Traveling is truly a great way to de-stress, unwind, and escape the hustle and bustle of daily life. But it’s also a well-known fact that it can be expensive, especially if you didn’t plan it right. Accommodation alone can take up a huge chunk of your budget, so much so when you’re traveling for a few weeks. Thanks to short-term vacation rentals, travelers can cut down on their expenses by a lot, while enjoying some benefits that hotels couldn’t offer.
For property investors, vacation rentals also offer a huge opportunity to make good money as well. The possibilities of earning high returns on investments (ROIs) are endless, especially when you put your money on the right properties.
Check out the best places to buy vacation rental property, and how to find a good investment:
4 Tips to Choose a Vacation Rental Market
Cities with Favorable Regulations
Although vacation rentals are highly beneficial for investors, not all cities accept them as a legal type of accommodation. Some tourism regulatory boards can be strict in implementing their policies, which pose a challenge to both property owners and travelers.
One of the biggest reasons for this is the industry’s impact on existing businesses. A lot of regulators would argue that allowing vacation rentals in their cities would affect the business of hotels, hostels, and other typical accommodation options that are already present for many years.
Travelers would also flock to private residential communities and invade the privacy of residents. This is why if you want to find the best places to buy vacation rental property, you should first look into a city’s regulation on such properties.
In the US, New York, San Francisco, and Santa Monica are some of the cities with the strictest rules for vacation rentals.
While New York may be one of the biggest tourist destinations in the world, it also has some of the strictest laws regarding short-term rentals. In 2011, the New York State Multiple Dwelling Law made it illegal for an apartment to be rented out for less than 30 days without the permanent tenant living in the building at the same time. Advertising a rental was even illegal and was subject to fines of up to $7,500. In 2018, the New York City Council also introduced a bill that requires hosts to disclose details about listings, their identities, and addresses each month.
So, if you want convenience and hassle-free transactions, you should know how to buy a rental property and opt for places with more favorable regulations. Some of the best cities for short-term rentals are Galveston in Texas, Savannah in Georgia, Louisville in Kentucky, and San Diego in California.
Places That Are Highly Dependent on Tourism
A lot of cities in the US depend highly on tourism as a major source of income, and you can expect these places to be more open to different types of accommodation options, including short-term vacation rentals.
Tourism-dependent cities and regions include New Orleans, the Outer Banks, the Great Smoky Mountains, and Panama City. Tourism is also a key economic driver for states like Texas (earned $164 billion in 2018 from tourism), California, Nevada, New Jersey, New York, and Florida.
When looking for the best places to buy vacation rental property, it is always a good option to search in these locations, as they ensure a high ROI year after year.
A lot of travelers love driving to their destinations. They would also prefer to drive in their own vehicles to check one tourist spot after another within the area. With that in mind, here are some of the most drivable destinations that you should consider:
Places Along the Historic Route 66
Every quintessential American road trip should include the historic Route 66, which used to stretch for more than 2,500 miles from Chicago to California. Tourists can drive through the best stretch of this route in New Mexico and Arizona for at least three days. For the more adventurous types, they can travel the entire remaining stretch of this historic road.
California is a must-visit destination for anyone going on a road trip because of the accessibility of its roads that make visiting different areas a lot easier. The Pacific Coast Highway also runs through the state. Known as the Mother Road of America, this road starts in San Diego and stretches to some of the best coastal locations with great views in all of California.
Following this route, you can visit Los Angeles, San Luis Obispo, Hearst Castle, and the iconic Highway One towards the charming town of Monterey. Indeed, every part of the state is worth exploring.
At more than 268,000 square miles, Texas is massive, which makes it definitely worth exploring. A quintessential Texas road trip would cover Austin, Houston, San Antonio, Dallas, and Fort Worth where travelers can enjoy everything from good barbeque to amazing sights. Texas also shares a border with Arkansas, Oklahoma, New Mexico, and Louisiana that are easily accessible by vehicle.
