yield: 8.2%
- Average Property Value: $424,111 (as of December 2024)
- Average Annual Revenue: $34,887 (past 12 months)
- Average Occupancy Rate: 46% (past 12 months)
- Qualifying Airbnbs: 116 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 90%
Find Airbnbs For Sale in Decorah, IA →
3. Dubuque, IA
Dubuque, IA, a hidden gem ideal for short-term rental investments, offers a robust tourism appeal with attractions like the National Mississippi River Museum and Aquarium and stunning views at Eagle Point Park. Home to events like the DubuqueFest Fine Arts Festival and the classic Field of Dreams movie site nearby, it draws both culture buffs and sports enthusiasts, ensuring steady rental income. As Airbnb hosts capitalize on its thriving vacation rental market, Dubuque's promising real estate market presents excellent opportunities for real estate investors seeking good returns.
Key STR Metrics:
- Average Gross Yield: 7.9%
- Average Property Value: $357,534 (as of December 2024)
- Average Annual Revenue: $28,378 (past 12 months)
- Average Occupancy Rate: 39% (past 12 months)
- Qualifying Airbnbs: 145 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 62%
Find Airbnbs For Sale in Dubuque, IA →
4. Iowa City, IA
Iowa City, IA, known for its vibrant arts and culture, offers a lucrative short-term rental market for real estate investors. Home to the University of Iowa, it attracts visitors for sports events, including Hawkeyes games. The city's thriving downtown features attractions like the Old Capitol Museum and annual events such as the Iowa Arts Festival. These draw tourists year-round, making it one of the best places for vacation rentals. Investing in rental property here promises a good return through steady rental income from guests and tourists seeking Airbnb options.
Key STR Metrics:
- Average Gross Yield: 7.7%
- Average Property Value: $441,931 (as of December 2024)
- Average Annual Revenue: $34,157 (past 12 months)
- Average Occupancy Rate: 42% (past 12 months)
- Qualifying Airbnbs: 109 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 166%
Find Airbnbs For Sale in Iowa City, IA →
5. Cedar Rapids, IA
Cedar Rapids, IA, offers an enticing blend of urban and natural attractions, making it a compelling choice for short-term rental investors seeking good returns. Known for its vibrant cultural scene, visitors can explore the Cedar Rapids Museum of Art or enjoy the scenic views at the Cedar Valley Nature Trail. Sports enthusiasts flock to watch Cedar Rapids Kernels baseball games, while annual events like the Freedom Festival draw tourists year-round. For real estate investors, Cedar Rapids presents a burgeoning short-term rental market, promising lucrative rental income from vacation homes.
Key STR Metrics:
- Average Gross Yield: 6.9%
- Average Property Value: $305,261 (as of December 2024)
- Average Annual Revenue: $21,200 (past 12 months)
- Average Occupancy Rate: 41% (past 12 months)
- Qualifying Airbnbs: 127 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 36%
Find Airbnbs For Sale in Cedar Rapids, IA →
6. Clear Lake, IA
Clear Lake, IA is a burgeoning hub in the Midwest for short-term rental investments, attracting tourists with its picturesque lake, vibrant arts scene, and yearly events like the Clear Lake Arts Festival. Home to popular attractions like the Surf Ballroom and All Vets Golf Course, it offers promising opportunities for real estate investors in vacation homes. As a dynamic market for vacation rentals, Airbnb hosts can expect consistent rental income, given the area's appeal to visitors seeking water sports and cultural festivities. With a strong housing market, this is among the best places for STR investment property.
Key STR Metrics:
- Average Gross Yield: 6.4%
- Average Property Value: $622,592 (as of December 2024)
- Average Annual Revenue: $40,058 (past 12 months)
- Average Occupancy Rate: 36% (past 12 months)
- Qualifying Airbnbs: 81 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 86%
Find Airbnbs For Sale in Clear Lake, IA →
7. Arnolds Park, IA
Arnolds Park, IA, nestled along the scenic shores of Lake Okoboji, is a prime destination for real estate investors seeking profitable short-term rental properties. Famous for its historic amusement park and abundant water activities, it attracts a vibrant tourism scene. Renowned events like the University of Okoboji Winter Games and popular attractions offer consistent rental income potential. As one of the best places for vacation rentals, Arnolds Park's thriving short-term rental market promises good returns and cash flow opportunities for Airbnb hosts and tourists alike.
Key STR Metrics:
- Average Gross Yield: 5.8%
- Average Property Value: $831,933 (as of December 2024)
- Average Annual Revenue: $48,392 (past 12 months)
- Average Occupancy Rate: 30% (past 12 months)
- Qualifying Airbnbs: 87 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 90%
