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Top 5 destinations for buying vacation properties in the US in 2018

Written by Posted On Saturday, 05 May 2018 19:52
vacation home 2018 vacation home 2018

Why are more people buying vacation rental homes? Obviously at the root of the vacation rental investing idea is the need to generate an extra income source. And hence as a prospective investor, you want to consider options that offer great potential for this end goal.

vacation home 2018

The idea of having a vacation home probably caught wind with the crash of 2008. More people want to rely on the idea that if they lost their job, a home could still help provide a stable income.

Vacation homes present an opportunity to profit from the short-term rental market. According to an NYTimes article, As at December 2010, there were 1075 units in Palm Springs, Fla, registered as short-term rentals. By December 2016, that number has almost doubled to 1967 vacation rental listings. And so has prices. For example, the cost of a short-term rental permit in Palm Springs jumped in December 2016 from $225 to $900 a year.

Having a second home in a good location also gives you an opportunity to benefit from home appreciation.

WHAT MAKES A GOOD VACATION PROPERTY LOCATION?

So what makes a good location when it comes to vacation rental properties?

1. Demand.

You obviously want to make enough profit to match up with the value of your investment within a short time period. Obviously, you won't be able to do this if you had a property in a less traversed, suburban location.

2. Earning Potential.

And don't just stop at demand. Consider the earning potential. Without the right information, you might pay a high price for a property with a low earning potential. You need to ask yourself questions about vacancy rates and median home prices in your chosen location. Asking the right questions would ensure that you are set to start making profit in a short time. This article would compare earning potentials of properties using stats from tripadvisor.com

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So let's dive in. Here are the top 5 vacation rental property locations in the US as at 2017.

1. Destin, Fl

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Demand: Florida is at the top of the US vacation rental markets due to its sunny weather and beaches. So it's not coincidental that we should start with Florida. Destin, Fla is one of those buzzing places for investors with strong demand for accommodation by travelers.

Earning Potential: The median price of a home in Destin, Fla stands at around $323,000. TripAdvisor estimates show that an average 2- bedroom home in Destin, Fla can bring in:

- $1,093 per week

- $28,418 per year at 50% occupancy

2. Palm Springs, Ca

palm springs

Demand: Palm Spring's closeness to LA makes it a convenient getaway location for transient vacationers. The desert oasis has a high demand since it has all the props for a nice vacation; nice architecture, fine weather, mid-century homes, nightlife. There is also the Coachella Valley Music and Arts Festival, taking place every year in Indio about 25 miles away, attracting a large number of fun-seekers and party-lovers. In fact, the large number of short-term vacation rentals in Palm Springs is causing unfavorable responses from policymakers.

Earning Potential: The median home price in Palm Springs, according to Zillow is $318,700. Zillow predicts this will rise by 5.4% within the next year. Tripadvisor stats show that an average property in Palmsprings can produce up to $50,000 per year.

3. Galveston, Tx

Galveston island tx

Demand: 30 miles of beaches, amusement parks, Victorian-era homes, and casinos combine to make Galveston a great place for a family vacation. Galveston attracted 6.5 million visitors in 2016. The annual Mardi Gras celebrated in Galveston is the third largest in the US. It's definitely a great place for property investment.

Earning Potential: The median price of a home in Galveston is $264,000. From TripAdvisor's data, a 2 bedroom vacation rental in Galveston can generate

- $1,408 per week

- $36,608 per year at 50% occupancy (26 weeks)

4. Las Vegas, Nv

las vegas nv building

Demand: Famous for its mega hotels and resorts, Las Vegas is a well-traversed location. The demand for alternative accommodation, boosted by Airbnb, VRBO etc. has brought a lot of vacation property investors here also. Traveling groups can have the luxury of a private home by going for vacation property rentals.

Earning Potential: At a median price of $247,000, a 2 bedroom vacation rental in Las Vegas can generate

- $1,170 per week

- $30,430 per year at 50% occupancy (26 weeks)

5. Nashville, Tn

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Demand: Tourism in Nashville broke records in 2016 at 13.9 million guests and it's not relenting soon. Travelers need somewhere to stay and investors see the opportunity.

Earning Potential: At a median price of $300,000, a 2 bedroom property in Nashville will potentially produce:

- $1,668 per week

- $43,368 per year at 50% occupancy (26 weeks)

However, Nashville takes a strong stance at non-owner occupied single family homes. So if you plan to buy here, you should plan to stay for a bit. Yet, there are some areas zoned for multifamily units or mixed use. You might need to get more information.

 

Vacation rental properties in the above locations will potentially produce good ROI. Note however that the earning potential values are averages. Homeowners could potentially earn more or less depending on how well they manage their properties.

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Tobby Olujinmi

Hi. Am Tobby. I am a marketer and content strategist. Would you like to see some of the services I offer to grow your real estate online marketing? Let's chat - Tobbyolujinmi@yahoo.com . 

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