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By Robin Simon, President, Harpoon Capital · About · LinkedIn · Author, The Book on DSCR Loans (Available on Amazon)
The best Illinois markets for real estate investors in 2027 offer entry points from about $137,300 in Carbondale and strong short-term rental potential, led by $34,635 in average annual STR revenue in Rockford and AirDNA scores of 100 in Bloomington and 99 in Peoria. Illinois outside of Chicago is one of the better cash-flow stories in the Midwest, running from the university towns of Champaign and Carbondale to the state capital in Springfield, the manufacturing cities of Rockford and Peoria, and the insurance hub of Bloomington. BiggerPockets puts median home prices at up to $208,400 in Bloomington, and the “rent-to-price ratios” sit between roughly 0.48% and 0.60% a month, which is about as good as it gets for markets with this much employment behind them. Investors buying here typically finance with Illinois DSCR loans, which are qualified primarily based on the property rather than the borrower's personal income, and the “DSCR Ratio” on a single-family rental in these cities often clears 1.00x with room to spare.
This breakdown uses market data collected as of October 2026, the most current snapshot available heading into next year's buying season. If you're evaluating a purchase in the final months of 2026, keep in mind that your first full year of rental income, appreciation, or short-term rental revenue lands in 2027 regardless of when you close. A deal you underwrite today is already a 2027 investing decision, just one made with the freshest data available right now.
Illinois has no statewide short-term rental license, but stays of fewer than 30 days carry the state Hotel Operators' Occupation Tax (6% of 94% of gross receipts, or about 5.64%), and since July 1, 2025 hosting platforms such as Airbnb and Vrbo that meet the state's “re-renter” definition are subject to the tax as well (Sales Tax Institute summary of Illinois Department of Revenue guidance). Since July 1, 2026, a platform that meets the state's $100,000 remittance threshold is treated as the hotel operator and files the tax itself, so hosts who rent only through such a platform no longer need to register with the state, while hosts who also take direct bookings still register and file for those stays. Cities layer their own hotel taxes on top, from 5% in Rockford to 9% in Carbondale, and their own STR rules, which range from almost nothing in Springfield to a special use permit for investor-owned rentals in Peoria and an on-site operator requirement in Carbondale. Additionally, the Town of Normal, which shares a metro area and an AirDNA submarket with Bloomington, voted in 2025 to ban new STRs in its single-family and R-2 mixed-residence zones, so the town line matters a great deal in that market.
One pattern shows up in Redfin's search data, which tracks home searches rather than actual moves: Chicago buyers are the top inbound source for Rockford (a net 827), Peoria (195) and Champaign (54), so the state's rental markets are being fed in part by buyers priced out of the Chicago area. Redfin's “Compete Scores” run from 90 in Springfield (“most competitive”) and 89 in Rockford down to 14 in Carbondale (“not very competitive”), so the right offer strategy depends a lot on the city.
Below, we break down six Illinois markets worth watching, using current data from Zillow, Redfin, BiggerPockets, and AirDNA.
Note: Home price appreciation and rent-growth figures below come from Redfin's median sale price data and BiggerPockets' Market Finder, which use different methodologies and can vary from one another; BiggerPockets' appreciation figures (2.31% to 9.84%) and Redfin's recent price changes (-10.4% to +7.5%) do not always agree, so treat them as directional. BiggerPockets figures cover the metro named on each page, including Carbondale–Marion and Champaign–Urbana. Redfin shows no migration data for Carbondale, Springfield or Bloomington. All six AirDNA figures are submarkets of its Illinois Area market, and the Bloomington figures cover Bloomington and Normal together.
Saluki students and Shawnee cabins
Photo: Veeresh dandur, CC BY-SA 3.0 (cropped)
Carbondale is the home of Southern Illinois University in the far south of the state, with the lowest prices in the article, the fastest BiggerPockets growth and an STR market built on cabins in the hills and forests nearby. It is also the slowest sales market on this list by a wide margin, so it rewards a patient buyer who negotiates hard.
