Over the past decade, vacation rentals have witnessed a meteoric rise, and experts believe that this growth isn’t “hitting the brakes” anytime soon. By 2027, the revenue in this global industry is set to reach $113.9 billion. Yes, it’s that lucrative!
That said, if you’re looking for the latest trends and news in real estate and other facets of life, newsforpublic has got you covered anytime, anywhere.
The year 2020 was a year of travel changes. Consequently, there’s now a steady rush for short-term rental properties as most people are hoping to leave the bubbles inherent in their cities, with social distancing restrictions in place.
Now, more and more individuals seek out locations where they can experience mother nature at its finest. And guess what? That’s where you come in as an investor.
Are you looking to own a place where individuals from all around the world can enjoy the luxuries and benefits of nature?
If you are, this post by the Short Term Shop on the best places to own a vacation rental is sure to give you some pointers in that direction.
Ready to know more about staking a claim on this industry that features limitless potential? Let’s have a peek!
Contents
Buying a Vacation Rental: Just Before You Get Started
Before we delve into the best places to own a vacation rental, let’s take a look at some considerations you’ll have to make before acquiring one. They include:
Personal Use
Most individuals purchase vacation rentals mainly for personal use, including using the space themselves or renting it to other friends and family.
However, you’ll need to ask yourself if the main reason for this acquisition is for personal or financial gain. Giving answers to this question is essential to carve out an investment strategy.
Rental Income
Typically, rental income is everything if you’re looking to own an investment property, and in a case whereby your property features in a popular place, steady income is inevitable.
However, since all markets aren’t always well-suited for positive cash flow, you’ll have to do in-depth research on the market that tallies with your financial requirements.
Appreciation
Peradventure, you’ve found a market that promotes cash influx; another crucial factor to note is property appreciation.
Although the figures inherent in this market might seem excellent and impressive, market swings can occur anytime, leaving you with irreconcilable losses.
To reduce losses, intending investors should research markets that can accommodate property appreciation without hassles.
Expenses
Expenses here include utility bills, mortgages, and unplanned maintenance. The total of all these charges can pile up before you know it, resulting in negative returns.
Therefore, investors new to this market should plan their budget carefully to accentuate these “never-ending” expenses.
Insurance
With risks aplenty on every investment, enrolling for an insurance policy tailored to your needs is essential.
Asides from the typical liability and Homeowners insurance we’re all used to, you might want to go the extra mile by considering other policies that can shield you against specific emergencies and natural disasters.
Property Management
Vacation rental property management is never an easy task. Here, deliberating on whether or not you’ll require the services of a property manager is a huge decision.
While working with a property manager might cost extra, things are made easy, long term. These managers can perform certain tasks like overseeing tenant turnover, monitor the cleaning and maintenance of your property.
That said, having a property manager in the thick of things would ease your worry, especially when you live far away from your property.
Partnerships
No man’s an island. Working alongside a family member or close friend can open your eyes to the vast opportunities in real estate.
While this might seem like an exciting prospect with the closeness and all, make sure to draft a legal contract.
That way, you protect yourself and your property from any unforeseen circumstances. When you treat your investment as a clear-cut investment without adding emotions to it, the likelihood of something wrong happening is practically non-existent.
Best Places to Own a Vacation Rental: Top Markets in 2021
Suppose you’re probably wondering how to make a vacation rental pay for itself in cases where you sought a loan or down payment. In that case, your property location goes a long way to determine if that prospect is feasible or not.
That said, here are our top 5 markets for 2021:
Tuscaloosa, Alabama
This prospect-filled real estate market is known for athletics as it’s home to the University of Alabama. The university acts as a focal point as it draws tons of tourists annually.
Aside from its widely athletic population, Tuscaloosa is home to unique restaurants, museums, and historical sights.
According to a recent study, tourists spent over $600 million in Tuscaloosa county alone. With this figure dating back to 2018, it’s expected that the numbers are still rising.
That said, Tuscaloosa is a haven for investors looking to garner profits with short-term rentals.
Buffalo, New York
Niagara Falls makes Buffalo a pretty exciting tourist destination to visit during vacations.
Touted as one of the best places to own a vacation rental, Buffalo features numerous museums, ancient relic attractions, and diverse restaurants that are sure to make visitors come back for more adventures.
As New York’s second-largest city, investors on the lookout for properties that feature positive cash flow and are affordable should check Buffalo before it gets saturated.
Gatlinburg, Tennessee
If you’re an investor who’s unfamiliar with the tourist statistics this city holds, let’s break it down. Before the pandemic struck, Gatlinburg had a mind-blowing 11 million tourist visits every year!
Gatlinburg, TN prides itself as a city that engages in lots of outdoor activities and a theme park – Dollywood, set aside for the famous “Dolly Parton.”
With mesmerizing views at the Great Smoky Mountains, investors might find themselves seeking loans to have a stake here as it features loads of economic potential.
Blue Ridge, Georgia
Are you searching for a vacation rental market that accommodates hiking, trout fishing, and horseback riding? Well, Blue Ridge has you all covered.
Tourists tend to love the forest-like trails and the mind-blowing waterfalls of Chattahoochee National Forest. Also, this vacationer hotspot features trains that connect the neighboring mountain towns of Copperhill and McCaysville.
With all these at the fore, intending investors can take advantage of this market by investing in log homes, thereby maximizing positive cash flow.
Summary
Although owning a vacation rental has its pros and cons, there are still many opportunities in this industry. However, before you stake that claim, make sure that you do in-depth research and put some factors into consideration.
With the industry changing every day, we’ve handpicked four of the best places to own a vacation rental. Now, you can go ahead to make investments in these regions and yield positive dividends.
