Kentucky 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 11 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 Kentucky 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 2,629 Airbnb listings across the state of Kentucky 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 11 cities in Kentucky 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 11 STR Markets in Kentucky
1. Campton, KY
Campton, KY, nestled in the scenic Red River Gorge, is emerging as a prime location for real estate investors seeking lucrative short-term rentals. This charming town attracts tourists with its breathtaking landscapes, numerous hiking trails, and popular rock climbing spots. Notable attractions like Natural Bridge State Resort Park and the Daniel Boone National Forest draw outdoor enthusiasts year-round. The vibrant tourism scene ensures a steady stream of visitors, making it one of the best places for investment property, promising good cash flow and rental income for Airbnb hosts.
Key STR Metrics:
- Average Gross Yield: 19.9%
- Average Property Value: $212,245 (as of December 2024)
- Average Annual Revenue: $42,340 (past 12 months)
- Average Occupancy Rate: 39% (past 12 months)
- Qualifying Airbnbs: 110 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 126%
Find Airbnbs For Sale in Campton, KY →
2. Williamstown, KY
Williamstown, KY is an enticing destination for real estate investors eyeing the short-term rental market. Home to the famous Ark Encounter, a massive attraction drawing tourists year-round, this charming town offers a unique opportunity for vacation homes and Airbnbs. As an Airbnb host, you can capitalize on major events like local festivals and the nearby Kentucky Speedway races. With a promising housing market, investing in short-term rental properties here promises strong rental income and a good return on investment.
Key STR Metrics:
- Average Gross Yield: 14.7%
- Average Property Value: $370,593 (as of December 2024)
- Average Annual Revenue: $54,597 (past 12 months)
- Average Occupancy Rate: 48% (past 12 months)
- Qualifying Airbnbs: 110 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 179%
Find Airbnbs For Sale in Williamstown, KY →
3. Stanton, KY
Stanton, KY offers enticing opportunities for real estate investors exploring the short-term rental market. Nestled near the stunning Red River Gorge and Natural Bridge State Park, this town is a hotspot for tourists seeking outdoor adventures. With the housing market showing promise, investing in vacation homes here can deliver good returns. Visitors are drawn to local events like the Powell County Fair and can enjoy hiking, rock climbing, and nature sightseeing. For Airbnb hosts, the consistent tourism flow ensures a steady rental income, making Stanton one of the best places for short-term rental properties.
Key STR Metrics:
- Average Gross Yield: 13.8%
- Average Property Value: $256,895 (as of December 2024)
- Average Annual Revenue: $35,435 (past 12 months)
- Average Occupancy Rate: 37% (past 12 months)
- Qualifying Airbnbs: 145 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 53%
Find Airbnbs For Sale in Stanton, KY →
4. Frankfort, KY
Frankfort, KY, a hidden gem ideal for short-term rental properties, promises robust rental income for real estate investors. As the state capital, Frankfort captivates tourists with attractions like the Kentucky State Capitol and Buffalo Trace Distillery. The thriving tourism sector sees an influx of visitors for events like the Kentucky Bourbon Festival, making it a lucrative spot for vacation rentals. With its rich history and vibrant cultural scene, Frankfort ranks among the best places for real estate investing, offering good return and cash flow potential.
Key STR Metrics:
- Average Gross Yield: 12.8%
- Average Property Value: $324,260 (as of December 2024)
- Average Annual Revenue: $41,427 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 125 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 135%
Find Airbnbs For Sale in Frankfort, KY →
5. Bardstown, KY
Bardstown, KY, known as the "Bourbon Capital of the World," is a prime destination for real estate investors seeking profitable short-term rental properties. With its historic charm and vibrant bourbon distillery tours, it attracts countless tourists annually. The city's key attractions include My Old Kentucky Home State Park and the annual Kentucky Bourbon Festival, drawing visitors from far and wide. Investors can expect good rental income and cash flow from Airbnbs, as Bardstown's growing short-term rental market offers enticing potential for those exploring vacation rentals.
Key STR Metrics:
- Average Gross Yield: 11.6%
- Average Property Value: $359,115 (as of December 2024)
- Average Annual Revenue: $41,792 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 91 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 65%
Find Airbnbs For Sale in Bardstown, KY →
6. Louisville, KY
Louisville, KY is a vibrant destination perfect for short-term rental investing, boasting attractions like the Kentucky Derby, Louisville Slugger Museum, and the Urban Bourbon Trail that draw millions of tourists annually. The city's lively arts scene and events such as the Forecastle Festival entice visitors year-round. With a strong sports culture, including the Louisville Cardinals, and active tourism, the short-term rental market offers promising rental income potential. For real estate investors seeking good returns and cash flow, Louisville's vacation homes present a lucrative opportunity.