BiggerPockets points to education, healthcare and retail, with Southern Illinois University supplying a steady pool of student and staff renters, and the metro's growth stats are the strongest in the article. However, Redfin's figures show a soft sales market in the city itself, with prices down and homes sitting for months, and First Street data rates the heat risk as “major” and the wildfire risk as “moderate” (29% of properties). On the STR side, the city code (§5-17-3) requires a Vacation Rental Unit license from Building and Neighborhood Services for stays of 24 hours to 29 days, renewed each September 1 after an inspection, and the operator (the owner or a lessee) must live on the property, so investor-owned whole-home STRs inside city limits are effectively off the table. Stays also carry a 9% city hotel/motel tax, the highest in the article, while the cabins that drive AirDNA's numbers typically sit outside the city in the surrounding hills, where county rules apply.
The Carbondale submarket posts an AirDNA score of 98/100, with Investability (90), Seasonality (89) and Rental Demand (86) leading, Revenue Growth (78) next, and Regulation (69) the “soft spot.” Annual revenue per listing averages $30,882 (up 2.1% year-over-year), with an average daily rate of $163.85 (up 8.1%), the highest on the list, and occupancy of 56% (down 3.4%). Total active listings sit at 96, up 20.0%, and the top performers are cabins, such as a four-bedroom log cabin with a game room ($92K a year at 62% occupancy) and a secluded cabin with a hot tub ($72K at 81%).
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Carbondale and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · AirDNA Market Data↗
Investor Takeaway: Carbondale offers the lowest prices and the fastest BiggerPockets growth in Illinois, with a cabin-driven STR market nearby. Investors should generally negotiate hard (homes are selling well under list), buy near campus for the long-term rent, and treat cabin properties outside the city as a separate, amenity-driven STR play, since the city itself requires an on-site operator.
Lincoln Land at landlord-friendly prices
Springfield is the state capital, with a tenant base anchored by state government and Memorial Health, a steady stream of visitors to the Lincoln historic sites and one of the lightest STR rulebooks on this list. It is a slow-growth market with a solid rent ratio and the fastest-moving sales on this list, which is often exactly what a cash-flow investor is looking for.
BiggerPockets points to government, healthcare and education, with the State of Illinois and Memorial Health among the major employers, which gives Springfield one of the more recession-resistant tenant bases in the state. However, the population is shrinking slightly, so rent growth is likely to stay modest, even as buyers compete hard for what comes on the market. On the STR side, Springfield has no short-term rental license, permit or registry (BNBCalc), so the main requirements are the state hotel tax and the city's 8% hotel/motel tax (City Code §100.26).
The Springfield submarket posts an AirDNA score of 97/100, and AirDNA lists it among its “Best Places to Invest 2026,” with Investability (97), Rental Demand (95) and Seasonality (91) leading, and Revenue Growth (68) and Regulation (58) the “soft spots.” Annual revenue per listing averages $28,472 (up 3.6% year-over-year), with an average daily rate of $135.75 (up 8.1%) and occupancy of 64% (down 3.6%). Total active listings sit at 340, up 22.3%, the fastest supply growth in the article, and large historic homes carry the top end, such as a nine-bedroom whole-house rental ($189K a year at 85% occupancy).
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Springfield and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Springfield STR Guide↗ · AirDNA Market Data↗
Investor Takeaway: Springfield offers the most competitive sales market in Illinois, a solid rent ratio, a government-backed tenant base and one of the lightest STR rulebooks in the state. Investors should generally move quickly on well-priced homes, buy for the long-term rent, and watch the fast-rising STR supply before counting on nightly income.
Rock-solid ratios and Chicago spillover
Rockford sits on the Rock River about 90 miles northwest of Chicago, with the best rent ratio in the article, the largest share of homes selling over list and an STR market that earns the most per listing. It is the market where Chicago buyers are looking hardest, and the competition shows.
BiggerPockets points to healthcare, education and manufacturing, with Mercyhealth and Rockford Public Schools among the major employers, and Redfin search data (April to June 2026) shows Chicago buyers looking at Rockford more than any other metro by a wide margin (a net 827). However, First Street data on Redfin rates the flood risk as “major,” with 6% of properties exposed. On the STR side, Rockford's 2024 ordinance requires an annual permit, renewed through the city's rental registry and applied for by the owner, but no owner occupancy. Hosts need a local contact within 50 miles who can arrive within 60 minutes, guests are capped at two per bedroom (not counting the renters' minor children) and 10 in total, parking is on-site on a hard surface for up to four vehicles (with up to two on the street if the lot cannot fit four), weddings, parties and events are banned, and stays carry a 5% city hotel tax on top of the state tax (BNBCalc).
