Where to Invest in Vacation Rentals? (20 U.S. Hot Spots)

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where to invest in vacation rentals U.S. cities

Here are the top 20 places to buy property in the USA:

Gatlinburg, TN Cap rate: 9.2% Median home price: $301,725 Vacation rental occupancy rate: 74%

Gatlinburg is an idyllic destination for those wishing to explore the Great Smoky Mountains and the scenery of Sevier County. With over 14 million visitors descending upon the Smokies in 2021 alone, short-term rental investors can be sure to welcome outdoor enthusiasts throughout the year. There are also various family-friendly attractions within close proximity, making it the ideal location to start a cabin rental business.

Windham, NY Cap rate: 9.2% Median home price: $290,295 Vacation rental occupancy rate: 40%

Based just an hour’s drive from Albany in the heart of the Catskill Mountains, Windham, New York, can be considered one of the best vacation investment property locations for 2023. Many New Yorkers choose Windham as their getaway destination to escape the hustle and bustle of Manhattan. The most successful short-term rental properties are big enough to accommodate families and large groups and often come with luxury amenities like hot tubs and fire pits.

Savannah, GA Cap rate: 9.0% Median home price: $278,598 Vacation rental occupancy rate: 69%

Savannah, Georgia, is full of Southern charm and is renowned for its picturesque Spanish moss and antebellum architecture. Guests of Savannah often make their way to the beautiful Forsyth Park and the waterfront on historic River Street. In 2020, 7.7 million of its 14.3 million visitors were overnight guests, which is expected to increase in 2023. Investors should look to embrace the hospitality of the South and look for properties with architecture that the area has become famous for.

Harpers Ferry, WV Cap rate: 7.88% Median home price: $399,075 Vacation rental occupancy rate: 63%

This quaint West Virginia town sits at the confluence of the Potomac and Shenandoah rivers and is considered one of the best Airbnb markets this year. The Harpers Ferry National Historical Park brings in thousands of visitors annually. With each visitor comes a need for lodging, and with vacation rentals bringing an average monthly revenue of $3,595, it’s a perfect opportunity for short-term rental investors.

Bryson City, NC Cap rate: 7.8% Median home price: $246,333 Vacation rental occupancy rate: 63%

Bryson City is also a popular destination for guests wishing to visit the Great Smoky Mountains National Park, where they’re treated to an abundance of outdoor pursuits. Those looking for a more relaxing getaway can enjoy a stroll through the town and take in the local bookstores and artisan craft shops. The city is also known for its breweries and festivals, making it a top destination for guests and one of the U.S.’s best Airbnb markets. It’s also an ideal setting for a glamping business.

Bar Harbor, ME Cap rate: 7.28% Median home price: $493,800 Vacation rental occupancy rate: 90%

Bar Harbor is a stunning destination on Mountain Desert Island just off Maine’s Frenchman Bay. Its coastal views are some of the best in the country, and the town is hugely popular among visitors wanting to enjoy the local seafood and explore the islands by boat. Moreover, southwest of Bar Harbor is the unforgettable Acadia National Park, which is home to diverse wildlife, a glaciated coast, and cobble beaches. With a cap rate of 7.28% and an occupancy rate of 90%, investing in vacation rental property in Bar Harbor can be a very lucrative opportunity. Additionally, 40% of all rentals have a minimum night stay of 4-6 nights, providing investors with potential for longer stays and increased revenue. Whether visitors are coming for the scenic beauty, outdoor adventures, or the charming town itself, Bar Harbor is a top destination for vacation rental investors looking to make a profit.

Nashville, Tennessee

Nashville is known for its lively music scene, but it also has a strong tourism industry that makes it a great place to own a vacation rental. The city’s many attractions, such as the Country Music Hall of Fame and Museum, the Ryman Auditorium, and the Johnny Cash Museum, make it a popular destination for visitors. In addition, Nashville’s growing economy and job market are attracting more people to the city, which is leading to an increase in demand for short-term rentals. According to AirDNA, the average nightly rate for vacation rentals in Nashville is $229, and the occupancy rate is around 60%.

Palm Springs, California

Palm Springs has long been a popular vacation destination, with its warm weather, golf courses, and spas. In recent years, it has also become a hot spot for vacation rentals, with a growing number of investors buying properties in the area. The city’s popularity has led to a shortage of available rental properties, which has driven up rental rates. According to Mashvisor, the average cap rate for vacation rentals in Palm Springs is around 6%, and the median property price is $674,800.

Park City, Utah

Park City is a mountain town that is best known for its skiing and winter sports. However, it also has a thriving summer tourism industry, with activities such as hiking, mountain biking, and fishing. This makes it a great place to own a vacation rental, as you can generate income year-round. According to AirDNA, the average nightly rate for vacation rentals in Park City is $479, and the occupancy rate is around 50%.

