Are you looking to invest in the luxury vacation real estate market? Many travelers now seek the luxury and comfort of a personal vacation rental over traditional hotels. This trend makes vacation rentals a promising investment opportunity. We have put together a list of some of the top destinations in the United States for investing in vacation rentals.
Destination # 1 – New York, New York
New York, New York, may have one of the most expensive real estate markets in the country, but it also boasts high demand. Each year, millions of tourists flock to New York City to experience its vibrant atmosphere and unique charm. While the city has a plethora of hotels, a small percentage of travelers prefer the privacy and luxury that comes with downtown apartments. While these properties can be pricey, obtaining the right loan could prove to be a profitable strategy.
Destination # 2 – Finger Lakes, New York
If the bustling city of New York isn’t your preference, consider a vacation rental in Finger Lakes, New York. This area is a popular travel destination for residents of New York City, boasting 11 beautiful lakes and numerous wine trails, making it a sought-after spot for summer vacations. The most lucrative rentals in the Finger Lakes are those with water access, but properties near the water can also yield a substantial profit.
Visio Lending offers a DSCR loan that New York residents and investors can take advantage of for funding vacation rental properties in the Finger Lakes.
Destination # 3 – Gatlinburg, Tennessee
Tourism in Gatlinburg, Tennessee, has surged as people discover its natural beauty throughout the year. Situated in the Great Smoky Mountains National Park, Gatlinburg is a popular vacation spot for outdoor enthusiasts. Many visitors seek an authentic mountain experience without sacrificing comfort. Spacious cabin retreats with accommodating amenities are currently in high demand, especially since Gatlinburg attracts larger or extended families.
Destination # 4 – Miami, Florida
Miami has maintained consistent tourism for many decades, often associated with luxury and glamour. While hotels in Miami are bustling, many visitors are in search of more lavish accommodations. Travelers celebrating a honeymoon or milestone birthday are typically willing to splurge on private condos with pools and large kitchens, making it an ideal location for short-term real estate investors.
Destination # 5 – Destin, Florida
For those interested in beachfront investments, Destin, Florida, is worth considering. Situated in the Florida panhandle, it took a few years for the beach town to gain popularity. However, it now boasts miles of beachfront and nature trails, along with an array of seafood restaurants and lively clubs, making it a popular spring break destination. Investing in a beachfront condo in Destin can be a lucrative choice.
Destination # 6 – Holland, Michigan
While Detroit and the upper peninsula attract much of Michigan’s attention, the state’s west coast is also a popular vacation destination. Holland offers a small-town atmosphere with numerous restaurants and stores. Additionally, the city attracts thousands of visitors annually for its tulip festival. Owning a vacation rental during this time almost guarantees a fully booked property.
Destination # 7 – San Francisco, California
As one of the busiest cities in the country, San Francisco is a profitable location for a vacation rental. While hotels are abundant in San Francisco, the rooms are often small, and amenities are limited. The real estate market in San Francisco has shown consistent growth year over year, indicating that properties are likely to maintain and potentially increase in value. Its proximity to the technology hub, Silicon Valley, also helps attract business travelers seeking the additional workspace provided by private rentals.
Destination # 8 – Lake Anna, Virginia
Lake Anna, Virginia, has experienced a surge in tourism in recent years. It was recently named the number one best place to buy a vacation home in 2023 by Vacasa, indicating that the demand is expected to continue rising. With affordable homes and high demand, Lake Anna is a suitable place for investors.
Destination # 9 – Okaloosa Island, Florida
Okaloosa Island is close enough to Destin, yet far enough to attract its own type of traveler. The island appeals to families and snowbirds seeking warmer weather year-round. Offering a walkable city and an easy vacation experience, investors can easily fill their rentals with an asset in Okaloosa Island.
Real estate investors interested in vacation rentals have numerous excellent options in the United States. Whether opting for a property nestled deep within a national park or overlooking the Atlantic Ocean, the right property has the potential to generate substantial income. It is important to research lending options and consider DSCR loans when financing your vacation rental investment project.
Image source: Hlib Shabashnyi @ Shutterstock