What Properties Are ideal For Vacation Rental?
It’s official: vacations are back in style, and there’s a lot of demand for them. People have searched for phrases like “rental near…” more than twice as much in the last year, according to Google data, indicating that the urge to travel is higher than ever.
Furthermore, many travelers are demonstrating an increased interest in the outdoors, and they want access to facilities such as kayaks, bikes, and even boats, which vacation rentals are ideally prepared to provide.
All of this suggests tulum real estate for sale is now is an excellent time to purchase a holiday rental. After all, during the next few years, the business is expected to rise to almost $63 billion in size.
So, if you’re considering buying a vacation house, the next step is to figure out which places provide the best returns. Here are the 12 best areas to buy a vacation property in 2022, ranging from an effervescent mountain town in Tennessee that borders the country’s most-visited national park to a lesser-known (for now) beach retreat in south Texas.
How We Selected the Best Investment Property Locations
The data in the By the Numbers section is based on a mix of proprietary and public data, but the three key metrics we considered are:
- Measure vacation rental performance across the United States to see where more bookings lead to better median revenue.
- To determine listing prices, use Zillow’s 2021 median home value.
- Estimated annual expenses for running a vacation rental (about 30% of total revenue) to aid in calculating cap rate
- With an Evolve collaboration, we also assessed a property’s ability to beat market expectations. The Evolve Difference is demonstrated below, demonstrating how we assisted some of our top owners in maximizing income in each area, resulting in them greatly exceeding the market’s predicted revenue.
1. Pennsylvania’s Pocono Mountains
The Poconos top our ranking as the greatest spot to buy a vacation rental for the fourth year in a row. This hilly, lake-dotted region in northeast Pennsylvania, which also ranks first on our list of best places to buy a lake house, is a perennial lure for East Coast city dwellers yearning for a holiday in nature.
From hiking to Bushkill Falls (dubbed “The Niagara of Pennsylvania”) and water sports to skiing, snowboarding, and snow tubing, the Poconos offer year-round fun for families and outdoor enthusiasts. In addition, vacation rental-friendly villages like Tobyhanna, Pocono Lake, and Albrightsville provide small-town charm.
The caveat: due to the area’s continued popularity, our Real Estate Services (RES) staff reports that homes seldom stay on the market for long and frequently sell for more than their asking price, particularly around and around Lake Harmony.
As a result, the Poconos are best suited to investors who have enough cash on hand to make offers on homes within one to three days of them being posted. Nonetheless, with a projected 14.7 percent cap rate — the ratio of a property’s net income to its market value, and a critical metric of success — you should be able to swiftly recoup your investment and begin earning profit.
2. Virginia’s McGaheysville
McGaheysville is a small town in Virginia that is considered a “hidden treasure.” Shenandoah National Park, which contains a stretch of the legendary Appalachian Trail, fields of wildflowers, and flowing waterfalls, is accessible from the neighborhood. Vacation rental owners will have two busy seasons to assist them meet their occupancy objectives because visitors come to the area for both summer and winter enjoyment.
McGaheysville’s proximity to Massanutten Resort is a key draw to the area, according to our RES team, luring visitors looking for a snug ski property to call home. Fire pits, hot tubs, and thoughtful winter extras (think sleds, warm blankets, and hot chocolate) are all essential features for mountain residences that can help you get five-star evaluations.
Bonus: while the median revenue in McGaheysville is over $49,000 per year, some Evolve owners have made nearly $113,000 in the same time span.
3. Tennessee’s Sevierville
Sevierville is situated in the shadow of the Great Smoky Mountains. Because of the 12.1 million visitors who visit the national park each year, those who buy a vacation rental in this location are well-positioned to meet their occupancy goals.
The region includes dozens of sought-after tourist activities, ranging from Ripley museums and mini golf to a mountain coaster and Dollywood, in addition to the magnificent performances Mother Nature puts on here (we’re talking breathtaking fall foliage and synchronous fireflies).
