Better Homes And Gardens Home Rental Md

In case you missed the growing number of articles dedicated to the topic, the vacation home rental industry is booming. A recent report from Guesty, a property management platform, found that reservation volume is skyrocketing, with rentals from July through September up 270% over the same period a year earlier. Additionally, average nightly rates for the same time frame were up about 30%.

It's hard to read news like that and not want to get in on the action. As it turns out, it just might be an opportune time to do so. A 2021 study by Vacasa, a vacation rental management company, found that second-home buyer demand is starting to decline, which could result in more affordable purchases for those still shopping around. The cooling market might be due to the fact that many of the people who were on the hunt for a vacation home purchase already sealed the deal during the past 18 months.

Home Exterior with fence

Between the favorable purchase environment and white-hot demand for rentals among travelers (not to mention a critical need for more vacation rental supply to keep up with the demand), it might be time to crunch the numbers to see if you can afford to buy an investment property.

Figuring out whether your budget can accommodate the purchase of a vacation rental home is merely half the battle. You'll also need to answer the million-dollar question: Where does it make the most sense to buy such a property? Luckily, it's a question plenty of data analysts and previous buyers have spent a significant amount of time contemplating. Both Vacasa and Magnify Money (part of the LendingTree family) have recently issued reports detailing the best markets to invest in real estate intended to be used as a vacation rental home.

Here are some of the top locations identified, as well as a few locations recommended by current (and very successful) vacation rental hosts.

Gatlinburg, Tennessee

A mountain town in eastern Tennessee that puts you near the entrance to the popular Great Smoky Mountains National Park, Gatlinburg is the number one place to own a rental vacation home, according to Vacasa's 2021 data. The median home sale price here is about $320,111, says the report, and an annual gross rental revenue of $47,328.

Vacasa isn't the only company that says Gatlinburg is the place to be a rental vacation homeowner. Jeff Shipwash, CEO of Shipwash Properties, a small real estate investment company based in Tennessee, also suggests this location.

"The Great Smoky Mountains National Park is one of America's most visited national parks, attracting more than 12 million visitors per year. Many of these visitors are traveling from out of town and need lodging," says Shipwash, whose company owns several Airbnb rentals in the area.

Shipwash also says Gatlinburg is a solid option because the supply of hotel and motel accommodations is very limited, making vacation rentals even more critical.

"Gatlinburg is also an affordable place to purchase investment properties compared to other popular cities," says Shipwash. "With its affordability and attractions close by, Gatlinburg is an excellent investment market."

St. Augustine, Florida

Sunny Florida is another safe bet for a vacation rental home, and the top location in the Sunshine State is historic St. Augustine, according to Vacasa. Known for being the oldest city in the country, and for its charming Spanish colonial architecture, the median home price is $365,576, while the annual gross rental revenue is about $46,557.

Some of the reasons travelers love this destination? Pristine beaches, a historic downtown, and an overall European feel.

Gulf Shores, Alabama

Another sun-drenched option popular with vacationers and spring breakers, Gulf Shores is a top-ranked vacation rental home destination, says Vacasa. However, the median home price here is not cheap at $402,905. Annual gross revenue for rentals in Gulf Shores is about $46,107.

There's a lot to attract visitors to Gulf Shores though, including nearly every water sport you can think of as well as a long list of legendary bars and restaurants. As an added bonus, each spring the destination hosts The Hangout Music Festival, a wildly popular event that attracts a crush of travelers and famous musicians (all of whom need lodging, of course.)

Blue Ridge, Georgia

Blue Ridge has a lot going for it, not the least of which is the affordable home purchase prices. The median sales price is about $290,934, while annual gross revenue for rentals is about $38,266.

The draw for travelers and visitors includes many popular hiking trails, 16 waterfalls, horseback riding, fishing, and a long list of orchard festivals in the fall.

Palm Springs, California

Palm Springs has been a hot spot (literally and figuratively) for decades. It has long been the playground of celebrities and golf enthusiasts. And as it turns out, this desert community is also a solid choice for a vacation rental property, albeit one of the pricier places to get into the market.