Key STR Metrics:
- Average Gross Yield: 10.8%
- Average Property Value: $389,559 (as of December 2024)
- Average Annual Revenue: $41,944 (past 12 months)
- Average Occupancy Rate: 40% (past 12 months)
- Qualifying Airbnbs: 1,017 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 88%
Find Airbnbs For Sale in Louisville, KY →
7. Paducah, KY
Paducah, KY, is a gem for real estate investors eyeing the short-term rental market in 2025. Known for its vibrant arts scene, the National Quilt Museum, and the historic floodwall murals, it offers a rich cultural experience for tourists. The city's proximity to the Ohio River and annual events like the Lower Town Arts & Music Festival make it a top vacation destination. Real estate investors can capitalize on the booming tourism by owning vacation homes or Airbnb properties, promising good returns and rental income amidst a dynamic housing market.
Key STR Metrics:
- Average Gross Yield: 9.2%
- Average Property Value: $276,082 (as of December 2024)
- Average Annual Revenue: $25,367 (past 12 months)
- Average Occupancy Rate: 38% (past 12 months)
- Qualifying Airbnbs: 97 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 137%
Find Airbnbs For Sale in Paducah, KY →
8. Covington, KY
Nestled along the Ohio River, Covington, KY is a vibrant destination for real estate investors eyeing the short-term rental market. This charming city, known for its historic architecture and rich arts scene, entices tourists with attractions like the Devou Park and MainStrasse Village. Proximity to Cincinnati allows guests to enjoy sporting events like Reds baseball while reveling in local festivals such as Oktoberfest. For Airbnb hosts, Covington promises strong rental income potential, making it one of the best places for vacation rentals and investment property opportunities in 2025.
Key STR Metrics:
- Average Gross Yield: 9.2%
- Average Property Value: $296,244 (as of December 2024)
- Average Annual Revenue: $27,192 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 139 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 88%
Find Airbnbs For Sale in Covington, KY →
9. Lexington, KY
Lexington, KY is a prime spot for short-term rental property investment, drawing guests to its charming Bluegrass landscape. Known as the Horse Capital of the World, Lexington offers attractions like the Kentucky Horse Park and Keeneland Race Course, enticing tourists all year. The city's vibrant downtown hosts cultural events and boasts a lively food scene. Proximity to the University of Kentucky brings in sports enthusiasts, ensuring vacation rentals see consistent demand. With its flourishing tourism, real estate investors can enjoy a strong cash flow and good return in Lexington's rental market.
Key STR Metrics:
- Average Gross Yield: 7.5%
- Average Property Value: $478,616 (as of December 2024)
- Average Annual Revenue: $35,952 (past 12 months)
- Average Occupancy Rate: 42% (past 12 months)
- Qualifying Airbnbs: 598 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 58%
Find Airbnbs For Sale in Lexington, KY →
10. Elizabethtown, KY
Elizabethtown, KY, a gem for real estate investors, offers a vibrant short-term rental market with its rich history and key attractions like the Brown-Pusey House and Freeman Lake Park. Known for its annual Heartland Festival and proximity to the Bourbon Trail, it entices tourists seeking unique vacation homes. The city's thriving tourism sector offers guests sports excitement with the Ft. Knox Gold and the new Sports Park. Investing in Elizabethtown's STR properties promises a good return and solid rental income through platforms like Airbnb.
Key STR Metrics:
- Average Gross Yield: 7.5%
- Average Property Value: $368,458 (as of December 2024)
- Average Annual Revenue: $27,618 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 81 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 123%
Find Airbnbs For Sale in Elizabethtown, KY →
11. Bowling Green, KY
Bowling Green, KY, stands as a compelling destination for short-term rental investors, offering a vibrant blend of attractions and events. Known for the National Corvette Museum and Lost River Cave, it attracts tourists year-round. The city's lively sports scene, with events at Western Kentucky University, boosts visitor numbers. As an Airbnb host here, you're tapping into a thriving short-term rental market with promising rental income potential. Investing in Bowling Green means capitalizing on its tourism appeal and strong real estate market, ensuring a good return on vacation rentals.
Key STR Metrics:
- Average Gross Yield: 7.3%
- Average Property Value: $408,169 (as of December 2024)
- Average Annual Revenue: $29,899 (past 12 months)
- Average Occupancy Rate: 39% (past 12 months)
- Qualifying Airbnbs: 116 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 78%
