The Best Place to Buy Vacation Rental Property 2022

Vacation rentals are very popular among investors due to the increase in the number of people who own a secondary residence that serves as a vacation rental. But what are the best places to buy vacation rental property in 2022? What are the best vacation rental markets this year?

In this guide, I will talk about vacation rentals, the appeal of investing in them, and the best markets for investing in a vacation rental in the year 2022 based on the latest market trends and Mashvisor’s data.

So, without further ado, let’s get into our 2022 guide to the best places for buying a vacation rental property! See where in the US you can find the best vacation rental markets!

How to Find the Best Place to Buy Vacation Rental Property 2022?

Vacation rentals are short-term rental properties that are considered secondary residences for the owner. What it means is that, unlike an investment short-term rental property, vacation rentals need to qualify as a secondary residence where the owner of the property resides for a number of days yearly.

Other than that, vacation rentals are just like any other short-term rental in that the owner can rent it out on a daily or weekly basis using platforms such as Airbnb in order to generate an extra income or cover the running costs of the property for the remainder of the year.

Despite the ongoing pandemic, vacation rentals remain very popular among people who were looking for a secondary residence to spend their time at during the lockdown.

It played a major role in the COVID-19 real estate market trends seen in the US housing market in the past couple of years. We saw the demand for secondary homes, especially in suburban areas, rose through the roof, leading to supply shortages and inflated prices that continue to this day, and that is expected to continue throughout 2022.

So, if you’re looking to join in on the trend of buying a secondary residence in of the best vacation rental markets 2022 in the US, you should consider buying one that can be run as a vacation rental. It will help generate an extra income stream and build up your financial future!

Related: How to Start a Vacation Rental Business: A Step-by-Step Guide

How to Choose the Best Place to Own a Vacation Rental

When you decide to buy a vacation rental property, and you’re looking for the best place to buy vacation rental property in 2022, there are a number of things that you need to take into consideration.

Firstly, you need to keep in mind that this is a property that you might want to use as a vacation retreat occasionally, so it’s important that it is a property that you like and enjoy spending time at, and that the location is somewhere that you like going to.

Secondly, you also need to remind yourself that this isn’t just a secondary residence, and while it’s important that it’s a location that you enjoy, it’s also important that it’s a profitable location in order to run a vacation rental there.

Thirdly, taking both of the above aspects into consideration, you need to find a balance between what you enjoy and what actually makes sense financially. If you think you’re going to be spending a lot of time in this property, then maybe you should prioritize a location that you enjoy over another location that promises a better return on investment but that you enjoy less.

Of course, while choosing a location based on its appeal is a matter of personal preference and is a decision that people can make on their own after researching the different locations, assessing a location based on its performance for short-term rentals is a whole different deal.

So, how do you find the best place to buy vacation rental property in 2022? And what tools can you use to help you find profitable properties to purchase?

Best Vacation Rental Markets in 2022

In real estate investing, there are a couple of ways to analyze locations and properties in order to project their future returns and performance as investment properties.

While vacation rentals aren’t strictly investment properties, in order to maximize the income that they generate you need to analyze them like any other rental investment property.

It usually means using metrics such as cap rate or CoC (cash on cash return) to see how much income the property will generate in relation to the money you’re investing in it.

In this guide to the best place to buy vacation rental property in 2022, I will be using the capitalization rate, which calculated the return on investment based on the net operating income divided by the property’s market value:

Cap Rate = Net Operating Income / Property’s Value

Using the cap rate metric, we can project each property’s return on investment to see how it will perform in the future.

Additionally, after you’ve gathered enough data from a certain market, you can analyze the market to see its average performance and compare properties with the average to see which ones are the best to invest in.

However, it seems like a lot of work, especially considering how hard it is to get your hands on reliable and up-to-date real estate data and property listings. You may need to browse through several lists of the best vacation rental markets to invest in before finding one that best suit your preferences and requirements.

For this reason, homebuyers and investors usually use online tools and platforms, as well as hire real estate agents, to help them find good investments.

Use Mashvisor to Find the Best Vacation Rental Markets

Mashvisor is a real estate platform that was designed to help real estate investors and homebuyers find the perfect properties to purchase anywhere in the US.

The platform offers a number of excellent tools to help you search through the different markets, find properties with specific traits or based on specific criteria, and analyze each property and market based on massive amounts of up-to-date data.