In Sevierville, spacious cabins perform well, and while the median yearly revenue for vacation rental owners stands around $51,000, we’ve seen some Evolve owners earn nearly triple that during the same time period.
Oh, and if Sevierville doesn’t have the appropriate property for you, you may easily widen your search to Gatlinburg and Pigeon Forge. Both are still considered to be among the greatest places to buy a vacation rental, and according to our RES team, all three markets — and their respective accomplishments — overlap rather substantially.
4. North Carolina’s Bryson City
In Bryson City, a place that still feels a little unexplored, small-town charm meets laid-back mountain vibes. This North Carolina town near the Great Smoky Mountains is a more tranquil alternative to Sevierville and other tourist-heavy Eastern Tennessee destinations.
Bryson City, which has a population of only 1,300 people, features a walkable downtown with local booksellers, murals, galleries, and breweries. The Tuckasegee River runs through downtown and offers opportunities for kayaking, paddleboarding, and fly fishing.
The average listing price for residences in Bryson City is roughly $195,000, making it an excellent choice for first-time vacation rental investors. Smaller cabins, according to our RES team, have the potential to perform well in this market, which means homebuyers may turn a getaway cottage into a short-term rental jewel.
If Bryson City’s inventory is limited, our RES team suggests visiting Maggie Valley, a beautiful area where the Smoky and Blue Ridge Mountains converge.
5. Texas’ Surfside Beach
Surfside Beach is not just high on our overall list of best places to purchase a vacation rental in 2022, but it also takes the top spot for best places to buy a beach property.
It’s easy to see why so many people enjoy escaping to this seaside village: surfing (or boogie boarding), fishing, birdwatching, and eating fresh seafood are just a few of the many activities available.
When looking for homes in Surfside Beach, bear in mind that visitors to the region are looking for easy access to the beach and adjacent eateries. Family-friendly accommodations are very popular in this area, so purchasers should search for ways to increase the number of people who can stay in their rentals.
Branson, Missouri (#6)
Branson, a popular family holiday destination in the Midwest, has a high demand for vacation rentals.
Branson is one of those destinations that can appeal to almost any type of traveler because to its abundance of things to do. Families may visit Silver Dollar City amusement park or Dolly Parton’s Stampede dinner show, while nature enthusiasts can explore the picturesque Ozark Mountains or tour caves.
Branson might be a terrific place to start into the investing market, with a median home price of just under $180,000 and a possible 8.4% cap rate — and it’s the most cheap spot on our list of top places to buy a vacation rental in 2022.
According to our RES team, Branson is another area where homes with a bigger room count can get the most reservations. Larger properties are typically more expensive than the median list price, but they may offer greater earning potential, which is a crucial factor to consider when navigating this market.
Waldport, Oregon (#7)
Waldport, located on Oregon’s central coast, may make visitors feel as if they’ve stumbled upon one of the Pacific Northwest’s best-kept secrets. It’s the ideal location for visitors to see the finest of Oregon, from whale watching to exploring the sweeping sand dunes to climbing in the dramatic coastal highlands.
While the median annual revenue for Evolve is little over $41,000, some owners have made as much as $77,000 in that time. Add nature-centric amenities like trail maps, binoculars, and birding guides (there are over 400 species in the area) to your vacation rental property to make it stand out – and turn first-time visitors into regular visitors.
North Conway, New Hampshire is number eight.
North Conway is a well-known ski community in New England, with roughly 13 local ski areas. This New Hampshire location is in the center of the White Mountains region, attracting nature lovers all year to swoosh down the slopes, hike, golf, fish, and enjoy some of the best leaf peeping in the country.
All of this makes North Conway an ideal destination for vacation rental owners looking to give a home base for outdoor enthusiasts, families, or groups. It’s also ideal for city travelers looking for a private, luxurious vacation, such as those traveling from Boston.