San Diego, California

San Diego is a popular vacation destination due to its warm weather, beaches, and attractions such as the San Diego Zoo and SeaWorld. The city also has a thriving business economy, which is leading to an increase in demand for short-term rentals. According to Mashvisor, the average cap rate for vacation rentals in San Diego is around 4%, and the median property price is $1,161,200.

St. Augustine, Florida

St. Augustine is the oldest city in the United States, and it has a rich history and charming architecture that attract many visitors each year. The city is also close to the beach, which makes it a great vacation destination. According to AirDNA, the average nightly rate for vacation rentals in St. Augustine is $263, and the occupancy rate is around 58%.

Steamboat Springs, Colorado

Steamboat Springs is a ski resort town that is popular with winter sports enthusiasts. It also has a growing summer tourism industry, with activities such as hiking, mountain biking, and fishing. According to Mashvisor, the average cap rate for vacation rentals in Steamboat Springs is around 3%, and the median property price is $925,000.

Tybee Island, Georgia

Tybee Island is a barrier island near Savannah that is known for its beaches and laid-back atmosphere. The island is a popular vacation destination, particularly during the summer months. According to AirDNA, the average nightly rate for vacation rentals on Tybee Island is $268, and the occupancy rate is around 68%.

Whitefish, Montana

Whitefish is a mountain town near Glacier National Park that is popular with outdoor enthusiasts. The town has a thriving tourism industry, with activities such as skiing, hiking, and fishing. According to Mashvisor, the average cap rate for vacation rentals in Whitefish is around 6%, and the median property price is $857,900.

Williamsburg, Virginia

Williamsburg is another historic city that is popular with tourists. The city is home to Colonial Williamsburg, a living history museum that depicts life in 18th century Virginia. Visitors can step back in time and experience the daily lives of colonial Americans, from blacksmiths and coopers to wigmakers and apothecaries. In addition to its historical attractions, Williamsburg offers modern amenities such as shopping, dining, and entertainment.

Investors looking to purchase a vacation rental property in Williamsburg can take advantage of its healthy occupancy rate of 62% and median home price of $337,194. With its unique blend of history and modernity, Williamsburg is a promising location for vacation rental investors who want to offer their guests a truly one-of-a-kind experience.

Sarasota, Florida Cap rate: 4.8% Median home price: $385,210 Vacation rental occupancy rate: 55% Sarasota is a popular vacation spot located on the Gulf of Mexico with a wide variety of outdoor activities to enjoy, including boating, fishing, and golfing. Visitors also enjoy visiting the Ringling Museum of Art, St. Armands Circle, and the Mote Marine Laboratory and Aquarium. With an average daily rate of $200, short-term rental investors can expect to make a profit on their investment.

Lake Geneva, Wisconsin Cap rate: 4.4% Median home price: $398,125 Vacation rental occupancy rate: 62% Lake Geneva is located just an hour outside of Chicago and offers visitors a chance to escape the city and enjoy the beauty of the lake. The area is home to several top-rated golf courses, an abundance of water sports, and a variety of local festivals and events. With over 60% occupancy rate, short-term rental investors can expect consistent income year-round.

Honolulu, Hawaii Cap rate: 3.9% Median home price: $798,619 Vacation rental occupancy rate: 83% Honolulu is a popular tourist destination and is known for its stunning beaches and warm weather year-round. While the cost of entry is high, short-term rental investors can expect high occupancy rates and daily rental rates of $226 on average.

Maui, Hawaii Cap rate: 3.5% Median home price: $1,204,242 Vacation rental occupancy rate: 77% Maui is another popular Hawaiian destination known for its beautiful beaches, outdoor activities, and world-class golf courses. Short-term rental investors can expect high occupancy rates and daily rental rates averaging $300 or more.

The Takeaway

Investing in vacation rental properties can be a lucrative way to generate passive income, but it’s important to consider the location carefully. When looking for the best places to buy vacation rental property in the USA, consider factors such as cap rate, median home price, and vacation rental occupancy rates.

The destinations listed above are just a few of the many locations that offer a great return on investment for short-term rental properties. However, it’s important to keep in mind that the vacation rental market is constantly changing, so it’s crucial to stay up to date on the latest trends and regulations in the industry.

As with any investment, it’s important to do your due diligence before making a purchase. Research local regulations and taxes, and work with experienced real estate agents and property managers to ensure a successful investment. With the right location and proper management, a vacation rental property can provide a steady stream of passive income for years to come.

Bizbeak
WRITTEN BY

Bizbeak

I am Bizbeak, your loyal wingman and trusted partner in the thrilling world of Vacation Rentals Marketing.

With my unwavering dedication to your success and my keen eye for marketing strategies, I am here to support and empower you every step of the way.

Together, we'll soar above the competition, navigate the ever-changing marketing landscape, and unlock the full potential of your vacation rentals.

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