Using Mashvisor, you can easily find vacation rental properties that you can own based on the best long-term or short-term rental strategy to use.

Whether you’re looking for a property in a beautiful location and a high Walk Score, or if you’re looking for a property that will generate a lot of rental income – our Property Marketplace lists all kinds of properties for sale, including off-market properties, for-sale-by-owner, and foreclosures.

And now, using Mashvisor’s data and our machine-learning AI, these are the best places to buy a vacation rental property in 2022.

Best Cities for Investing in Vacation Rentals in 2022

Here are the top cities for investing in a short-term or vacation rental based on cap rates, divided into three categories based on the price range:

Best Place to Buy Vacation Rental 2022 (<$500k)

Here are the top places to purchase a vacation rental worth less than $500,000:

1. McGahey Ville, Rockingham County, VA

• Median Property Price: $458,229

• Average Property Size: 183.37 Sq. Ft.

• Occupancy Rate: 58.62%

• Airbnb Monthly Rental Income: $4,870

• Airbnb Daily Rate: $332

• Airbnb Cap Rate: 7.64%

• Traditional Monthly Rental Income: $1,360

• Traditional Cap Rate: 1.45%

• Walk Score: 17

2. Wisconsin Dells, Columbia County, WI

• Median Property Price: $333,960

• Average Property Size: 169.72 Sq. Ft.

• Occupancy Rate: 48.73%

• Airbnb Monthly Rental Income: $3,603

• Airbnb Daily Rate: $330

• Airbnb Cap Rate: 7.22%

• Traditional Monthly Rental Income: $1,053

• Traditional Cap Rate: 1.06%

• Walk Score: 71

3. Penn Yan, Yates County, NY

• Median Property Price: $429,920

• Average Property Size: 288.65 Sq. Ft.

• Occupancy Rate: 58.06%

• Airbnb Monthly Rental Income: $4,519

• Airbnb Daily Rate: $332

• Airbnb Cap Rate: 7.09%

• Traditional Monthly Rental Income: $2,019

• Traditional Cap Rate: 3.3%

• Walk Score: 77

4. North Charleston, Charleston County, SC

• Median Property Price: $346,402

• Average Property Size: 197.67 Sq. Ft.

• Occupancy Rate: 68.24%

• Airbnb Monthly Rental Income: $3,366

• Airbnb Daily Rate: $149

• Airbnb Cap Rate: 6.66%

• Traditional Monthly Rental Income: $1,328

• Traditional Cap Rate: 2.48%

• Walk Score: 77

5. Cape Coral, Lee County, FL

• Median Property Price: $495,117

• Average Property Size: 262.27 Sq. Ft.

• Occupancy Rate: 66.06%

• Airbnb Monthly Rental Income: $3,203

• Airbnb Daily Rate: $192

• Airbnb Cap Rate: 4.27%

• Traditional Monthly Rental Income: $1,546

• Traditional Cap Rate: 1.81%

• Walk Score: 77

Best Place to Buy Vacation Rental 2022 ($500k – $750k)

Here are the top places to buy a vacation rental for $500,000 to $750,000:

1. Galena, Jo Daviess County, IL

• Median Property Price: $548,60

• Average Property Size: 267.58 Sq. Ft.

• Occupancy Rate: 64.88%

• Airbnb Monthly Rental Income: $5,188

• Airbnb Daily Rate: $258

• Airbnb Cap Rate: 7.22%

• Traditional Monthly Rental Income: $854

• Traditional Cap Rate: -0.53%

• Walk Score: 76

2. Temecula, Riverside County, CA

• Median Property Price: $777,905

• Average Property Size: 351.52 Sq. Ft.

• Occupancy Rate: 65.01%

• Airbnb Monthly Rental Income: $7,382

• Airbnb Daily Rate: $442

• Airbnb Cap Rate: 6.95%

• Traditional Monthly Rental Income: $2,581

• Traditional Cap Rate: 1.96%

• Walk Score: 28

3. Joshua Tree, San Bernardino County, CA

• Median Property Price: $513,808

• Average Property Size: 407.61 Sq. Ft.

• Occupancy Rate: 62.31%

• Airbnb Monthly Rental Income: $3,998

• Airbnb Daily Rate: $240

• Airbnb Cap Rate: 5.37%

• Traditional Monthly Rental Income: $898

• Traditional Cap Rate: 0.17%

• Walk Score: 53

Related: Joshua Tree Airbnb: Should You Invest in 2022?

