Here’s the best places to buy a vacation rental home in 2020. Rented.com recently teamed with Weiss Analytics for its annual deep dive into the economics of owning a vacation rental home. Research criteria included comparing “the cost of homeownership, short-term revenue potential, cost to acquire and annual appreciation as well as projected changes in asset value.”
It’s no surprise that drive-to destinations are in demand. The report concludes, “trends have made a dramatic shift to drive-to destinations. This might be short term, but for now, markets within 2-5 hours of major metropolitan areas will see better performance.”
Included in the top five spots are the Florida Panhandle, South Jersey Shore, the Poconos, the Smokey Mountains, and Central Texas. “The megatrends include people not flying, not wanting to stay in properties where they have to take an elevator or share amenities,” reports Andrew McConnell CEO of rented.com.
When number crunching look at average daily rates from the lowest to the times with the highest demand. Also, check frequent pricing changes including daily adjustments for the destination. According to rented.com, this counts when marketing on VRBO and Airbnb.
Look at what prices vacation rentals are currently commanding during this COVID summer. According to VRBO a Poconos 3-bedroom two-bath house in popular Sunrise Pines is going for $228.57 a night.
Heading to the South Jersey Shore town of Seaside Heights is known for its boardwalk. A 3-bedroom two-bath condominium that is a 15-minute walk to the beach is listed on VRBO for $850 a night.
Important factors to consider when choosing where and what you will invest in are potential monthly rental income and annual appreciation. Consider that rental income is key to offset regular expenses now and equally important when you are ready to sell.
Additional destinations in the top 20 rankings included Phoenix, Arizona, Ocean City Maryland, Siesta Key, Florida, Charleston/Coastal, South Carolina, Hampton Roads, Virginia, Hudson Valley, New York, Leavenworth, Washington, Inland Empire, California, the Adirondacks, New York, Columbus, Ohio, Portland, Maine, Miami Metro Area, Florida and Omaha, Nebraska. Not all are your typical vacation destinations yet they meet rented.com’s criteria.
Top of mind for buyers should be how to maintain a vacation rental property to the highest safety and cleaning standards possible during this pandemic. “This is a record year for owners turning to professional vacation property managers to make sure all is done right and within safety guidelines and standards of care when renters check-in and out of properties,” explains McConnell. Buyers must check local and updated ordinances for short-term vacation rentals before signing that contract.
As we continue to define the “new normal” where traveling by plane is not the top choice drive-to destinations look to be the vacation of choice. At least for now.