Investing in vacation rentals could be a smart choice if you're looking for an investment opportunity that can generate steady income and long-term returns. Not only can it provide a consistent stream of rental income, but it also offers the potential for appreciation in property value over time. As the demand for vacation rentals grows, the value of your property may increase, providing you with a long-term investment opportunity. Owning a vacation rental property also allows you to have a place to stay on vacation while also generating rental income when you're not using the property. This can help offset the cost of your own vacation expenses.
With so many locations to choose from, it can be hard to know where to start. In this article, we'll take a look at the best places to buy a vacation rental property in the US, as well as some key factors to consider before making a purchase.
Factors to consider before buying a vacation rental property
Vacation rental properties can be a great investment, but it’s important to do your research and make an informed decision. Before you start looking for a property, there are a few key factors to consider. First, you'll have to consider your budget and how much you can afford to spend on a property. You'll also want to consider the location of the property, as well as the local real estate market and rental market. Other factors to consider include:
- Location: one of the most important aspects to consider when buying a vacation rental property. Think about what kind of vacation rental property you want to own and where it would be most desirable: a beach house, a property near popular tourist attractions, or in a remote location. The location of your vacation rental property will have a significant impact on its success, so be sure to choose wisely;
- Rental demand: another important factor to consider is the demand for vacation rentals in the area you’re considering. Research the local market and determine the demand for vacation rentals. Are there many vacation rentals in the area, or is there a shortage? Understanding the rental demand will help you determine the potential for success of your vacation rental investment;
- Rental income potential: research rental rates for similar properties in the area and determine what kind of income you can expect to generate. Keep in mind that rental income can vary depending on the season and other factors, so be sure to do your research thoroughly;
- Property management: managing a vacation rental property can be time-consuming and challenging, so it’s important to consider how you will manage the property. A fully integrated Property Management System can be the right solution to control your property and remotely manage every aspect of your business. Our Property Management System is specifically designed to streamline all reservation management operations and handle all aspects of the property, including marketing, booking, cleaning, and maintenance operations with our Property Care App.
- Property maintenance and security: vacation rentals require regular maintenance and upkeep. Before buying a property, consider the maintenance requirements and associated costs. Ensure you have a plan for maintaining the house, including cleaning, repairs, and upgrades. The security of your property is also an important aspect. To ensure your and your guests' safety, you can implement an Access Control System to control the property, streamline access, and allow staff and guests to enter and exit the building with keyless access methods;
- Amenities: offering amenities can be a great way to attract renters and generate more income. Consider what amenities are most desirable in the area and how you can incorporate them into your vacation rental property;
- Competition: research the competition in the area and determine what sets your property apart. What unique features or amenities can you offer that other vacation rentals in the area do not? Understanding the competition will help you market your property and attract renters.
- The property's long-term potential: is it a good investment in the long run, or will it require significant upgrades or repairs in the future? Consider the potential for appreciation and rental income growth over time;
- Personal use: if you plan to use the property for personal vacations as well, consider how this will impact the rental income potential. Will you limit the rental availability during peak vacation times? Additionally, consider the logistics of using the property for personal vacations, including maintenance and upkeep, while you’re not there.
Top locations for vacation rental properties in the US
As we have seen, location is one of the most important factors to consider for a vacation rental investment. Not all vacation rental markets are created equal, and some areas may be better suited for your investment goals than others. So, where are the best places to buy a vacation rental property in the US? According to our research, some of the top locations include:
1. The Gulf Coast
The Gulf Coast is a popular vacation destination for families, couples, and retirees. The region spans from Florida to Texas and includes popular destinations such as Gulf Shores, Alabama, and Panama City Beach, Florida. The Gulf Coast offers warm weather, beautiful beaches, and a laid-back atmosphere that attracts vacationers year-round. High demand and relatively low prices make it a great place to invest in a vacation rental property.
2. Orlando, Florida
Orlando is known as the world's theme park capital, attracting millions of visitors each year to attractions such as Disney World, Universal Studios, and SeaWorld. The city also has a thriving convention and business industry, making it an attractive destination for both leisure and business travelers. Investing in a vacation rental property in Orlando can be profitable, with high occupancy rates and rental income potential.
3. Lake Tahoe, California
Lake Tahoe is a popular vacation destination for outdoor enthusiasts, offering year-round activities such as skiing, hiking, and water sports. The area is also home to several world-class golf courses and casinos. With its stunning natural beauty and recreational opportunities, Lake Tahoe attracts high-end vacationers who are willing to pay a premium for luxury accommodations. A vacation rental property in Lake Tahoe can be a lucrative investment for those looking to cater to the upscale market.
4. Maui, Hawaii
Maui is one of the most beautiful and popular vacation destinations in the world, attracting millions of visitors each year. The island offers stunning beaches, lush rainforests, and world-class golf courses. With a year-round tropical climate, Maui is an ideal location for a vacation rental property. While the initial investment may be high, the potential for rental income and long-term appreciation is significant.
5. Myrtle Beach, South Carolina
Myrtle Beach is a family-friendly vacation destination on the East Coast of the United States. The area offers over 60 miles of pristine beaches and various attractions such as amusement parks, water parks, and mini-golf courses. With its affordable prices and high demand, Myrtle Beach is a great place to invest in a vacation rental property.
6. Park City, Utah
Park City is a ski resort town that attracts visitors from around the world. The area offers world-class skiing and snowboarding, as well as a variety of other outdoor activities, such as hiking and mountain biking. With its picturesque mountain views and luxurious amenities, Park City is a popular destination for high-end vacationers, so investing in a vacation rental property here can be profitable.
7. Cape Cod, Massachusetts
Cape Cod is a popular vacation destination on the east coast of the United States, known for its charming small towns, scenic beaches, and fresh seafood. The area attracts visitors from around the world who are looking for a quintessential New England vacation experience. With its high demand and limited supply of rental properties, Cape Cod can be a profitable location for a vacation rental investment.
8. Savannah, Georgia
Savannah is a historic city with a vibrant arts and culture scene. The city is home to several museums, art galleries and theaters, as well as a variety of restaurants and bars. With its warm climate and southern charm, Savannah is an attractive location for both leisure and business travelers. Investing in a vacation rental property in Savannah can be a profitable venture.
9. Sedona, Arizona
Sedona is a beautiful desert oasis that attracts visitors seeking a unique vacation experience. The area is known for its stunning red rock formations, as well as its spas, art galleries, and hiking trails. With its peaceful and serene atmosphere, Sedona is a popular destination for wellness and spiritual retreats. Investing in a vacation rental property in Sedona can be profitable, with high demand for luxury accommodations and the potential for long-term appreciation.
10. Breckenridge, Colorado
Breckenridge is a ski resort town that attracts visitors from around the world. The area offers world-class skiing and snowboarding, as well as a variety of other outdoor activities, such as hiking and mountain biking. With its picturesque mountain views and luxurious amenities, Breckenridge is a popular destination for high-end vacationers.
Once you've chosen a location and determined your budget, it's time to start looking for the best vacation home investment. By considering factors such as location, demand, and potential for rental income and appreciation, you can make a wise investment in a vacation rental property. One of the best ways to find deals is to work with a local real estate agent with experience in the vacation rental market. You can also search online real estate marketplaces and attend local property auctions to find good deals.