Many homeowners and savvy investors are turning to rental vacation properties as a means of generating extra income. For someone that hasn’t yet broken into the rental market, the idea of investing can feel daunting: What area should I buy in? What if I don’t make the right purchase? How do I even begin? A recent Forbes article answered one of those questions, in a recent outline of the top five places to own a vacation rental property in 2019.
According to Forbes, the following destinations rank highly for their real estate prices and vacation rental rates, low taxes and maintenance expenses, and the popularity of the city. To help you get started, we’ve compiled homes in each area that could make for a great investment opportunity, while peppering in some key points to consider as you weigh whether the title of “vacation rental landlord” is right for you.
Pigeon Forge and Gatlinburg, Tennessee
Yes, Pigeon Forge and Gatlinburg are two cities—and rank separately on the list—but their close proximity makes it difficult to consider one over the other. When it comes to Tennessee real estate, there is enormous potential in the purchase of land, if one is willing to go through the endeavor of building an investment property. Priced at $19,000, imagine the potential of this plot of land. When it comes to short-term rental investment, location is king. Situated in Sevierville, this land is within close proximity of Gatlinburg, the “Gateway of the Great Smoky Mountains National Park,” and Pigeon Forge, the home of Dollywood.
Panama City Beach, Florida
Known for its sandy white beaches and stellar position on the Gulf of Mexico, it’s no surprise that Panama City Beach, Florida is among the top destinations for investment. Moderately priced at just under $550k, this condominium presents the opportunity for a turn-key investment property just steps from renowned Pier Park. This condominium brings up a to-do one must complete when investing: pulling out the calculator. Crunch the numbers to determine operating expenses (from the down payment and mortgage to utilities, HOAs, and other costs). Weigh the operation costs against what you might expect to charge on a nightly or weekly basis to get an idea of what your ROI looks like.
Killington, Vermont has emerged as an excellent place for ski and nature enthusiasts, from the Killington and Pico Mountain ski resorts to hiking opportunities along the Long and Appalachian trails. An expansive property, such as this one in nearby Bridgewater, could capture larger groups in town for celebrations or simply those that want to experience a taste of nature in the off-hours when they aren’t hitting the slopes or the trails.
Palm Coast, Florida
Who wouldn’t want to spend some time in a private and gated golf community at the water’s edge in the Sunshine State? This turn-key condominium in Palm Coast, nestled between famous St. Augustine and Daytona Beach, brings us to our final point: consider whether you’re willing to put the elbow grease in. If you are adept at making repairs on your own, you might not mind putting some extra time into home updates. But if “handyman” isn’t your type, you’ll want to ensure you find a home that falls into the same category as the one above: ready for occupancy.
We hope that the insights above have helped add some value to the decision regarding whether short-term rental investment may be right for you. If it is something you’re considering, we’d be happy to connect you to a Sotheby’s International Realty® broker in another state and advise you regarding the intricacies of purchase, potential restrictions a city or building might have, and more. Contact us today.