When looking to buy in this location, our RES team recommends looking for holiday homes near the slopes or with luxury facilities such as fireplaces and hot tubs.
Ruidoso, New Mexico (#9)
Ruidoso is a perennial fixture on our annual best places to buy list, with a good combination of mountain-town enchantment and Southwestern style. The Sierra Blanca mountains around this charming community in New Mexico, making it a popular destination for ski vacationers.
Beyond winter activities, Ruidoso provides all you need for a pleasant trip, no matter who you are. Casinos, historical buildings, and White Sands National Park, a 275-square-mile sandbox made up of shimmering gypsum crystals, are among the attractions.
The average annual income in Ruidoso is roughly $22,000, although some Evolve owners earn closer to $68,000. Hot tubs, big decks with mountain views, and gaming rooms all add value to remote cabins in this area, attracting eager tourists to your property.
Windham, New York is number ten.
Windham is recognized as the “jewel of the Catskills” because of its abundant wine bars, art galleries, and fine dining restaurants. Windham, located less than three hours north of New York City, is high on our RES team’s list of locations to visit for people looking to get away from the city and experience a luxurious mountain hideaway (making it one of the best places to buy a ski property, too).
When compared to other upstate areas like the Hudson Valley (where typical home values might be a few hundred thousand more) or beachside possibilities like the Hamptons (where the median sale price is $1.2 million), the median list price here is around $500,000, which is competitive. Windham, with a cap rate of 7.1 percent, hits that sweet spot of delivering an affordable vacation into nature while also assisting you in achieving a great return on investment.
11. Alabama’s Gulf Shores
Thousands of years ago, fine quartz grains poured down from the Appalachian Mountains, forming the powdery-soft white sand beaches that are so famous along this desired stretch of Alabama coastline.
Gulf Shores is a popular destination for family holidays, with plenty of activities on and off the beach, such as sunset dolphin excursions, deep sea fishing, and golfing at Kiva Dunes.
For the uninitiated, Gulf Shores (which previously made our list of the top places to buy a beach house) merges seamlessly with neighboring beach town Orange Beach, creating a vacation rental-friendly region with 32 miles of beautiful beaches.
With so much beach, beachfront condominiums — especially those on the sea — are in high demand in Gulf Shores and Orange Beach, and our RES team reports that inventory is scarce. Working with a local realtor who is familiar with the area can assist you in understanding HOA restrictions and locating houses with facilities that your guests will enjoy.
12. Arizona’s Pinetop-Lakeside
Pinetop-Lakeside, as a counterpoint to the desert scenery, often surprises visitors with its expanse of Ponderosa pines, as well as its snowy winters and mild summers.
The Pinetop-Lakeside area is less well-known than other Arizona locations such as Sedona, Scottsdale, or Flagstaff. There are hundreds of lakes to explore and 200 miles of picturesque multi-use paths to hike, as well as family-friendly activities like miniature golf and arcade games.
According to our RES team, the region has a robust real estate market for any property type because of its diverse economy that isn’t solely based on tourism. Arizona is a fantastic state to buy a vacation property in since it has few laws and attracts visitors all year.
Our RES team advises that when looking for a vacation rental in the Pinetop-Lakeside area, cabin-style retreats with a rustic vibe and modern conveniences tend to do best. Renters prefer spacious homes, so if you can afford it, residences with at least three bedrooms can help you accomplish your booking objectives.
Evolve will help you take the next step.
Although purchasing a vacation rental property is a personal decision, you don’t have to go it alone. Our Real Estate Services (RES) team can assist you in taking the next step, whether you’re drawn to one of our tried-and-true hotspots or captivated by the untapped potential of an up-and-comer.
We have the data to help you identify your investment opportunities and financial goals, as well as preferred local real estate agents who specialize in vacation rental purchases and a team of experts ready to manage your property once you’ve closed on your vacation rental and are ready to get started.