The Rockford submarket posts an AirDNA score of 96/100, with Investability (99) and Rental Demand (94) leading, Seasonality (84) next, and Revenue Growth (62) and Regulation (62) the “soft spots.” Annual revenue per listing averages $34,635 (up 10.0% year-over-year), the highest on the list, with an average daily rate of $162.07 (up 10.9%) and occupancy of 67% (up 2.4%). Total active listings sit at 379, up 10.2%, and large amenity homes carry the top end, such as an estate with an indoor pool ($298K a year at 57% occupancy), while a one-bedroom listing showing $1 million a year is an obvious outlier to ignore.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Rockford and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Rockford STR Guide↗ · AirDNA Market Data↗
Investor Takeaway: Rockford offers the best rent ratio, the most homes selling over list and the highest STR revenue in Illinois, with Chicago buyers behind it. Investors should generally expect to pay full price or better on well-priced homes, check the flood map for each address, and register any STR with the city before taking a booking.
Thinking About One of These Markets?
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Caterpillar country cash flow
Peoria sits on the Illinois River in the center of the state, with the highest affordability score in the article, prices that are climbing and a near-perfect AirDNA score. It is the most affordable large city on this list relative to local incomes, which is a nice place for a landlord to start!
BiggerPockets points to healthcare and manufacturing, with Caterpillar and OSF HealthCare among the major employers (Caterpillar moved its global headquarters out of Peoria to the Chicago suburbs, announced in 2017, and then to Texas in 2022, but remains a major presence in the area), and Redfin search data (April to June 2026) shows Chicago buyers looking at Peoria more than any other metro (a net 195). However, First Street data on Redfin rates the wildfire risk as “moderate” (7% of properties). On the STR side, every short-term rental needs a $75 city license per unit, renewed by January 31 (BNBCalc). In the city's estate and single-family residential districts, owner-occupied STRs are allowed by right, while non-owner-occupied STRs need a special use, i.e. a Planning & Zoning Commission hearing and a City Council vote, and no more than 1% of developed parcels in a neighborhood can be approved, with each special-use STR at least 1,500 feet from the next. Some districts (R-4 and the West Main frontage district) allow only owner-occupied STRs, guests are capped at six adults, and stays carry an 8% city hotel tax that hosts file themselves, since Peoria has no collection agreement with Airbnb or Vrbo.
The Peoria submarket posts an AirDNA score of 99/100, with Investability (99) and Rental Demand (95) leading, Seasonality (86) next, and Regulation (72) and Revenue Growth (67) the “soft spots.” Annual revenue per listing averages $26,070 (down 0.3% year-over-year), with an average daily rate of $113.80 (up 1.1%), the lowest on the list, and occupancy of 69% (down 0.1%). Total active listings sit at 470, up 2.4%, and large homes carry the top end, such as a 6,000-square-foot four-bedroom ($109K a year at 55% occupancy).
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Peoria and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Peoria STR Guide↗ · AirDNA Market Data↗
Investor Takeaway: Peoria offers the best affordability in Illinois, rising prices and a near-perfect STR score, but investor-owned STRs go through a public hearing and a tight spacing cap. Investors should generally buy for the long-term rent, expect competition for well-priced homes, and check the neighborhood's special-use count before planning nightly stays.
Campus demand on the prairie
Champaign is the larger half of Champaign–Urbana, home of the University of Illinois, with the highest rents on this list, the fastest population growth and a city that has not written STR-specific rules. It is the classic university market, with all of the tenant demand and turnover that comes with it.
BiggerPockets points to the University of Illinois as the main economic driver, along with technology, healthcare and research, and Redfin search data (April to June 2026) shows Chicago buyers looking at Champaign more than any other metro (a net 54). However, the market is generally cooling a bit, with fewer homes selling over list and more price drops than a year ago. On the STR side, Champaign has no STR-specific license or zoning (BNBCalc), but since April 2026 every rental unit, short-term rentals included, must be registered under the city's Residential Rental Registration program with a 24-hour local agent, and stays carry the city's 7% hotel-motel tax on top of the state tax.
