Best Vacation Places To Buy An Investment Rental Property

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Best vacation towns to buy a rental property for short term rentals that have the highest return on investment ROI

The pandemic has changed the vacation behavior of travelers all around the world. Restrictions have made international travel tedious – if it wasn’t completely banned altogether, not to mention that one positive test can completely derail your vacation.

In September, travel spending improved to 9% below 2019 levels, after falling for the first time since January and August, according to the U.S. Travel Association. AAA predicts 53.4 million people to travel for Thanksgiving, bringing this year’s holiday travel within 5% of pre-pandemic levels in 2019.

The World Travel & Tourism Council (WTTC) is optimistic that travel will explode in the coming year. The WTTC noted that domestic travel growth has “significantly” outpaced global tourism as a whole and is expected to rise even more in 2022. “This year, the United States travel sector is anticipating a 35.6% bump, compared to 2020,” Travel & Leisure reported on the WTTC report that was jointly produced with Oxford Economics. “And next year, the U.S. travel sector is expected to grow by another 28.4%.”

Research firm Technavio foresees the global vacation rental market growing nearly $63 billion between 2020-2024.

With travel expected to return to near pre-pandemic levels, there is a large segment of the U.S. population that will likely only travel domestically – which could open investment opportunities. However, certain vacation areas will deliver more return on investment than others.

Evolve – a vacation rental booking platform – just released an analysis of the best vacation places to purchase a real estate property, based on the median annual revenue of its own rental listings and on median home values from Zillow data.

10. Windham, New York

Windham – the “gem of the Catskills” is a town three hours north of New York City – known for its wine bars and art galleries.

Median home listing price: $459,500

Median annual gross rental revenue: $46,573

9. Ruidoso, New Mexico

Ruidoso is a charming Southwestern town known for being a ski destination nestled in the Sierra Blanca mountains.

Median home listing price: $243,458

Median annual gross rental revenue: $21,827

8. North Conway, New Hampshire

North Conway is another ski resort town that boasts year-round respite for nature-seekers.

Median home listing price: $356,946

Median annual gross rental revenue: $39,002

7. Waldport, Oregon

Waldport is an Oregon coastal town that offers whale watching in the Pacific Ocean, but is also close to national forests.

Median home listing price: $380,728

Median annual gross rental revenue: $41,182

6. Branson, Missouri

The Midwest vacation spot snug in the Ozark Mountains features country music performers and Dolly Parton’s Stampede.

Median home listing price: $179,724

Median annual gross rental revenue: $21,596

5. Surfside Beach, Texas

Surfside Beach is a seaside town in Texas on the Gulf of Mexico.

Median home listing price: $277,642

Median annual gross rental revenue: $41,688

4. Bryson City, North Carolina

This laidback small town is the gateway to the Great Smoky Mountains that borders Tennessee and is near a national park.

Median home listing price: $194,326

Median annual gross rental revenue: $31,818

3. Sevierville, Tennessee

Sevierville is a Tennessee town that boasts tourist attractions such as Dollywood and the Great Smoky Mountains National Park.

Median home listing price: $296,966

Median annual gross rental revenue: $51,228

2. McGaheysville, Virginia

McGaheysville is situated near Shenandoah National Park and the Appalachian Trail.

Median home listing price: $265,479

Median annual gross rental revenue: $48,838

1. The Poconos, Pennsylvania

The Poconos has a variety of shopping, entertainment and outdoor activities with lakes and mountains nearby.

Median home listing price: $198,667

Median annual gross rental revenue: $41,699

Jeremy Kisner – a senior wealth adviser at Surevest Wealth Management in Phoenix – told RisMedia that those getting into the investment property game should be prepared to stay for the long haul to enjoy growth.

“The way that people get in trouble with almost all investments is, they just don’t hold onto things long enough,” Kisner explains. “With rentals, if you break even on a cash-flow basis, that’s actually not too bad because you’re paying down the principal and building equity that way. Then, you hopefully also see some appreciation.”

Kisner admits that rental properties can be a dangerous gamble since you’ve got to factor in maintenance costs and costly evictions. But he notes that if you continue to hold onto your properties, they will reward you with a profitable ROI.

“If I hold them until I turn 60 when they’re paid off, even after property taxes and insurance, I’ll double my Social Security income,” Kisner says.

You can see the entire list of best places to buy a vacation rental in 2022 at Evolve.

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