TOP 150 PLACES TO BUY A VACATION HOME IN 2019
The 150 Best Places to Buy a Vacation Rental Property in 2019
This year, the focus is on markets that are as recession-resistant as they come.
The top five best places to buy in this year’s Best Places to Buy in 2019 Report reflect a strong resurgence of traditional vacation destinations.
Established as vacation destinations where family traditions are made, these destinations remain affordable for families even during economic downturns.
The Southeast Is A Solid Bet
Of the 25 Best Places to Buy in 2019, 13 were located in the Southeastern U.S. compared to 15 last year.
Pigeon Forge and Gatlinburg claim the top two spots, with neighboring Sevierville (#8) trailing closely.
The region seems to have fully recovered from the devastating fires in the Fall of 2016 and boasts a steady stream of travelers year-round.
Past Best Places To Buy
Many locations disappeared from the Top 25 this year.
Some ranked lower due to increased regulations in urban markets; others due to increases in real estate prices.
Eight cities, however, kept their rank in the Top 25 this and last year: Pigeon Forge, Panama City Beach, Kissimmee, Gatlinburg, and Killington.
Here’s an overview of the Top Five Places to Buy for the past three years:
Purchasing in a stable regulatory environment makes you less likely to encounter issues receiving a return on your investment.
A Reversal In The Urban Trend
2019 saw several urban markets drop from list due to regulations.
This isn’t to say urban markets are a no-go, but our advice to prospective buyers is to secure hotel licenses for any profit-generating rental activities, as the unsettled nature of vacation rental law in many cities makes long-term investment difficult.
Where Not To Buy A Vacation Property (And Why)
Cities within states with housing shortages (California, Florida, Utah, Colorado and New York) and states with the highest costs of living (Utah, Delaware, Colorado, Massachusetts, New York, California, Hawaii and Virginia) are places where you should think twice about buying.
Many factors influence what makes a location good or bad for rental property.
Areas with high asset prices, such as California and Massachusetts, have lower ratings because the price of home ownership is so high. Even if the rental market in these areas is robust, the property needs to perform very well for the investment to be of value.
How We Developed The Full Report
There are many reports available that outline top vacation rental and short-term rental markets based on attributes such as consumer demand and anticipated gross rental revenue.
Our focus goes beyond these limited results and attempts to answer the ultimate ROI question, “When buying a rental property for investment purposes, what are the best markets?”
The report focuses on 150 U.S. markets and compares two figures, costs of home ownership and short-term rental potential. Costs of home ownership include a variety of factors such as purchase price, local property taxes, home insurance and maintenance.
Short-term rental potential taps into multiple sources including actual Rented.com demand from management companies in these markets, Airdna occupancy and rental rate projections, in addition to the current legal situation in each market.
Several key points that appear to be indicative of the overall profitability of a short-term rental include:
- Real Estate Price
- Local Vacation Rental Rates
- Insurance, Taxes, and Maintenance Costs
- Overall Popularity of the Tourist Destination
We also factor in short-term rental regulations and these can have a significant impact on a vacation homeowner’s bottom line. In addition, we create a weighted “Revenue” number and “All in Cost” number for each market, and then index the ratio between markets on a scale of 0 to 100, with 100 being a perfect score.
Based on these factors, Rented.com gave out scores on a scale from 0 to 100, with the goal of objectively providing potential vacation homeowners the information necessary to select the best destination for their personal needs.
Though we still see the alternative accommodations market in a period of growth, potential consumers still need to be smart in their investments.
The dominance of certain regions is beginning to fade as alternative accommodation becomes an investment that can be of value anywhere, given the right circumstances.
Whether one is investing in a traditional vacation market or a more urban destination, there’s still an opportunity to succeed.
Here are some guidelines to keep in mind:
- Purchase homes in lower cost markets to reduce income the home must generate to achieve financial goals
- Have a clear understanding of necessary improvements, as well as maintenance, property tax, insurance, HOA and other costs
- Seek out markets with a strong vacation and/or rental history
- Learn about the prospective community’s regulations regarding rental properties