The Champaign/Urbana submarket posts an AirDNA score of 84/100, the lowest in the article, with Rental Demand (86) and Investability (83) leading, Seasonality (75) and Regulation (75) in the middle, and Revenue Growth (50) the “soft spot.” Annual revenue per listing averages $25,619 (down 9.6% year-over-year), the steepest drop on the list, with an average daily rate of $138.08 (down 4.8%) and occupancy of 56% (down 5.9%). Total active listings sit at 530, up 0.4%, and the top listings include event-style homes with nightly rates in the thousands that book only a few weekends a year, which are not a guide to a typical rental.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Champaign and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Champaign STR Guide↗ · AirDNA Market Data↗
Investor Takeaway: Champaign offers the highest rents and the fastest population growth in Illinois, with a university that keeps the tenant pool full. Investors should generally buy for the long-term rent near campus, plan for student turnover, and treat STR income as a “bonus” around game days and graduations rather than the base case.
State Farm stability and a perfect score
Photo: Simone Williams, CC BY-SA 4.0 (cropped)
Bloomington and its twin city of Normal sit in the middle of the state along I-55, home to State Farm's headquarters and Illinois State University, with a stable job base and the only perfect AirDNA score in the article. It is not a classic vacation town – the guests here are more likely visiting family, the university or the insurance offices than a beach – but the numbers make a case for it.
BiggerPockets points to insurance, education and healthcare, with State Farm Insurance and Illinois State University among the major employers, which gives the area one of the steadier white-collar job bases in downstate Illinois. On the STR side, Bloomington has no STR license or owner-occupancy rule (BNBCalc), only a 6% short-term rental tax collected under the city's hotel/motel tax and an annual registration in its Rental Property Program ($65 per building, plus $5 per unit in buildings of three or more units). However, the Town of Normal voted in June 2025 to ban new STRs in its single-family and R-2 mixed-residence zones, letting existing rentals there continue through June 30, 2030 and exempting owners who live in the home at least nine months a year, while STRs remain allowed in Normal's multi-family and commercial zones with a town business license. Investors should confirm which side of the town line a property sits on.
The Bloomington/Normal submarket posts a perfect AirDNA score of 100/100, with Seasonality (96), Investability (95), Rental Demand (95) and Revenue Growth (95) all near the top, and Regulation (73) the “soft spot,” which fits Normal's new rules. Annual revenue per listing averages $32,669 (up 13.0% year-over-year), the fastest revenue growth on the list, with an average daily rate of $137.87 (up 5.9%) and occupancy of 71% (up 7.9%), the highest on the list. Total active listings sit at 258, up 2.0%, and destination-style homes carry the top end, such as a 42-acre estate with a pool ($156K a year at 42% occupancy) and a large log cabin with a hot tub ($150K at 59%).
Financing note: Bloomington deals often qualify on TTM actuals or STR revenue projections given the seasonal revenue base, and Harpoon Capital offers industry leading DSCR Loans for properties throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Redfin Housing Market↗ · BiggerPockets Market Finder↗ · BNBCalc Bloomington STR Guide↗ · WGLT: Normal STR Ban↗ · AirDNA Market Data↗
Investor Takeaway: Bloomington offers the only perfect STR score in Illinois, the highest occupancy and the fastest revenue growth, on a stable insurance and university job base. Investors should generally underwrite on trailing twelve-month actuals, buy on the Bloomington side of the town line for STRs, and expect a tighter long-term rent ratio than elsewhere in the state.
