Southwest6.1% avg cap rate

Sedona, AZ

Red rock luxury — Arizona's premier retreat market

Sedona commands some of the highest nightly rates among non-beach STR markets in the US, fueled by luxury wellness retreats, spiritual tourism, world-class hiking, and exceptional red rock photography backdrops. The drive-to market from Phoenix (2 hours) and Las Vegas (4 hours) sustains year-round demand. Sedona enforces a strict short-term rental licensing process through the City of Sedona.

6.1%
Avg Cap Rate
Net operating income / price
65%
Avg Occupancy
Annual average
$545
Avg Nightly Rate
All property types
$825K
Median Price
STR-viable properties

Estimated Annual Performance

Gross rental revenue
65% occ × $545/night
$129,301
Est. operating expenses
Mgmt, cleaning, supplies, insurance (~40%)
– $51,720
Est. net operating income
Before mortgage & depreciation
$77,581
At median price
Implied cap rate
9.4%

* Estimates based on market averages. Individual property performance varies. Always run a full underwriting analysis.

Why Investors Choose Sedona

Among highest ADR for non-coastal STR in the US
Wellness and spiritual tourism drives premium longer stays
Red rock views add 25-40% premium on nightly rate
Strict city STR license required — supply naturally constrained
Peak season: Oct – May (avoids summer heat)
Top property types: Single Family, Luxury Villa, Casita
Primary zip: 86336, 86339, 86351

Market averages, not guarantees. Cap rates, occupancy, and nightly rates are market-wide averages based on active STR listings and historical data. Individual property performance depends on location, amenities, management, and listing quality. Always run a full underwriting analysis before purchasing.

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