Most investors overlook Alabama when it comes to Airbnb investing, but that’s exactly why it’s worth a closer look. This Southern state has year-round tourism and some of the most host-friendly markets in the U.S. Plus, its STR scene has more variety than most investors expect.
According to the Airbnb data platform, SummerOS, these are the best Airbnb markets in Alabama:
- Fairhope, AL: Best overall Airbnb market
- Mentone, AL: Best emerging market
- Birmingham, AL: Best urban market
- Montgomery, AL: Best affordable market
- Dauphin Island, AL: Best coastal market
Heads up: The numbers we cover are based on market averages—but the real opportunity depends on your property. STR performance is hyper-local, which is why SummerOS lets you build STR comp sets tailored to your home and your neighborhood. Use this list as a launchpad, then dive deeper to see what you could actually earn.
How we picked the best Airbnb markets in Alabama
To find the best Airbnb markets in Alabama, we looked at a combination of factors that shape a market's real-world performance and not just impressive numbers on paper. These include:
- Gross revenue at the 75th percentile, which is a strong indicator of how well properties perform over the year.
- Occupancy rate and ADR, again at the 75th percentile, to understand how often properties are booked and how much they earn per night.
- YoY rental growth to assess investor interest and overall market momentum.
- Average property price to balance potential income with entry points.
- Regulatory climates to highlight markets where STRs are welcome and sustainable.
1. Fairhope, AL: Best overall Airbnb market
Fairhope is a standout for investors looking for profitability and long-term growth. Located along Mobile Bay, it brings in visitors looking for small-town coastal charm with a walkable downtown and access to the Gulf Coast.
The STR numbers back this all up. At the 75th percentile, the average gross revenue sits at $43,495, with a healthy occupancy rate of 59% and a strong ADR of $259. Those metrics make Fairhope a consistent performer, especially when paired with 12% growth in active rentals year-over-year.
Yes, Fairhope is on the pricier side, with an average property asking price of $884,632. But that also reflects its stability and desirability, with strong home values and luxury appeal.
2. Mentone, AL: Best emerging market
Mentone might fly under the radar, but it's quietly gaining traction. Tucked into the northeast corner of Alabama near Lookout Mountain, it attracts tourists chasing crisp mountain air and cozy cabin vibes. Its growth is more consistent than flashy, but for investors, that counts for a lot.
From 2023 to 2024 alone, active rentals in Mentone have grown +19%, signaling a wave of new investor activity. Occupancy is solid at 51%, and a modest ADR of $193 still delivers an average gross revenue of $33,219. For a market this small, that’s a promising return.
At just $424,295 for the average property, Mentone is also more accessible than Fairhope. With low saturation and steady demand, this is a good option for investors ready to capitalize on a rising market before it gets crowded.
3. Birmingham, AL: Best urban market
Unlike many metro areas where tight regulations and oversaturation create challenges, Birmingham manages to strike a rare balance of demand and accessibility. As Alabama’s largest metro, it has a strong base of medical, sports, business, and university-driven traffic.
It also has room to grow. Active listings grew 20% from 2023 to 2024, while occupancy rates hover around 59%.
While the ADR is lower at $169, hosts still bring in an average of $30,962 in gross revenue. That steady income, paired with a reasonable property price of $384,421, makes Birmingham a good option for hosts who want predictable bookings without the volatility of a more seasonal market.
4. Montgomery, AL: Best affordable market
If places like Birmingham are still out of your price range, Montgomery is worth a closer look. The average property price sits at just $270,373, making it the most affordable market on this list. Yet despite that low barrier to entry, its occupancy rate is the highest at 68%.
ADR sits at a modest $144, but that strong demand still results in average gross revenue of $29,664. That’s comparable to Birmingham despite significantly lower home prices.
Montgomery is also showing investor interest, with a 23% increase in active listings from 2023 to 2024. This city gives first-time hosts a way in without the steep buy-in of bigger cities, and for those testing the Airbnb waters, this is an easy place to start.
5. Dauphin Island, AL: Best coastal market
Forget about Gulf Shores. For hosts drawn to the coast, Dauphin Island's strong pricing power and laid-back vacation atmosphere are worth a look. With a high ADR of $356, properties here can charge a premium, especially during the summer.
Occupancy sits at 52%, which is typical for seasonal beach towns. But that’s balanced out by strong per-night rates, leading to an average annual revenue of $49,300. Even with only 7% YoY growth, this market remains a solid option for coastal investors who can cater to peak-season travelers.
Properties here cost less than Fairhope but more than the inland markets, with an average asking price of $635,435. Still, for investors specifically targeting Gulf destinations, Dauphin Island continues to stand out as a rewarding market that combines strong rental numbers with an appealing area.
Is Alabama good for Airbnb investors?
If you’re searching for stable, well-rounded opportunities, the best Airbnb markets in Alabama give you plenty to work with. From Fairhope’s premium returns to Montgomery’s budget-friendly numbers, there’s a path for every investor.
But to truly be profitable, you need hyper-local data. That’s where SummerOS comes in: build comp sets that reflect your exact home, street, and goals to unlock insights that generic market data can’t show you. When you’re ready to go from “average” to accurate, we’ve got you.
SummerOS gives you real-time revenue projections, STR underwriting tools, and market insights built specifically for short-term rental investors.
And once you’ve landed on the perfect property to add to your portfolio, SummerOS gives you the tools to manage your investment and make smarter decisions every step of the way. Try SummerOS for free today by filling out the form below!