The Great Smoky Mountains
The Great Smoky Mountains has one of the most popular parks in the US, which is known for its diversity of animal and plant life. Located on the border of North Carolina and Tennessee, this region is a haven for adventure travelers because of its sweeping mountain ranges and amazing views that you surely won’t find anywhere else. It also covers the ancient Appalachian Mountains, which is believed to be four times older than the Rocky Mountains.
Vermont is the ultimate drivable destination for anyone who loves to ski. Known for its famous scenic Route 100, the state has a lot of options for vacation rentals, especially those in the Green Mountains. Aside from a skiing resort, it also has a lot of great spots for outdoor activities, good food, and amazing views.
In knowing how to buy rental property, you should find areas where the majority of visitors are driving in rather than flying. For example, it would not be wise to choose Hawaii or Jackson Hole in Wyoming. As you can see, the only convenient way to reach these places is by flying. And, especially with the COVID-19 pandemic, no one wants to have to go to an airport to travel.
Areas Where Short-Term Rentals for Overnight Stays Are a Norm
Vacation rentals are not for every city; that’s for sure. But in some areas, renting a beach house or an apartment has been popular even before short-term rental websites, like Airbnb, came to being.
Since these cities are used to having a huge influx of tourists renting holiday apartments and houses within their communities, you’ll have no problem with regulations over renting out properties. Also, your guests will easily feel right at home knowing that locals are used to having visitors in the neighborhood.
You don’t always have to choose the bigger cities to invest in a rental property. You’ll surely find good options in off-the-beaten-path destinations, and they could be surprisingly beautiful. And, since these places thrive on tourism, they are also more welcoming to visitors, which is a huge advantage for investors like you.
Properties That Are Near Proven Attractions
It’s a no-brainer that if you’re going to visit a place with proven attractions, like beach towns, ski resorts, and national parks, you’ll most likely find several vacation rentals in the area. This means that you will always have a piece of the pie when you buy a property in the area too.
It is best to arm yourself with knowledge on how to buy a rental property for a particular location. So, check if the place has tourist spots that attract a high number of tourists every year. A good example of such a place is the Florida Keys, where people from all over the world flock to experience exciting water activities and a beach life you’ll not experience anywhere else in the world.
Make the Best Decision in Choosing a Rental Investment Market!
You should evaluate the neighborhood where you’d like to buy a vacation rental. Read reviews to get an insight into what other property owners think about the area to make sure that it is what you’re looking for.
Don’t be afraid to negotiate for the price. A lot of owners and developers are willing to offer favorable deals on their properties.
However, always remember that learning how to find investment properties involves visiting the places personally and get a feel of how it’s like to live in them. Living like a tourist yourself—just soaking in the beauty of your surroundings and enjoying a stress-free time with your loved ones—gives you a complete understanding of how you can provide a quality experience to your future guests.
Of course, you should also work with real property experts who can give you valuable insights and guide you through the plethora of options in today’s short-term rental property market. It is always good to have professionals by your side, especially when you are new to this trade.
Avery is the best! She made our buying experience as seamless as it could be. We needed someone who knew the area well, and had lots of relationships to help us get set-up quickly. Felt lucky to have Avery – she’s super-responsive and extremely helpful. I cannot recommend her highly enough!
Avery is a fantastic agent. I live in out of state, and Avery was my eyes, ears, and boots on the ground looking at several properties. She knows her stuff immensely in the area. She goes way beyond the extra mile, is very personable and engaging. You’ll do yourself a disservice not hiring her!
We had the pleasure of working with Avery Carl on an out of state real estate purchase. We had many questions and concerns and she knew all the answers. She is truly an expert in her area. She was easy to reach, helpful and knowledgeable.
Have bought 3 cabins using Avery as my agent. True rock star. Knowledge is unparallelled. Love the confidence and the accuracy. If your goal is to purchase, Avery will tell you if it’s a good deal and why.