Best Places To Buy Vacation Rental Property
With top attractions like the Ski Apache resort, Lincoln National Forest, and White Sands National Park, Ruidoso travelers are undoubtedly seeking escapes into nature. As a result, our RES team says the vacation rentals that perform best here are cabins with hot tubs and well-maintained outdoor spaces with panoramic views.
best places to buy vacation rental property
Gatlinburg is unique because unlike most tourist locations, the area is not swamped with hotels. Hence there is usually less competition between vacation rentals and hotels. However there are certain restrictions if your house is in the city or in a HOA area so make sure you have a knowledgeable local agent to guide you.
Avantstay rates Temecula number two on their list of 25 best places to buy a vacation property in 2022 with an Avantstay investment score of 9.80. However, Temecula prohibits short-term rentals. Short term rental investors should consider Temecula Valley Wine Country, De Luz, and other unincorporated areas of Riverside County.
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Keep reading to discover several important factors when buying a vacation rental, plus a review of some of the best vacation rental markets in 2022 and 2023. [ Thinking about investing in real estate? Register to attend a FREE online real estate class and learn how to get started investing in real estate. ]
Personal use: One of the benefits that motivates individuals to buy a vacation investment property is personal use. Many individuals enjoy being able to visit the property for vacation purposes and also to be able to lend the property to family and friends. It is important to ask yourself if the investment is more important to you personally or financially, as the answer can affect your strategy.
Rental income: If you own property in one of the best vacation rental markets, then perhaps rental income will be produced in a steady stream. However, not all markets will be conducive to creating an income stream that will consistently cover all expenses. If creating cash flow is your primary motivation behind investing in a vacation rental investment property, then it is worthwhile to consider one of the top vacation rental markets or to invest in a traditional rental property.
Appreciation: In addition to rental income, an important factor to consider is property appreciation. Although real estate market predictions are predominantly speculations, investors should keep in mind that many markets can have big price swings in correlation with the current economic landscape. Investors who carefully research markets conducive to property appreciation in the long run will be best prepared to build equity over time.
Taxes: Taxes are a complex vehicle that can be perceived as both an advantage and disadvantage simultaneously. First, those considering investing in a vacation rental should ask themselves if they can afford local, state, and federal property taxes, as well as taxes assessed on any income made from rentals. Some of this financial pressure, however, can be relieved in the form of tax write-offs that apply specifically to vacation rental property businesses.
Risk: Owning even the most lucrative beach investment properties can be subject to risks, such as adverse weather or financial loss from a market crash. Although any type of investment is subject to risk, vacation rental owners should remain mindful of these potential downsides that can turn an investment strategy upside down.
Legality: The best place to own a vacation rental is a location where the property can be rented out to guests legally. Before investing, be sure to double-check local zoning laws, as well as any homeowner association rules as applicable.
Property management: Deliberating on whether or not to hire a property management company is a big decision for any type of rental property. Working with a property manager will be an added expense, but doing so can make your life much easier. Property managers can accomplish a range of tasks, from handling tenant turnover and overseeing cleaning and maintenance services to marketing your listing. Also, allowing a professional to handle these tasks can provide ease of mind, especially if you do not live in the same area as your property.
Partnerships: Working with a partner, including friends or family members, can often open up a lot of opportunities in real estate investing. However, if you want to acquire a vacation investment property with a partner, treat the venture just as you would in business. This includes forming an LLC or another type of entity, as well as having a lawyer create clear contracts.
COVID-19 had a detrimental impact on the world in March 2020, and the vacation rental market was no exception. Any form of travel came to a sudden halt, and almost all of the best places to buy vacation rental properties were either closed or had to implement severe restrictions. As these restrictions slowly began to lift across the world, vacationers rebooked their trips at an alarming rate. Many of the initial declines in the best vacation rental markets happened during March and April but soon began to boom again in May, June, and July. It is clear that as life returns to normal, the most profitable vacation rental locations will rebound quickly in terms of rental rates and occupancy.
Travel in 2020 was changed as vacationers shifted toward driving rather than flying to their locations. As a result, significant increases for vacation rental properties began in areas closer to suburbs and urban areas. The best places to buy a vacation rental property in 2020 were proven to be these close-by, drive-to destinations. Even after the pandemic, properties around 2-3 hours away from metropolitan areas will be popular among travelers.
The qualifications used to determine the best places to buy vacation rental property are, at the very least, subjective. If for nothing else, people choose to vacation in many different parts of the world for many different reasons. What one person may deem the perfect vacation rental, another may completely disregard. However, a few market factors can help investors take a more objective approach to determining the best vacation rental markets. This includes looking at statistics on property price, average rental income, occupancy rates, and cash on cash returns.
Also using data released from AirBnB, the below list reveals the markets that are predicted to be best for short-term rentals in 2023. Although the results were scattered across the U.S. in 2022, in 2023 the top new markets are concentrated in Ohio:
While a great vacation rental investment market does not guarantee success, the best places to buy vacation rental property continue to generate positive signals for investors. Those who understand the benefits of a vacation rental property should at the very least consider the factors mentioned above. A lot goes into determining a bustling real estate market, and while you may not find your perfect investment in one of the cities above perhaps the market factors open your eyes to a similarly positioned area.
There are many ways to define the top locations to own a short-term vacation rental. Since the ultimate goal of any real estate investor is to generate revenue, here we focus on the most profitable places for buying and owning a vacation home in 2023.
Now is the time to invest in a vacation rental. Coming out of the peak season, many investors find that fall is the best time to buy up and invest in short-term rental real estate. With the cap rates in your favor, you can expect a good return on your investment as soon as you make the big purchase.
The most successful short-term rental properties are big enough to accommodate families and large groups and often come with luxury amenities like hot tubs and fire pits. 92% of all vacation rentals in Windham are rated at least 4.5 stars by guests on Airbnb.
Bar Harbor is one of the best places to buy vacation rental property as it has the potential to be a very lucrative market. It has an occupancy rate of 90%, and 40% of all rentals have a minimum night stay of 4-6 nights.
Famous for its country music scene and theme parks such as Silver Dollar City, Branson is busy all year round. Its short-term rentals have more than doubled since 2019, proving it to be one of the top vacation rental markets in 2023.
However, before you decide to become a vacation home investor in any of them, check the local short-term rental legislation before committing. In addition, familiarize yourself with the taxes and fees you will need to pay and research which states have the lowest property taxes for short-term rental investments.
Some property investors may buy a beach house close to ocean shores to enjoy with family and friends during the summer and only rent out the property during the winter months. This strategy allows them to earn rental income at a time when the oceanfront house would otherwise stand empty. Others may do the opposite and turn this investment into their main source of income.
Whether you think of your new beach rental as your main or secondary source of income, you need to be well informed to make the best out of your investment. Keep reading to find out where the best places to buy a beach house are in 2023. 041b061a72