If you want to make money with your vacation rental property, it is essential you have a good vacation rental business model before you make a purchase. A market analysis is the first step in deciding where to buy vacation rental property.
Where to buy, what to pay, and what necessary upgrades you’ll have to make to the property are determined through a well-researched market analysis. This lets you set competitive prices, get bookings quickly, pay for up-front operational costs, and make a good profit.
To make this easier, we’ve put together a list of the top places you should look at if you’re considering a vacation rental business!
The Top Eight Best Places to Start a Vacation Rental Business
Maggie Valley, North Carolina
Located near Asheville, North Carolina in the Smoky Mountains, the view from Soco Craft and Tower is considered the most photographed view in the Smokies. Despite its popularity, low real estate costs offer property that yield a median income of $38,949 per year.
The homes that perform best here have fire pits, hot tubs, and decks.
Thanks to Dolly Parton, Sevierville, Tennessee is a one-woman tourism miracle. This scenic corner of Great Smoky Mountains National Park is home to beautiful scenery, great shopping, and of course, Dollywood. The theme park and resort has become Tennessee's biggest attraction with almost three million visitors annually. Be sure to check out nearby Pigeon Forge while you’re in the area, too.
Median home sale prices are relatively low at $239,976. And except for a rare snow-bound winter weekend, produce revenue all year long.
Hot Springs, Arkansas
Named for its mineral-rich bubbling hot springs and Hot Springs National Park, the most attractive aspect of starting a vacation rental business in Hot Springs is that a dollar stretches far here.
With a median home price of $148,000 a rental home here can yield a healthy average $24,425 per year in revenue. Some amenities that will make this an attractive rental destination are lake views and dock access.
The Poconos, Pennsylvania
There is a great demand for accommodations here as the Pocono Mountain region has been drawing tourists to its ski resorts and lakes for over 100 years. There is a strong demand for accommodations with a sizable inventory of affordable real estate. Income possibilities in the Poconos range from $25,000 to $42,000 per year.
The best properties have lakefront access and accommodate groups. This traditional market has many outdated houses that are perfect to purchase and renovate. Adding modern bathrooms, kitchens, and furnishings allow you to beat the competition while also charging higher nightly rates.
Big Sky, Montana
Big Sky — the gateway to Yellowstone National Park — is a highly sought-after ski destination due to its annual snowfall that can accumulate up to 400 inches. A property here is a great investment since Big Sky is a year-round destination that offers everything from skiing, snowshoeing and dog sledding, to fly-fishing and golfing.
The town sits in the shadow of 11,166-foot Lone Mountain just 47 miles north of Yellowstone and 55 south of Bozeman, with an airport offering nonstop to 17 major U.S. cities by seven airlines.
Dauphin Island, Alabama
Known as the Sunset Capital of Alabama, this 14-mile barrier island off the state’s Gulf of Mexico coast is home to 1300 permanent residents and dozens of bird species as it is a protected bird sanctuary.
Attractions on the island include the Dauphin Island Sea Lab, the Audubon Bird Sanctuary, historic Fort Gaines, public golf courses, parks, marinas, and white sand beaches. With a median home sale price of $345,281, the conversion to revenue rate is one of the highest on the Gulf Coast.
Saint Augustine, Florida
Picking from so many great beach towns in Florida can be a challenge. The beautiful beaches and warm weather allow for year-round tourism, which means a property can generate income throughout much of the year. But, out of all these choice locations, St. Augustine could prove to be the best place in the Sunshine State for starting a vacation rental business.
With a median home price of $209,100, realizing a median revenue over $50,000 is more than doable. Add amenities like a hot tub, private pool, and proximity to the beach to further increase the potential for income.
Located five hours north of New York City by car, and three and a half hours from Boston — Killington, Vermont boasts the largest ski area in the East. Summer activities like golf, shopping, mountain biking, ATV rides, and summer concerts ensure this is a year-round revenue investment.
Burlington, Vermont offers the nearest airports and the median home sale is a low $208,828.
Surfside Beach, Texas
This Texas town that lies an hour down the coast from Galveston is known for its laid-back community and beautiful beaches. There are few tourist traps in the area, and most Surfside Beach visitors spend evenings enjoying the sunset and eating a family dinner together. Because of this, fully-equipped vacation rentals with kitchens and utensils are the most successful in the area.
Ocean views with proximity to the beach are a must. Fortunately, beachfront real estate is still fairly easy to come by.
Getting your Vacation Property Ready to Rent
It is important to not get ahead of yourself, even after you’ve chosen a location to set up shop. Before advertising your property anywhere, make sure it is ready to rent. That includes repairs, furnishing, decorations, and a professional photo shoot to show off all the details.
To get you started, you can take an Airbnb property management course to help you navigate the ins and outs of starting a vacation rental business.