Cottonwood, AZ Airbnb investment guide
Cottonwood sits at the center of the Verde Valley, 15 to 20 minutes from Sedona, with a walkable Old Town, tasting rooms, and the Verde River. It is also where we built and run all five of our own Verde Retreats rentals.
Last updated October 18, 2026
Market context
- Active STR listings
- 282
- Occupancy
- 57%
- Average daily rate
- $202
- Avg. annual revenue
- $38.2K
- Turnkey STR list prices seen
- $515K–$995K
Sources:
Third-party estimates for context, not guarantees of any property's performance.
What brings guests to Cottonwood
- Old Town restaurants and Verde Valley wine tasting rooms
- Dead Horse Ranch State Park and the Verde River
- Central base for day trips to Sedona, Jerome, and Clarkdale
- Coconino National Forest trails on the valley's edge
Why Cottonwood works for short-term rentals
Cottonwood appeals to guests who want a home base for the whole valley: wine tasting in Old Town, a day in Sedona, an afternoon in Jerome, a train ride from Clarkdale. For investors it offers a wider range of property types than Sedona, including larger lots that can hold a main house plus a casita or cabin.
This is our home market. All five Verde Retreats are in Cottonwood, with 554 Airbnb guest reviews averaging 4.92 stars, and 4 of 5 rank in Airbnb’s Top 5% or better, including one in the Top 1%. We know which streets photograph well, which ones flood, and which amenities guests actually pay for.
Neighborhoods at a glance
- Old Town and nearby streets. Walkability to tasting rooms and restaurants is a big draw for couples.
- Hillside neighborhoods. Elevated lots can capture valley, Mingus Mountain, and red-rock views.
- Larger parcels on the edges. Room for hot tubs, outdoor living, and sometimes a second unit; some back onto Coconino National Forest.
- Newer subdivisions. Easier to maintain; check HOA rules for rental limits and minimum stays.
What we check before you offer
- Inside Cottonwood city limits (some “Cottonwood” addresses are county)
- HOA rules and minimum-stay requirements
- Zoning and permitted structures for multi-unit strategies
- Floodplain status near washes and the river
- Comparable rentals and drive times to Sedona
Run the numbers
Open the STR return calculator with the Cottonwood preset (9% lodging tax), or work through the "Can I Airbnb this?" checklist.
Cottonwood short-term rental FAQ
Is Cottonwood a good place to buy an Airbnb?
For many investors it is a strong value play. Entry prices are far below Sedona, the lodging tax is lower, and guests use it as a base for the whole valley. AirDNA shows about $38.2K average annual revenue, but well-designed small units can outperform the average; ours hold a 4.92-star average across 554 guest reviews. Results vary and are not guaranteed.
Does Cottonwood require a short-term rental permit?
Cottonwood requires annual city registration under Ordinance 731, plus an Arizona TPT license and Yavapai County Assessor registration. Registration expires December 31 each year.
Can I put more than one rental on a Cottonwood lot?
It depends on zoning, permitted structures, and utilities. Several of our own units share larger parcels, which is a strategy we can evaluate with you parcel by parcel.
Looking at a property in Cottonwood?
Send us the listing. We'll check the rules, the HOA, and comparable rentals, and tell you honestly whether it works as a short-term rental.