Vacation rentals are becoming a very popular investment among all types of investors, especially real estate investors. Although they are considered to be short-term rental properties (meaning that tenants rent the property for no more than six months at a time), they can be just as profitable as traditional residential properties and even commercial properties. The key to owning a successful vacation rental— and any type of rental property— is the location. When it comes to vacation rental properties, you’ll want to choose a property located in a city or town that sees a lot of tourists year-round. Here are some of the best places to purchase a vacation rental property.
If you’ve never heard of Sevierville, you’ve probably heard of the Great Smoky Mountains, a popular mountain range and national park in Tennessee. Many travelers love to escape to the mountains at any time of the year, and every year, the Great Smoky Mountains sees over 12 million visitors, plus Sevierville is located right next to the national park.
The median listing price for a spacious cabin in the mountains runs closer to $300,000 (which is still cheaper than real estate in other places), but rental owners bring in around $51,000 per year. You can also search for vacation rentals in the nearby towns of Pigeon Forge and Gatlinburg, also great tourist cities with a lot of nearby attractions.
This small town in Virginia is also known as a “gateway city” to another one of the United States’ national parks: Shenandoah National Park. Nestled in the Appalachian mountains, people from all over travel here to view the beautiful scenery of cascading waterfalls and endless fields of flowers.
Shenandoah National Park is a popular tourist spot all year long, so investing in a vacation rental here is likely to earn you a good bit of cash on the side. The median listing price for a vacation rental here is about $265,000, and property owners bring in an average of $49,000 a year. Many of the properties here offer cozy amenities for tour guests, such as hot tubs and fire pits.
The Poconos in Pennsylvania
The Poconos are a popular mountain range in Pennsylvania that attracts many tourists all year long. Here you’ll find something for everyone: forests for hiking, valleys, lakes and river beaches for water sports, ski runs, and even water parks. The median rental price for a rental property in the Poconos is less than $200,000, and you have the potential to make over $40,000 a year renting your property to tourists.
Just be aware that although properties here are constantly being placed on the market, they don’t stay on the market for long, so it’s important that you have enough funds available to make your offer. If you don’t have your own capital, look into lending companies that offer loans for purchasing property, specifically a company that specializes in vacation rentals.
Major Cities in Florida
The entire U.S. state of Florida is one of the top destinations for tourists all over the world. The city of Orlando alone is home to Walt Disney World, Universal Studios, Sea World, and it’s only about an hour and a half away from the beach. Other popular cities in Florida include Miami, Tampa, Pensacola, and the Florida Keys.
The median listing price for a rental property in Florida is around the average price for homes in the U.S. (~$250,000). Property values in Florida also tend to increase at faster rates than in other places.
There are many other vacation destinations that have rental properties listed for sale. Research the area to get an idea of how many people visit the area each year and what amenities and attractions are nearby. In order to make a profit from your vacation rental property, you want tourists to choose your property to rent.