Sedona vs Cottonwood: where should you buy an Airbnb?
Two very different markets 20 minutes apart. Here's how they compare on revenue, prices, taxes, and rules, from an agent who operates five rentals in Cottonwood and helps clients buy in both.
Last updated October 18, 2026
| Sedona | Cottonwood | |
|---|---|---|
| Average annual STR revenue | ~$63.3K | ~$38.2K |
| Occupancy (TTM Sept 2026) | 57% | 57% |
| Average daily rate | $337 | $202 |
| Active STR listings | 3,729 (broader market) | 282 |
| Home prices | Median sale ~$1.08M | Turnkey STRs listed ~$515K–$995K |
| Combined lodging tax | ~13.3% (Yavapai) / 13.9% (Coconino) | ~8–9% |
| Local requirement | $210/unit annual permit, $500K insurance, guest background checks, no events | Annual city registration (Ord. 731), emergency contact, neighbor notice |
| Casita/ADU rentals | Each unit permitted separately; newer detached ADUs limited | Depends on zoning and permitted structures |
| Best for | Premium, view-driven, appreciation and personal use | Cash flow, small units, multi-unit parcels |
Sources: AirDNA Sedona, AirDNA Cottonwood, Redfin Sedona, City of Sedona, Cottonwood Ord. 731. Third-party estimates, not guarantees.
Choose Sedona if…
- You want a premium, view-driven property
- Appreciation and personal use matter as much as cash flow
- You can carry a $1M+ purchase and stricter compliance
Choose Cottonwood if…
- You want lower entry prices and a clearer path to cash flow
- You like small units, casitas, or multi-unit parcels
- You want a lower lodging tax and lighter rules
Don't forget the Village of Oak Creek
If you want red rocks without Sedona city rules, the Village of Oak Creek became far more interesting in 2026, when its master HOA's rental ban was declared unenforceable.
Run both scenarios in the STR return calculator or read our operator's take.
Sedona vs Cottonwood FAQ
Is Cottonwood or Sedona better for an Airbnb?
Sedona earns more per listing on average (about $63.3K vs $38.2K per AirDNA), but costs far more to buy and has stricter rules and higher taxes. Cottonwood often suits investors focused on cash flow and lower entry prices; Sedona suits premium, appreciation-focused buyers.
How far is Cottonwood from Sedona?
About 15 to 25 minutes by car, depending on where you are in each town. Many Cottonwood guests spend their days in Sedona.
Thinking about an Airbnb in Sedona or the Verde Valley?
Book a free consult. We will talk through your budget, timeline, and goals, and give you a straight answer about whether a short-term rental here fits.