Top Airbnb Investment Markets in Alabama

Whether you're an experienced investor seeking new horizons or a beginner ready to dive into the world of real estate investment, these markets offer a plethora of opportunities to diversify your portfolio and maximize your returns. Get ready to embark on a journey of discovery as we uncover the hidden gems of Airbnb investment in Alabama.

Awning's Top Airbnb Market tool makes discovering the finest Airbnb markets throughout the United States effortless. Updated monthly, this comprehensive tool provides rankings and direct links to each market's Airbnb data, empowering you to make well-informed decisions.

Looking to invest in vacation rentals in Alabama? Here are the top locations.

Here are the top Airbnb investment markets in Alabama, each with its unique advantages:

1. Scottsboro, AL - Best for outdoor tourism
2. Gulf Shores, AL - Best for beach vacations
3. Birmingham, AL - Best for city tourism and business travel
4. Florence, AL - Best for arts and history
5. Northport, AL - Best for university community stays and academic visits
6. Montgomery, AL - Best for a blend of business and leisure travel
7. Guntersville, AL - Best for lakeside getaways
8. Mobile, AL - Best for historic charm and cultural tourism
9. Foley, AL - Best for proximity to Gulf Coast attractions
10. Tuscaloosa, AL - Best for university-driven demand
11. Auburn, AL - Best for technology and healthcare industry-driven demand

1. Scottsboro, AL

Located near the scenic Lake Guntersville, Scottsboro holds immense potential for Airbnb investors seeking to capitalize on the growing demand for vacation rentals in the area. This hidden gem attracts outdoor enthusiasts year-round, making it a sought-after destination for those seeking adventure and natural beauty. With a relatively small market size and just 31 available Airbnbs, investors have a prime opportunity to establish themselves as top choices for travelers visiting the region.

From a financial perspective, Scottsboro offers a promising return on investment (ROI) of 15%, with an average daily rate (ADR) of $148 and an occupancy rate of 68%. This translates to a revenue of $28k, making it a lucrative market for investors. Moreover, with an average Airbnb price of $233k, Scottsboro offers an affordable entry point for those looking to invest in real estate.

To make the most of this opportunity, investors eyeing Scottsboro should possess a strong understanding of the local market dynamics and be committed to delivering exceptional customer service to their guests. Given the area’s focus on outdoor activities, investors who can provide unique experiences and thoughtful amenities, such as fishing gear or hiking guides, may gain a competitive edge in attracting and retaining guests. By catering to the specific needs and interests of outdoor enthusiasts, you can position yourself as a preferred choice in this burgeoning market.

2. Gulf Shores, AL

Gulf Shores is a captivating coastal destination known for its pristine white sand beaches, year-round warm weather, and abundant outdoor activities. This popular vacation spot along the Gulf of Mexico attracts visitors throughout the year, making it an attractive market for Airbnb investors.

Gulf Shores offers an enticing ROI of 6%, with an ADR of $196 and a high occupancy rate of 68%. This translates to a potential annual revenue of $34,000, making it an appealing prospect for investors seeking steady rental income.

The average Airbnb price in Gulf Shores is higher than the state average, indicating a strong demand for vacation rentals in the area. Additionally, Gulf Shores’ medium-sized market and approximately 1,360 Airbnbs available shows that there is room for growth and potential for increased revenue in the future.

To succeed in this market, prioritize exceptional guest experiences and cater to the desires of beach-loving vacationers. Offering amenities that enhance the coastal getaway, such as beach gear rentals or convenient access to nearby water activities, can position your property as an attractive choice in this sought-after destination.

In summary, Gulf Shores presents a coastal haven for Airbnb investors, with stunning beaches, a vibrant tourism scene, and enticing financial prospects. With its appealing ROI, high occupancy rates, and ample inventory, Gulf Shores offers a golden opportunity to establish a successful Airbnb investment and capitalize on the allure of this coastal paradise.

3. Birmingham, AL

Birmingham, AL is a city on the rise with a flourishing tourism industry that beckons Airbnb investors. The city is home to popular attractions such as the Birmingham Zoo, the Birmingham Civil Rights Institute, and the Barber Vintage Motorsports Museum,  making it an appealing market for those seeking investment opportunities.

