Where Is the Best Place to Own a Vacation Rental in the US?
One of the booming industries in the world is tourism. People love to travel and discover places. And one of the most important sectors in this industry is vacation rentals.
How much does it contribute to the tourism sector? A study by Grand View Research reveals that the global vacation rental revenue in 2019 amounted to $87.09 billion. And it doesn’t stop there. The vacation rental industry is forecast to grow at a 3.4% compound annual growth rate (CAGR) from 2020 to 2027.
There is a high demand for vacation rentals due to the growing number of both domestic and international travelers. More vacationers also prefer these properties over hotels. A TurnKey Vacation Rentals survey serves as proof, as it reveals that 64% of their respondents choose to stay in vacation rentals than in hotels.
The key to a successful vacation rental business lies in the location. No matter how luxurious your property is (or how much effort you’ve put in to beautify it), it’s less likely to become successful if it’s in a bad location.
We’re here to help you find the best place to own a vacation rental and get off to a good start in starting your business!
How to Identify the Best Vacation Rental Investments
Converting homes to short-term vacation rentals is now a popular trend among real estate investors. After all, these rentals allow them to earn profit quicker than traditional rental units. They are a good investment to make for both newbies and those who are already in the middle of building their portfolio.
Here’s what you need to do to find the best vacation rental investments to have:
Identify the ideal city and neighborhood.
As mentioned earlier, location plays a vital role when it comes to looking for a vacation rental property. It dictates not only the price of the property but also its profitability. It only makes sense to begin your search by identifying a good city to invest in.
When searching for the ideal city, study its demand for short-term rentals. It should have a steady stream of tourists all year long. Typical choices would be near popular beaches, lakes, parks, mountains, and other top tourist destinations.
Don’t forget to check the property prices in the area as well. Go for the affordable ones so that you won’t have any problems with profitability. However, you should still not compromise quality over price. It could be difficult to attract guests with an ugly vacation rental, and you might have to shell out more cash to renovate it. You can check for vacation rental data of particular cities online to further help you with your decision.
However, you shouldn’t focus on the city alone. You should also research deeper into the neighborhood where your potential property is situated. Yes, some cities may be known to easily attract tourists, but not all neighborhoods can be a potential market for vacation rentals. That is why, once you have decided on which city to invest in, you must also carry out a neighborhood analysis to locate the best vacation rental markets in that city.
A neighborhood analysis is a report created by real estate investors that is instrumental in determining a property’s investment potential based on the quality of the neighborhood it is located in. There are several key statistics gathered when putting together a neighborhood analysis, including population growth, crime rates, median income levels, and employment and unemployment rates.
Proceed with the property search.
After you have selected the right city and neighborhood, you can now start with a property search. Set a budget to narrow down your options. Be clear about your investment goals. You can either use an online property finder or seek help from a real estate agent to look for properties that meet your requirements.
Choose a property to buy.
You probably already have a few properties that caught your attention. To make the right decision, you need to do some assessment of the properties and determine which of them offers the highest potential for profit. Learning how much each property will make once opened for business may take some time, but you can use a rental property calculator to make the process easier.
Simply put, a rental property calculator will show you the numbers and tell you if you’re on your way to making a smart investment. Calculating the return on investment (ROI) for rental properties come with different variables. These may include financing terms, methods of leverage used, as well as repair and maintenance costs.
Where Are the Best Places to Own a Vacation Rental Property in the US?
vacation rental property near the beach
We couldn’t stress this enough—when it comes to investing in vacation rentals, you need to focus on the location. This essential factor will have a huge impact on how it will perform in the years to come.
Here are the ideal places to look for the best place to own a vacation rental in the US:
Big Sky, MT
Big Sky is a popular destination for those who love skiing and snowboarding. But that doesn’t mean it’s only open for winter. In fact, this place welcomes tourists all year round. Aside from snow-related activities, guests can enjoy hiking at the Beehive Basin or whitewater rafting on the Gallatin River. The city’s population of 2,500 usually doubles during the peak seasons.