The median home price here is a steep $539,370, which should come as no surprise given that the destination is home to many people fleeing Los Angeles and San Francisco, and is a popular choice for vacation homes among the glitterati and well-heeled.

Still, if you can afford to get into the market here, it will surely pay off. The annual gross rental revenue is $52,784. The attractions for travelers and visitors are plentiful. There's desert hiking, shopping on par with Beverly Hills, and a plethora of trendy restaurants and bars.

Deep Creek Lake, Maryland

Ranking among the top 10 locations on the Vacasa report, Deep Creek is home to the state's largest inland lake. That means water activities are a big draw and include boating, tubing, and waterskiing. Deep Creek is also a popular choice for skiing and snowboarding at nearby Wisp Resort, says Vacasa. The area also offers abundant hiking thanks to Swallow Falls State Park. It's no wonder that Deep Creek ranks so high as a vacation rental destination.

The average home purchase price here is $439,367, while the annual gross rental revenue is $51,031.

Seaside, Oregon

Oregon is legendary for offering stunning natural beauty, so it should come as no surprise that more than a few Oregon locations can be found among the top choices for vacation rental properties. The highest-ranked community on Vacasa's list is Seaside, a small coastal town where biking, walking, and strolling along the 100-year-old promenade are all popular ways to spend time. The Seaside Aquarium is another notable attraction. But really, what more reason do you need than the beautiful beach?

At $466,086, the median home price is not exactly inexpensive, but the annual gross rental revenue is $45,249.

Ludlow, Vermont

Rounding out the top 10 on the Vacasa list, Ludlow is all about quality time outdoors. The community is convenient to the Okemo Mountain Resort, which offers plenty of fun for skiers and snowboarders. Another notable attraction is Buttermilk Falls, a picturesque series of three waterfalls and swimming holes.

Home prices in Ludlow are also attractive with the median sale at about $346,950, while annual gross rental revenue is $42,638.

Big Bear, California

California residents need little explanation regarding the popularity of this destination as a vacation rental property location. But for those not familiar, Big Bear is a year-round activity-filled destination convenient to both Los Angeles and San Diego. Thanks to its proximity to these two urban centers, the destination attracts hordes of travelers. Skiing is one of the top reasons to visit, thanks to Snow Summit ski resort. But there's also snow tubing and, in warmer seasons, hiking among the San Bernardino National Forest. The lake is also an attraction entirely of its own.

"Big Bear Lake is a public lake with two public boat launch ramps. Six marinas offer boat rentals and other concessions including pontoon boats, speedboats, and personal watercraft," says money-saving expert Andrea Woroch, who owns three vacation rentals, one of which is in Big Bear. "There's a variety of activities, such as parasailing, water skiing, fishing excursions, and boat tours. People can picnic lakeside and enjoy the iconic rock formations at Boulder Bay Park. Swim Beach at Meadow Park has an on-duty lifeguard, floating dock, and water toys."

The median home price here is $372,667, according to Vacasa, while the annual gross rental revenue is $38,913.

McCall, Idaho

The resort town of McCall is Magnify Money's top choice for a vacation rental investment property. Experts recommend McCall because home prices in the area have been on a hot streak in recent years. But that's just one of the reasons the destination is a safe bet, says Jacob Channel, senior economic analyst for LendingTree.

"Not only are a majority of homes in McCall vacation homes (64.6%), but home prices in the area also rose by 64% from 2015 to 2019 and have continued to rise since the start of the pandemic—up more than 50% from September 2021, according to Realtor.com," says Channel. "This means those who invest in a second home in this area will likely see a solid return on their investment, both in terms of income generated from renting the home out as well as in terms of home price appreciation."

The median home value in McCall was $206,800. As of 2019, that price shot up to $339,900. Attractions in McCall include miles of whitewater rapids for rafting, hiking and backpacking trails, craft breweries, wineries, and hot springs.

Cape Canaveral, Florida

Cape Canaveral is another Florida destination that receives high marks as an investment option because of its robust home price, says Channel. Between 2015 and 2019 median home values here rose from $167,300 to $244,900, which is a 46% change.

Of course, Cape Canaveral is well known for being a convenient place to visit The Kennedy Space Center. There's also a Manatee Sanctuary Park here and a waterfront boardwalk.