With a ROI of 4%, an ADR of $111, and an occupancy rate of 59%, Birmingham presents a potential revenue of $14,000 annually. The city's large market size of approximately 1,500 Airbnbs offers investors a chance to tap into a growing sector. Moreover, Birmingham is a great option for investors looking for an affordable market, with its average Airbnb price of $200,000.

What sets Birmingham apart is its rapidly growing tourism industry and diverse range of attractions, ensuring a steady stream of visitors year-round. From history enthusiasts exploring the city's civil rights landmarks to families enjoying the interactive activities at the zoo – Birmingham offers something for everyone. This variety of attractions contributes to the city's appeal as a destination, attracting a diverse range of guests and increasing the potential for rental income.

To sum it up, ​​Birmingham, AL, with its vibrant charm and growing tourism industry, presents a compelling opportunity for Airbnb investors. The combination of a large market size, affordable average Airbnb price, and an abundance of attractions make Birmingham an enticing investment option. By leveraging the city's unique appeal and providing exceptional guest experiences, investors can position themselves for long-term success in this dynamic market.

4. Florence, AL

Step into the enchanting world of Florence, AL, an emerging market that is captivating Airbnb investors with its impressive ROI and steady growth in the thriving tourism industry. Boasting an average daily rate of $98 and an occupancy rate of 58.3%, investors can anticipate an annual revenue of $17,000. With a medium-sized market encompassing 115 active Airbnb listings and an average Airbnb price of $153,000, Florence holds great potential for profitable investments.

Investors with a discerning eye for historic properties and a passion for the arts will find Florence particularly appealing. Home to the renowned University of North Alabama, the city draws a vibrant community of students and faculty members who have a deep appreciation for the local arts scene. Florence's architectural marvels and landmark sites bear witness to its rich history, making it an ideal destination for travelers seeking a blend of culture and heritage. Investors who can restore and maintain these treasured historic properties will thrive in this market, catering to the desires of history enthusiasts and those seeking an authentic experience.

Florence, AL presents an enticing opportunity for Airbnb investors in search of a profitable venture. With its rich history, vibrant arts scene, and proximity to popular tourist destinations, Florence is poised to attract a continuous flow of visitors in the years to come.

5. Northport, AL

Northport, AL presents a compelling opportunity for investors seeking to venture into the world of Airbnb rental properties. Situated close to the University of Alabama, this market benefits from the growing demand for short-term rentals in the area.

With an ROI of 17% and a potential revenue of $23,000, Northport offers promising financial prospects for savvy investors. The average Airbnb price in this market stands at $264,000, reflecting the desirability of properties in the area. Although the market size is relatively small, with 93 active Airbnbs, this can work to the advantage of investors as it allows for easier market penetration and a higher chance of securing bookings.

While the occupancy rate of 49% may seem moderate, investors can optimize their earnings by focusing on the ADR of $280. By strategically pricing their rentals and targeting the university community, visiting academics, and those attending events, investors can maximize occupancy and generate consistent income.

Northport's main advantage lies in its location near the University of Alabama, a hub of educational and cultural activity. Investors who understand the needs of students, faculty, and visiting families can tailor their offerings to cater to this specific market. Enhancing the guest experience by providing convenient amenities, study-friendly spaces, and local insights can set your property apart and secure a loyal customer base.

Northport, AL, with its proximity to a prestigious university and a growing demand for short-term rentals, presents an attractive investment landscape for Airbnb investors. With a high ROI, potential for solid revenue, and an advantageous average Airbnb price, this market holds promise for those seeking a strategic entry point into the hospitality industry.

6. Montgomery, AL

Montgomery, AL, stands out as a prime choice for investors seeking a lucrative Airbnb market, thanks to its captivating historic landmarks, array of attractions, and a flourishing blend of business and tourism industries. With an ROI of 10%, investors can anticipate an annual revenue of $12,000. The average Airbnb price in Montgomery is $149,000, which is an accessible entry point for investors looking to make their mark in this thriving market.

Despite its small market size comprising 288 active Airbnbs, Montgomery has a more than moderate occupancy rate of 68% and an ADR of $96. These factors indicate a strong demand for accommodations in the city, creating a favorable environment for investors to maximize their returns. Whether it's history buffs exploring the iconic Rosa Parks Museum or business travelers attending conferences and meetings, Montgomery offers a diverse pool of guests seeking comfortable and convenient lodging options.

