There’s been a recent boom in the vacation economy, and consequently, the market has cast a spotlight on short-term rentals. More investors are looking to put their money in vacation rentals for the extra income, the multi-purpose attributes, and the high tendency to appreciate. A great vacation rental investment tip to keep in mind is that, like all other rental properties, these benefits are subject to many things, and the primary reason is location.
In this article, we will be sharing some prime cities and communities that are ideal for short-term rentals. Stick around till the end to find out the best places to invest in vacation rentals.
Gatlinburg is the flagship city for tourism in Tennessee. It’s a cozy town that draws thousands of visitors thanks to its relaxed atmosphere and vibrant nightlife each year. The Anakeesta adventure park is a big draw for families with children or couples looking to explore. There’s something for everyone, from the inviting fire pits to the daring zip lines. Another tourist attraction to Gatlinburg is Skylift Park, home to North America’s longest pedestrian suspension bridge.
With so many thrilling tourist spots, it’s no wonder short-term rentals in Gatlinburg are in such high demand.
Estimated cap rate = 8.6%
The Poconos deserves to be on this list for multiple reasons. The first is that it is super accessible to tourists from three states, New York, Philadelphia, and Pennsylvania. So the market is readily available all year round. That takes us to the second reason to consider the Poconos. During the summer, investors with Airbnb properties near Lake Wallenpaupack enjoy tourists in love with water-based activities. In the winter, visitors can have their fill of snow sports such as skiing on the picturesque mountains near Tobyhanna.
Estimated cap rate =14%
At the southernmost tip of the country lies the Florida Keys archipelago. It is one of the top tourist attraction sites in the country for several reasons, including its year-round sunny weather, spectacular beaches, and exhilarating nightlife. Thanks to the Florida Keys landscape, sports lovers aren’t left out of the equation, with a host of aquatic and terrestrial activities to occupy their time. Also, with an international airport close by, you can count on more income from fewer vacancies.
Estimated cap rate = 6.1%
Our next prime location takes us to the majestic mountain ranges of Georgia. Blue Ridge is a quaint rustic town that attracts many visitors looking for a reprieve in the outdoors. There are many scenic hiking routes for both lovers on an escapade or families on vacation can enjoy. The Chattahoochee National Forest is a popular nearby location that receives thousands of yearly visitors, many of whom need a place to stay. You stand to earn a lot of profit by making your rental property accessible to explorers of the beautiful trails and waterfalls in Blue Ridge.
Estimated cap rate = 13%
Granbury, Texas, is an excellent choice for investing in a short-term rental. It has a central location that makes it accessible to visitors from two major cities in Texas, Dallas and Fort Worth. So it’s ideal for tourists who want to be close to the heart of events but would still like a break from the crowd. But that’s not the only thing that makes Granbury a location worth considering. Its charming lakeside views, vibrant events, and proximity to cultured activities such as theater all play a part in attracting guests.
Estimated cap rate = 11%
Another great place to buy a vacation rental is Arizona’s very own Lake Havasu City. The area has many beautiful attractions, such as the famed London Bridge draws both historians and explorers. You can expect a constant stream of visitors, thanks to its goldmine of water-based and hiking activities. It’s the perfect oasis for anyone looking for a weekend getaway or a couple of weeks to recharge.
Moreso, because it’s in Arizona, property owners enjoy relatively lax regulations regarding fees and taxes on short-term rentals.
Estimated cap rate = 9%
There are many reasons investors look to invest in Palm Springs, California. It’s one of the more popular cities in the Coachella Valley, so it is automatically an excellent tourist attraction. Sometimes renters can stay for several months because the city and its vicinity have many activities. Plus, part of what makes Palm Springs such a great choice is its more investor-friendly regulations. The hassle of the fees and rules that come with buying a short-term rental within this location is significantly less when compared to some other areas.
Estimated cap rate = 6.4%
If your target guests are families with relatively young kids or teens, then stick a pin on Kissimmee, Florida, on your map. Locations like Walt Disney World, Gatorland, and the Kennedy Space Center attract millions of tourists each year. Kissimmee is pretty close to the Orlando metro area, so you could put up tourists all year round with the right marketing strategy. A great perk about Kissimmee is its accessibility. Visitors can quickly get to any of the many attractions Florida offers via air, road, or sea.
Estimated cap rate = 7.2%
While there are many perks to owning a vacation rental, location is crucial to consider before deciding to buy. After all, what good is a short-term rental if no one is looking to stay? It would be best if you went to where the market is.
Of course, it’s crucial to also bear in mind that your location is only part of the equation. Other factors like finding the right tenants, accounting for the extra taxes, and frequent maintenance between guests also affect the success of your investment. But you can always work with a professional property manager who can help you maximize your property’s full potential.
About the Author
Nichole Shahverdi is the Director of Marketing for Bay Property Management Group. Prior to taking over the marketing department, Nichole was the Director of Sales & Leasing, working daily with investors and property owners to help them maximize investment profits.