| MARKET | AIRDNA SCORE |
ANNUAL REVENUE |
AVG. DAILY RATE |
OCCUPANCY | YOY LISTING GROWTH |
|---|---|---|---|---|---|
| Bloomington/Normal | 100 | $32,669 (+13.0%) |
$137.87 (+5.9%) |
71% (+7.9%) | +2.0% (258 listings) |
| Peoria | 99 | $26,070 (-0.3%) |
$113.80 (+1.1%) |
69% (-0.1%) | +2.4% (470 listings) |
| Carbondale | 98 | $30,882 (+2.1%) |
$163.85 (+8.1%) |
56% (-3.4%) | +20.0% (96 listings) |
| Springfield | 97 | $28,472 (+3.6%) |
$135.75 (+8.1%) |
64% (-3.6%) | +22.3% (340 listings) |
| Rockford | 96 | $34,635 (+10.0%) |
$162.07 (+10.9%) |
67% (+2.4%) | +10.2% (379 listings) |
| Champaign/Urbana | 84 | $25,619 (-9.6%) |
$138.08 (-4.8%) |
56% (-5.9%) | +0.4% (530 listings) |
Source: AirDNA, current as of 2026. Scores and figures reflect each market or submarket as defined by AirDNA and may not correspond 1:1 with city or county boundaries. As of October 2026
A few patterns stand out. Five of the six markets score 96 or higher, which says more about how affordable downstate Illinois is relative to its STR demand than about any one city, and Champaign is the only market where revenue, rates and occupancy all fell. Rockford and Bloomington/Normal lead on revenue growth (10.0% and 13.0%), while Springfield and Carbondale added listings fastest (22.3% and 20.0%), i.e. new hosts are crowding into Springfield, which has the fewest rules, and into the cabin country around Carbondale. Additionally, occupancy runs high across the board, from 56% to 71%, which is unusual for markets with nightly rates this low.
Illinois's real estate landscape offers a strategy for nearly every type of investor:
Market-level data is a starting point, not a substitute for underwriting the specific property, neighborhood and rental strategy in front of you. Illinois taxes short-term stays at the state level and leaves the STR rulebook to its cities, which range from Springfield's light touch to Peoria's special use, Carbondale's on-site operator rule and Normal's single-family ban, so investors should confirm what is allowed at a specific address before they close.
If you are ready to invest in one of these markets, start with our Illinois DSCR loans page.
Sources: Redfin housing market data, BiggerPockets Market Finder, AirDNA market and submarket data (airdna.co), Sales Tax Institute on Illinois hotel tax guidance, WGLT, city codes for Carbondale, Springfield, Rockford, Peoria, Champaign, Bloomington and Normal, and BNBCalc STR guides for Springfield, Rockford, Peoria, Champaign and Bloomington. Data collected as of October 2026, ahead of the 2027 investing season.
Not at the state level. Illinois has no statewide short-term rental license, but stays of fewer than 30 days carry the state Hotel Operators' Occupation Tax, which booking platforms now collect as well, and most cities add their own hotel tax. Since July 1, 2026, hosts who rent only through a platform that meets the state's $100,000 threshold no longer register with the state themselves. Local rules vary: Rockford requires an annual city permit, Peoria requires a $75 license plus a special use for investor-owned rentals in single-family districts, Carbondale requires the operator to live on the property, Champaign requires rental registration, and Springfield has no STR license at all.
No. Out-of-state and first-time investors can buy investment property in Illinois without any license. A DSCR loan qualifies you primarily based on the property itself rather than your personal income or professional credentials, which is part of why it's such a common financing tool for out-of-state buyers.
A DSCR (Debt Service Coverage Ratio) loan qualifies a property primarily based on the property (its rent, value and location) relative to its mortgage payment, rather than the borrower's personal income or tax returns. If the property's projected or actual rent covers the mortgage payment (a DSCR of 1.00x or higher), it's generally easier to qualify, and Harpoon Capital also offers options for deals below 1.00x.
It depends on the side of the town line. Bloomington has no STR license or owner-occupancy rule, only a 6% short-term rental tax and an annual rental property registration, while the Town of Normal banned new STRs in its single-family and R-2 mixed-residence zones in 2025, letting existing ones continue through June 30, 2030, with an exemption for owners who live in the home at least nine months a year. STRs remain allowed in Normal's multi-family and commercial zones with a town business license.
Harpoon Capital's DSCR loan program allows as little as 15% down on qualifying purchases, up to 85% LTV, with cash-out refinances available up to 80% LTV. Exact terms depend on the property, credit profile, and DSCR ratio. Fill out our DSCR Loan Application to see specific numbers for your deal.
Ready to Run the Numbers on an Illinois Deal?
Whether you're eyeing Rockford's rent ratio or STR stays in Bloomington, get a same-day rate and terms with our two-minute DSCR quote form, or explore the full Illinois DSCR Loans Program to see how we qualify the property, not just the borrower.
This article is for informational purposes only and does not constitute investment, legal, or financial advice. Harpoon Capital encourages investors to conduct independent due diligence before making any real estate investment decision.