Investors venturing into the Montgomery market can benefit from its unique blend of history and business. By understanding the specific needs and preferences of visitors, such as providing easy access to key attractions and offering amenities tailored to the needs of business travelers, investors can establish themselves as sought-after hosts. Attention to detail, exceptional customer service, and a commitment to maintaining attractive properties are essential elements for success in this promising market.

With Montgomery’s rich historical heritage, thriving business sector, and compelling attractions, presents a winning opportunity for Airbnb investors. The impressive ROI, solid revenue potential, and accessibility make Montgomery an attractive destination for those seeking a profitable venture.

7. Guntersville, AL

Guntersville is an idyllic haven for investors seeking a prime opportunity in the Airbnb rental market. Nestled near the serene Lake Guntersville and surrounded by breathtaking natural landscapes, this charming city attracts outdoor enthusiasts with its abundance of hiking trails, fishing spots, and boating adventures. The growing tourism industry and strong demand for short-term rentals further enhance Guntersville's appeal as an investment hotspot.

With an  ROI of 7%, investors can anticipate an annual revenue of $22,000. The average Airbnb price in Huntsville stands at $283,000, reflecting the desirability of properties in this market. Although the market size may be considered small, with 124 active Airbnbs, this presents an advantage for investors looking to establish themselves as premier options in this picturesque locale.

While the occupancy rate of 57% may appear moderate, investors can optimize their earnings through strategic pricing and targeted marketing efforts. Leveraging the ADR of $149, hosts can attract guests seeking memorable outdoor experiences and capitalize on the growing interest in nature-focused getaways.

Gunterstsville’s charm lies in its harmonious blend of natural beauty and recreational opportunities. Investors who can tap into the desires of outdoor enthusiasts and provide an exceptional guest experience will thrive in this market. Offering amenities that enhance the adventure, such as kayak rentals or local trail guides, can set your property apart and establish a loyal customer base.

Gunterstsville’s idyllic location, outdoor wonders, and robust tourism industry, presents an irresistible opportunity for Airbnb investors. With a good ROI, substantial revenue potential, and a higher average Airbnb price, this market beckons those seeking to capitalize on the beauty of nature and create memorable guest experiences.

8. Mobile, AL

Mobile, AL is a top market for Airbnb investors due to its unique blend of history, culture, and natural beauty. The city boasts a rich architectural heritage, with numerous historic homes and buildings that attract visitors from around the world. Additionally, Mobile is home to a thriving arts scene, with numerous galleries, museums, and cultural events throughout the year. Finally, the city's proximity to the popular Gulf Coast beaches makes it an ideal destination for tourists seeking sun, sea, and surf.

Financially speaking, Mobile offers decent ROI for Airbnb hosts. With an average daily rate of $100 and an occupancy rate of 63.7%, hosts in Mobile can expect to earn around $14,000 in annual revenue. While the market size is medium, with 403 active Airbnb listings, the average price of a property remains relatively affordable at $200,000. This makes Mobile an attractive option for investors looking to enter the Airbnb market without breaking the bank.

To thrive in the Mobile market, investors must be prepared to cater to a diverse range of guests – including history enthusiasts, beach lovers, and art aficionados. With its unique blend of history, culture, and natural beauty, Mobile is a top market for Airbnb investors who are looking for a profitable and rewarding investment venture.

9. Foley, AL

Foley, AL is also one of the most favorable markets for Airbnb investors, leveraging its strategic position in close proximity to renowned Gulf Coast beaches and popular attractions. The city's growing population and flourishing tourism industry have contributed to a robust demand for short-term rental accommodations. With a moderate-sized market comprising 107 active Airbnbs, investors can anticipate an ADR of $137 and an occupancy rate of 63%.

With a return on investment (ROI) of 7%, Foley offers a promising financial opportunity for Airbnb investors. Hosts can anticipate annual revenue of approximately $19,000, supported by an average daily rate (ADR) of $137 and a commendable occupancy rate of 63%.

Although the market size is small, with 107 active Airbnbs, this can work to the advantage of investors as it allows for easier market penetration and potentially higher demand for available properties. With a consistent influx of tourists and visitors, Foley offers a reliable and lucrative opportunity for investors to generate passive income through Airbnb rentals.

Investors eyeing Foley should consider the average Airbnb price of $301,000, which indicates a market with potential for solid property values.

