For many, vacation properties present an exciting opportunity to earn rental income. Yes, vacation rentals make people money, but before investing in such a property, make sure you purchase your “fix and flip” or turn-key property in the right market. Here are some of the top vacation property markets in the U.S, according to a national real estate market analysis done by Mashvisor.
Purchase a Vacation Rental in: Berkeley, New Jersey
Berkeley Township is a seaside town located in Ocean County. Nearly 72% of the township is located within the federally dedicated Pinelands National Reserve, making it attractive to vacationers looking for some rest and relaxation and outdoor adventure. Vacation properties have an average daily rate of $283 and a 59% occupancy rate.
Fix and Flip Properties in: Englewood, Colorado
Englewood is a municipality located in the Denver–Aurora–Lakewood, CO metropolitan area. Investors who aren’t afraid of doing some renovations can find some fantastic deals on properties, turning them into attractive and in-demand vacation properties. With a bounty of outdoor activities available and the Rocky Mountains in your backyard, it’s not hard to turn a profit. Like Berkeley, investors who list their homes on popular vacation rental sites like Airbnb see a 59% occupancy rate. However, the average daily rate is much lower at $124 per night.
Purchase Rental Income Properties in: Covington, Georgia
Covington is located approximately 26 miles outside of Atlanta, making it the perfect location for people who want a city escape without paying Atlanta prices. Its historic downtown area also has a reputation for being a film town, with more than 140 films shot in the area, including The Dukes of Hazzard, The Vampire Diaries, and Sweet Magnolias. Covington boosts a 61% occupancy rate and continues to draw in the crowds.
How to Choose the Best Vacation Properties
Whether you purchase a vacation property in Covington, Berkeley, Englewood, or another location, if your goal is cash flow, you want to buy in a top vacation rental market. Between 2020 and 2022, the following markets were the most popular areas with the highest return on investment (according to Mashvisor):
- Abilene, TX
- Buffalo, NY
- Gatlinburg, TN
- Huntington, VT
- Levittown, PA
- McGaheysville, VA
- Tuscaloosa, AL
- Sevierville, TN
Some of these locations might surprise you. However, what many first-time vacation property investors don’t account for is the risk. Often, people will invest in or “fix and flip” properties in trendy towns that lose their allure after a few years. Others invest in beach markets with a substantial risk of property damage and low tourism caused by tropical storms and hurricanes. Investors who want to make the most from their vacation rentals should choose stable markets that consistently perform and have a steady flow of visitors interested in vacation properties.
What to Know Before You Make Vacation Rental Renovations
Make sure you understand the legalities if you purchase a property you intend to renovate for a vacation rental. Places like Englewood and Covington allow homeowners to rent their properties to guests. However, there are other places where it’s not legal to list a home on a vacation rental site. Before you invest in a vacation rental property, make sure you’ve done your research to set yourself up for long-term success.