This picturesque city of Tennessee regularly attracts many tourists because of its proximity to the Great Smoky Mountain. Tourism has grown even more after the establishment of the Dollywood theme park that welcomes 3 million visitors every year. Of course, the Great Smoky landscape is still what entices travelers the most.
Fort Bragg, CA
Fort Bragg is the best place to rent a house for someone who is looking for a quiet escape. Upon arriving at this city, tourists will only hear the soothing sound of the ocean waves, breathe in the fresh air, and bask in the beauty of the stars at night. It may be a small town, but thanks to the famous Glass Beach, more and more travelers are visiting this place.
But Fort Bragg is not only about peace and quiet. Visitors may also kayak on the Noyo River or explore the area further by riding the Skunk Train.
Another popular ski destination in the US is Killington, which is known for having the largest ski resort in the East. It’s also a small town, with only 800 or so residents. However, thousands of tourists pour in during winter. The city never runs out of activities to offer, as well. During other seasons, travelers can visit museums, try various drinks at family-friendly breweries, or ride gondolas to take in the beautiful scenic mountain views.
Key West, FL
This southernmost point in the US is well-known for its beaches, historic sites, nightlife, and the display of pastel, conch-style architecture. Despite being struck by Hurricane Irma in 2017, tourism still grew in this city, which welcomed millions of visitors during the same year and the next. The numbers are proof of the city’s potential of having lucrative vacation rental opportunities.
From 2,900 inhabitants, the population in Davenport grew to 5,400 in a decade. The city offers easy access to the Atlantic Shore and Gulf Coast beaches. The competition can be tough here, as there are currently 7,000 vacation rental homes. However, there’s no need to worry. Because of its proximity to Walt Disney World, this city is always a top choice for tourists looking for a place to stay.
Myrtle Beach, SC
If you’re looking for the ultimate coastal town destination in South Carolina, Myrtle Beach is the place to go. It is the crown jewel of the 60-mile long Grand Strand coast. Vacationers here not only enjoy the beach but also play golf, watch shows at the theater, and visit fascinating museums. This attractive city is reported to accept an estimated 14 million tourists every year.
Whittier is a favorite place among nature lovers because it is ideally located between the Great Smoky Mountains and the Nantahala National Forest. A lot of outdoor attractions await visitors. Whitewater rafting and kayaking on the Tuckaseegee River are a must-try! Overall, this city is recognized as one of North Carolina’s hidden gems.
Dauphin Island, AL
This city is tagged as the “Sunset Capital of Alabama” simply because it’s the best place in the state to watch beautiful sunsets. It is a small town with over 1,300 permanent residents. One of this place’s biggest attractions is its bird sanctuary. Thousands of visitors keep coming back for the annual bird migrations here. Apart from watching birds, tourists can also visit the beautiful beaches, as well as public golf courses and parks with ancient oaks. Moreover, vacation rentals are open all seasons.
Kissimmee is part of the Orlando metro area where Walt Disney World, Universal Orlando Resort, and SeaWorld Orlando are set. Since the opening of Disney World, Kissimmee has become a tourist-driven city. Not only is this place a few minutes away from wonderful theme parks, but it’s also accessible to and from the Orlando International Airport and Florida’s east and west coasts.
vacation rental property facing a lake and mountain
When planning to invest in vacation rentals, the first thing to know is where to find the best place to own a vacation rental. The location will play an important role in your business. It will dictate the path where you’re headed: to failure or to success. So, before investing, take the time to study various locations and how they perform.
By knowing what the best places to buy a vacation rental property are, you’re off to a good start to starting your own short-term vacation rental business.
Real estate can be overwhelming, but let Time Business News help. We tackle a variety of topics, from business and technology to travel and health. Get the guidance you need regarding real estate investment by reading our articles now!