As more and more people are driven to escape and get away, many are considering the option of making their vacation dollars last longer as short term rental investments. With prices in popular tourist destinations escalating to catch up on lost time and business due to the pandemic, it may be a wiser option to buy a short term rental in a popular destination locale and earn some money alongside enjoying the mutual benefits of using the unit or home for personal reasons.
The following are considerations when investing in vacation properties:
- Personal Use – Visiting the property you make money from adds value and a vacation option that can save your vacation budget.
- Rental Income – If you own a property in one of the best vacation rental markets, you will acquire a steady stream of passive income that will most likely fund your own vacation schedule.
- Appreciation – In addition to rental income, your property will most likely appreciate in value, which allows you to pull money from an appreciable asset.
- Expenses – Expenses can range from routine incidentals like mortgage, condo fees, etc. to unplanned emergencies.
- Risk: Owning a vacation rental comes with risks, especially if the rental is located in a volatile area, i.e. on the coast, in the mountains, etc.
- Insurance – a good policy is a must.
- Legality – ensure your vacation rental is permitted, legally, for short term access.
- Property Management – hiring a property management company can go a long way to eliminate the stress of managing tasks and repairs, as well as accounting.
- Marketing – how will you market your property, especially online?
- Partnerships: Working with a partner, or a group of investors, can extend your ability to acquire and manage the properties you are also using as vacation destinations.
According to Mashvisor and data collected, the best vacation rental areas to invest in (for 2022) are the following:
- Berkeley, New Jersey
- Englewood, Colorado
- Levittown, Pennsylvania
- Covington, Georgia
- Abilene, Texas
- McGaheysville, Virginia