4. Nashville, Davidson County, TN

• Median Property Price: $622,873

• Average Property Size: 364.87 Sq. Ft.

• Occupancy Rate: 59.07%

• Airbnb Monthly Rental Income: $4,849

• Airbnb Daily Rate: $255

• Airbnb Cap Rate: 5.26%

• Traditional Monthly Rental Income: $1,951

• Traditional Cap Rate: 1.97%

• Walk Score: 32

5. Savannah, Chatham County, GA

• Median Property Price: $643,776

• Average Property Size: 279.88 Sq. Ft.

• Occupancy Rate: 65.1%

• Airbnb Monthly Rental Income: $4,225

• Airbnb Daily Rate: $188

• Airbnb Cap Rate: 5.08%

• Traditional Monthly Rental Income: $1,348

• Traditional Cap Rate: 0.74%

• Walk Score: 75

Best Place to Buy Vacation Rental 2022 (>$750k)

Here are the top places to purchase a vacation rental valued at more than $750,000:

1. Charleston City, Charleston County, SC

• Median Property Price: $1,288,599

• Average Property Size: 599.9 Sq. Ft.

• Occupancy Rate: 69.67%

• Airbnb Monthly Rental Income: $6,364

• Airbnb Daily Rate: $319

• Airbnb Cap Rate: 4.33%

• Traditional Monthly Rental Income: $2,374

• Traditional Cap Rate: 1.26%

• Walk Score: 41

2. South Lake Tahoe, El Dorado County, CA

• Median Property Price: $998,821

• Average Property Size: 658.14 Sq. Ft.

• Occupancy Rate: 67.35%

• Airbnb Monthly Rental Income: $4,816

• Airbnb Daily Rate: $305

• Airbnb Cap Rate: 4.19%

• Traditional Monthly Rental Income: $1,778

• Traditional Cap Rate: 0.7%

• Walk Score: 57

3. Sonoma, Sonoma County, CA

• Median Property Price: $1,906,995

• Average Property Size: 962.82 Sq. Ft.

• Occupancy Rate: 65.71%

• Airbnb Monthly Rental Income: $10,682

• Airbnb Daily Rate: $477

• Airbnb Cap Rate: 3.54%

• Traditional Monthly Rental Income: $2,658

• Traditional Cap Rate: 0.18%

• Walk Score: 55

4. Palm Springs, Riversdale County, CA

• Median Property Price: $958,689

• Average Property Size: 467.64 Sq. Ft.

• Occupancy Rate: 63.47%

• Airbnb Monthly Rental Income: $5,114

• Airbnb Daily Rate: $365

• Airbnb Cap Rate: 3.36%

• Traditional Monthly Rental Income: $3,052

• Traditional Cap Rate: 2.71%

• Walk Score: 59

5. Destin, Okaloosa County, FL

• Median Property Price: $962,737

• Average Property Size: 465.53 Sq. Ft.

• Occupancy Rate: 49.54%

• Airbnb Monthly Rental Income: $3,344

• Airbnb Daily Rate: $338

• Airbnb Cap Rate: 2.62%

• Traditional Monthly Rental Income: $2,055

• Traditional Cap Rate: 1.74%

• Walk Score: 52

Where Can I Find More Places to Buy a Vacation Rental?

If you’re not interested in investing in a vacation rental property in any of these best places in 2022 for any reason, fear not! You can look at our market forecasts and reports to find other suitable places or lists of best places to buy short-term rentals in specific states.

Related: 2022 Real Estate Market Forecast: 10 Predictions

Additionally, if you subscribe to and start using Mashvisor’s platform, you will also be able to access all of the markets’ data and analytics at your convenience!

One of the options that Mashvisor offers is a market report, which is an Excel sheet of a specific market or neighborhood that includes all of that market’s stats and listings for you to analyze and choose from.

Bottom Line

The best place to buy a vacation rental property in 2022 depends on your personal preferences. Whether you’re looking for a breathtaking place to enjoy your vacation days away from the city, or if you’re looking for a lucrative property that will yield you a profit, in the long run, our lists of best vacation rental property markets include options for both.

Don’t forget to check out Mashvisor’s platform if you’re looking for more market forecasts and guides like this one, and subscribe to gain access to a wide range of tools that will make your life as an investor much easier!

To access Mashvisor’s real estate investment tools, click here to sign up for a 7-day free trial today, followed by 15% off for life.