Foley's appeal is its close proximity to the Gulf Coast's world-renowned beaches and popular attractions, which translates into a steady influx of visitors seeking sun-soaked adventures and memorable experiences. Moreover, the city's growing population and flourishing tourism industry ensure a sustained demand for short-term rentals, providing a solid foundation for investors to maximize their returns. Investing in Foley, AL not only unlocks the potential for financial success but also grants investors the opportunity to be part of a vibrant and dynamic community.

10. Tuscaloosa, AL

Tuscaloosa, AL is a top market for Airbnb investors due to its strong rental demand from the University of Alabama. With over 38,000 students, the university is a major driver of the local economy and creates a consistent demand for short-term rentals. Additionally, Tuscaloosa has a growing job market, with major employers such as Mercedes-Benz and DCH Health System, which attracts business travelers and relocating professionals. The city's affordable real estate prices also make it an attractive option for investors looking to enter the market.

With a commendable return on investment (ROI) of 8%, Tuscaloosa presents an enticing opportunity for those seeking a financially rewarding venture. Prospective hosts can anticipate annual revenue of approximately $22,000, bolstered by an appealing ADR of $220. Although the occupancy rate stands at 44%, the market size remains small, with only 149 active Airbnbs, providing investors with a favorable environment to establish a presence and potentially capture a larger share of the market.

Success in Tuscaloosa's Airbnb market hinges on meeting the unique needs of university-related guests while delivering exceptional experiences. Ensuring properties are well-maintained, furnished to a high standard, and equipped with amenities that cater to the preferences of academic and professional visitors are critical factors for success. Establishing strong connections with local networks, such as the university and local businesses, can also enhance visibility and attract a diverse range of guests.

Tuscaloosa’s strong rental need from the university and growing job market provide a reliable source of guests for Airbnb properties. Additionally, investors who are looking for affordable real estate prices and a solid ROI will find Tuscaloosa to be an attractive option. With its unique blend of educational excellence, economic growth, and favorable property market conditions, Tuscaloosa stands as a remarkable opportunity for Airbnb investors.

11. Auburn, AL

Auburn University, a prestigious educational institution, is a primary catalyst behind the city's vibrant rental market. The steady influx of students, faculty, and visitors creates a constant demand for accommodations, ensuring a stable and profitable rental market in Auburn for investors. Furthermore, Auburn's diverse economy, anchored by industries such as healthcare and technology, fosters a thriving job market and drives population growth, further fueling the demand for short-term rentals.

Investing in Auburn's Airbnb market can yield a solid ROI of 7%, offering a promising financial outlook for hosts. Potential revenue reaches approximately $18,000 per year, with an ADR of $156 and a respectable occupancy rate of 53%. While the market size is categorized as small, with 207 active Airbnb listings, this can work to the advantage of investors, allowing for easier market entry and potentially heightened demand for available properties.

Auburn's real estate market offers an advantageous landscape for investors. With an average Airbnb price of $285,000, the market demonstrates the potential for robust property values. Moreover, the reasonable pricing of real estate in Auburn compared to other markets makes it an attractive choice for investors aiming to capitalize on promising opportunities without excessive upfront costs.

Achieving success in Auburn's Airbnb market relies on catering to the unique needs of university-affiliated guests while delivering exceptional experiences. Ensuring that properties are well-maintained, tastefully furnished, and equipped with amenities that cater to the preferences of academic and professional visitors are paramount to securing positive reviews and encouraging repeat visits. By establishing a reputation for outstanding guest service and attentiveness, hosts can drive higher occupancy rates and ultimately maximize profitability.

Auburn, AL is a market with a strong rental demand and a growing economy. The promising ROI, potential revenue, and manageable market size make Auburn an attractive destination for investors seeking to capitalize on the city's academic and economic prowess.

Bottom Line

Whether you are an experienced investor looking to expand your portfolio or a newcomer eager to enter the world of real estate investment, Alabama presents a wide array of promising Airbnb investment markets. From the historic charm of Mobile to the beach allure of Gulf Shores and the university-driven demand in Tuscaloosa and Auburn, there's an opportunity to cater to different guest preferences.

Investors should focus on understanding the unique dynamics of each market, ensuring their offerings align with visitor needs, and providing exceptional customer service to outshine the competition and maximize ROI.

By seizing these opportunities, investors can diversify their portfolios, leverage the strong rental demand from universities and tourism hotspots, and benefit from the state's growing economy.