Vail, Colorado

When it comes to Vail, think skiing, skiing, and well...more skiing. And all those travelers need somewhere to stay when visiting, making Vail a solid place to purchase a vacation rental property (it landed at number four on Magnify Money's list of choices).

However, the median home price in Vail shot up from $534,400 in 2015 to a staggering $773,700 in 2019.

Sunriver, Oregon

Slightly more affordable than Vail, but still among Magnify Money's top picks, the median price for a home in Sunriver is about $564,800, which is a 43% increase from 2015 when median prices were about $393,700.

Sunriver is a 3,300-acre planned residential and resort community ideal for spending time outdoors whether skiing, exploring the national forest nearby, or enjoying the miles of paved biking and walking trails. Additional activities include golf, tennis, and visiting the Sunriver Nature Center.

Cape May, New Jersey

Although not on either the Vacasa or Magnify Money ranking, Airbnb Super Host Anna Papalia says the beach community of Cape May should definitely be on your shortlist.

"Cape May is one of the best places to vacation, and invest in a vacation home for several reasons," says Papalia, who owns a rental property in the community. "Not only are the beaches stunning and pristine, but it's America's first seaside resort—the first settlers came to Cape May in the 1600s.

"There is never a shortage of renters in Cape May," continues Papalia. "I easily paid my annual mortgage plus expenses ($60,000) in five months of renting out to summer beachgoers."

The beach isn't the only attraction here. Cape May is the location of more than 100 historic Victorian properties, a buzzing restaurant scene, and is also popular with birders because of its migratory patterns and many nature preserves, says Papalia. What's more, a Harriet Tubman museum recently opened in the area.

While Cape May is unlikely to be the most affordable place to purchase an investment home (the median sale price is about $523,000), you can rest assured it's a destination that is very well-trafficked, says Papalia.

The Catskills and Hudson Valley, New York

As the owner of the rental company Red Cottage Inc., Jennifer Grimes knows a thing or two about vacation property purchases. She also owns a real estate brokerage, Country House Realty, a boutique agency focused on the second-home market that serves The Catskills and Hudson Valley.

With all of this experience, Grimes recommends a purchase in upstate New York, specifically in the Catskills and the Hudson Valley. "Given the proximity to metro New York, and the stunning natural surroundings, the area is on fire for short-term vacation rentals," says Grimes.

One of her top choices in the area is the town of Livingston Manor, which features numerous breweries and shops, fly fishing, and a small-town feel. Nearby towns that are worth checking out include Callicoon and Narrowsburg, both of which are located along the Delaware River.

"Guests renting in those towns, they have a lot of outdoor experiences on their doorstep like hiking Jensen Ledges, kayaking or tubing down the Delaware in season, swimming in the river at Skinner's Falls, or just going on scenic drives through farm country and finishing up at Callicoon Wine Merchant for a tipple and tapas," says Grimes.

The average home price in Livingston Manor over the past year was about $317,893, while in Callicoon it was $294,536 and in Narrowsburg, you'll find prices around $249,712, says Grimes.

Tips for Picking a Vacation Home Location

Here are a few parting tips from the experts about selecting a location for a vacation home rental investment.

Generally speaking, areas where home prices are quickly rising, and where vacation homes make up a large portion of the area's total housing supply, are good places to invest in a second home, says Channel. "This is especially true if you're planning on renting your second home out or otherwise using it to generate income," says Channel.
Sunny coastal spots make up most of the places in high-demand across the U.S. right now because they're year-round holiday destinations, says Marcus Rader, CEO of Hostaway.
Places that have a lot of attractions for families or are renowned beauty spots are also safe bets, adds Rader. Destinations such as Lake Tahoe are also a safe investment because they continue to be popular year-after-year, adds Rader.
Local regulations surrounding vacation rentals and property taxes have big variations. It's easy to get tripped up by these, so do your research on this front before purchasing.

Ultimately, like any other real estate investment, the key is location, location, location.

"The location is the most important thing because this determines your revenue—not just what nightly rate you can set, but also if you can actually rent it out all year round," says Rader.