The COVID-19 pandemic has caused a massive surge in the number of people owning a secondary residence. Vacation rentals have become one of the most popular types of investments among beginning investors, and with market trends that occurred during the peak of the pandemic, it's no surprise. But where should you invest in vacation rental property? Lodgify looked at some of the markets that offer the best capitalization rates for short-term rentals (STRs). As a general rule, Lodgify suggests looking for a property with a capitalization rate between 4% and 6%.
While higher cap rates may offer a higher potential return, there may also be more risk involved.Mesa, Arizona played an important role in the COVID-19 housing market trends seen in the U. S. With a high daily Airbnb rate and a strong occupancy rate, Mesa offers great potential for short-term rental investments. That's probably why properties sell extremely fast in Mesa, with an average property of 19 days on the market before selling.Tucson, Arizona is another great place to invest in vacation rental property.
With more than 1,800 vacation rentals for sale, any smart investor will know that prices are likely to drop in the future. It would make Tucson an even better market to invest in.New York City is also an attractive option for investors. Manhattan's CAP rate reached 3.9%, while just a stone's throw away in Queens, the CAP rate is 5.03%. Your best investment should consider all of these factors, since no two equal CAP rates are created.Gulf Shores, Alabama tops home rental income list.
Vacation rental platforms (such as Airbnb or VRBO) are a great way to generate income from a short-term lease, and if your property is in high demand, you'll make even greater profits.Once you've made your vacation home investment, it's time to start marketing your property and fill your calendar with as many bookings as possible. Those who are prepared may find that their decision to enter vacation rental properties could pay off in the coming years.When it comes to choosing the best place to buy a vacation rental based on the appeal of the location, there are two things to keep in mind: walking score and local laws. Florida is a very popular market when it comes to vacation rentals because the laws there aren't very restrictive. Alaska has an extremely low walking score, which is to be expected.Some experts will say it's best to buy your vacation rental during the off-season, because that's when you're most likely to get a good deal.
After purchase, Vacasa supports the comprehensive vacation rental experience with local teams on the ground to expertly clean and maintain homes, along with a solid set of technology to ensure homeowners earn the most from their investment.When investors take the right steps to purchase a vacation rental property, they are more than likely to reap the many benefits offered by this investment. If you ever decide to go on a getaway, your vacation rental may be available for your personal use.Mashvisor only included cities and towns that allow non-owner occupied, short-term and vacation rentals to accommodate guests for less than 30 days when compiling this list of 10 destinations that promise to have the highest return on investment in the entire country. These are currently some of the best places in the United States to buy a vacation rental: Gulf Shores, Alabama; Mesa, Arizona; Tucson, Arizona; New York City; Albuquerque, New Mexico; Miami Beach, Florida; Orlando, Florida; San Diego, California; Honolulu, Hawaii; and Las Vegas, Nevada.If you want to buy a vacation rental in any of these markets, you'll have no problem finding guests for it. However, keep in mind that some municipalities may allow STRs but homeowners association rules may prohibit the use of a home as a vacation rental.
Owning a vacation rental property isn't just like investing in traditional real estate - there are many factors that need to be taken into consideration before making an investment.