If you are on our website, chances are you might be looking for options to start a real estate investing business. If this is the case and you are aspiring to become a real estate investor, you might be wondering what the best way to begin your real estate investments career is. Buying and owning a vacation home might easily be one of the most convenient ways to enter the exciting world of real estate investing. Why? Because in addition to providing you with a free accommodation for your annual holidays, a vacation home also gives you the opportunity to rent out your real estate property for the rest of the year. To make things even better, you can benefit from available tax deductions.
Related: Why It Totally Makes Sense to Rent Out Your Vacation Homes
But then comes another important real estate investments question. Namely: What’s the best location to buy a vacation home at the end of 2017 or the beginning of 2018? There are a few top locations for buying a vacation home as your first real estate investment property, and New York State is one of them. This comes as no surprise for those who know that New York State is one of the top 5 states for tourism in all of the US. But once again, New York State is so huge that any aspiring real estate investor needs to know the specific best places to buy a vacation home in New York State before taking any actions in this direction. Whether you are a new or experienced real estate investor, don’t worry, this article aims to answer precisely this of the many real estate investments questions you might have on your mind: What are the best places to buy a vacation home in New York State?
Related: The 7 Best Places to Buy a Vacation Home in Florida
What Makes for the Best Places to Buy a Vacation Home in New York State?
Location
You might be noticing a trend here. It seems that real estate investing is all about asking the right questions and finding the best answers. That’s why it is time to address another one of the many real estate investments questions: What makes for the best places to buy a vacation home in New York State? Like you must know as a new or experienced real estate investor, location is (nearly) everything in real estate investing. The location of an investment property – be it a vacation home, a single family property, an apartment, or a condo – is the key factor determining the success of a real estate investment. And naturally the success of a real estate investment is determined by its profitability, or how much money it will be able to make for its owner. In other words, to make things as simple as possible for new or experienced real estate investors, the best location to buy an investment property is the location which will generate the highest return on investment.
Cash on Cash Return
While there are several different methods to measure return on investment in the world of real estate investing (including rental income, cash flow, cash on cash return, and cap rate), the majority of real estate experts agree that cash on cash return is the single best metric of the profitability of an investment property, or how much money it will make for its owner. Cash on cash return is a better metric than cap rate. While the cap rate does not make a difference between an investment property paid for fully in cash and an investment property paid for through a mortgage, cash on cash return differentiates between the financing methods, and the method of financing is very important for real estate investments.
In case you need to refresh your memory on how to calculate cash on cash return for a real estate investment property, here is the formula:
Cash on cash return formula:
Cash on Cash Return = Net Operating Income (NOI)/Total Cash Investment
Airbnb Rental Strategy
Before we move further on in our discussion about the best places to buy a vacation home in New York State, we need to make another clarification or rather to answer one more of the many real estate investments questions: What’s the best rental strategy for renting out a vacation home? The answer is a straightforward one this time: The Airbnb rentals strategy. This is only logical because you buy a vacation home in order to serve a dual purpose: to spend your annual holidays there and to rent it out for the rest of the year. Since the traditional rental strategy usually includes leasing agreements for a period of one year, real estate investors interested in buying and owning a vacation home resort to the Airbnb rental strategy. As an aspiring real estate investor, you should always keep in mind that the traditional rental strategy and the Airbnb rental strategy actually yield very different return on investment in terms of rental income, cash flow, cash on cash return, and cap rate.
Related: The Best Rental Real Estate Strategies for Beginners
So, we have now settled that the best places to buy a vacation home in New York State would be those cities, towns, and potentially even villages which yield the highest Airbnb cash on cash return for real estate investment properties.
Are Airbnb Rentals Legal in New York State?
Before we talk about the best places to buy a vacation home in New York State defined as the locations which yield the highest Airbnb cash on cash return, we should know whether Airbnb rentals are at all legal in New York State. Any and every new or experienced real estate investor should always check the legal situation of Airbnb rentals as soon as he/she starts thinking about this rental strategy. Airbnb rentals have attracted hatred from hotels and homeowners alike (though for different reasons), who have been pushing hard to force local state and city legislators to ban this rental strategy.
Related: Cities With The Least Airbnb Legal Issues
Unfortunately for an aspiring real estate investor, the legal situation of Airbnb rentals in New York State is complicated, to say the least. There are ways to be an Airbnb host in New York State legally, but you have to take into consideration many laws and regulations. For example, the New York State Multiple Dwelling Law prohibits transient rentals of fewer than 30 days in multi family properties (with three or more housing units) unless the owner is present at the same time as the Airbnb guest. Though this law sounds limiting, there are ways to circumnavigate it:
- Buying and owning a single family property or a duplex: Most vacation homes are a single family property (particularly a house) anyway, and the Multiple Dwelling Law does not talk about a single family home or a duplex specifically.
- Renting out for more than 30 days at a time: Since you are looking at the best places to buy a vacation home in New York State, chances are many Airbnb guests would be interested in renting your rental property (vacation home) for 30 days or more.
- Renting out while you are there: In case of renting out a vacation home which is a multi family property for fewer than 30 days, you could do that while you are using your property. This is possible because we are talking about a multi family property anyway, so there are a few housing units to host you and your Airbnb guests comfortably. In case you are a freelancer, you could easily spend lots of time in your vacation home rather than in your primary residence.
In any case, before deciding to buy a vacation home in New York State to take advantage of the profitability of Airbnb rentals there, it is best for a new or experienced real estate investor to hire a real estate attorney and discuss the specific situation with him/her. That’s the only way to make sure that you are complying with all existing laws and that you will be making money from your Airbnb rentals through positive cash flow rather than losing money due to fines.
What Data Do We Use to Determine the Best Places to Buy a Vacation Home in New York State?
A new or experienced real estate investor should similarly know the importance of data in real estate investing. Having the correct data at the right time is what will decide whether you are making money or losing money from your real estate investments. So, here we come at another one of the many real estate investments questions: Where can we find the best, most accurate, and most reliable data to locate the best places to buy a vacation home in New York State? Mashvisor, of course! Mashvisor’s investment property calculator will first of all provide any aspiring real estate investor with the best numbers related to the profitability of an investment property (return on investment) in terms of rental income, cash flow, cash on cash return, and cap rate. All calculations are based on traditional and predictive real estate analytics, which makes them very accurate and reliable. Best of all – all numbers generated by Mashvisor’s investment property calculator are divided for the traditional rental strategy and the Airbnb rental strategy. If you are still not convinced of the beauty of Mashvisor’s investment property calculator as a beginner real estate investor, you just need to hear this: Mashvisor’s investment property calculator will eliminate the need to conduct real estate market analysis and investment property analysis.
Related: Mashvisor’s Investment Property Calculator: Real Estate Investing Made Easier
So, to confirm for all interested real estate investors: When ranking the best places to buy a vacation home in New York State in this article, we use the cash on cash return for the Airbnb rental strategy computed by Mashvisor’s investment property.
Related: 10 Most Profitable Locations for Short-Term Rentals at the End of 2017: Cash on Cash Return
Before you even choose a market where to buy a short term rental property, you should check out what’s required for becoming an Airbnb host to make sure you are interested in this profitable opportunity.
So, What Are the Best Places to Buy a Vacation Home in New York State?
All aspiring real estate investors must be excited to read the following ranking of the best places to buy a vacation home in New York State. After all, these are the locations (cities, towns, and villages) which will be making money for real estate investments at the end of 2017 or the beginning of 2018. Here are the 8 best places to buy a vacation home in New York State:
1. Ellenville
- Median Property Price: $130,000
- Monthly Airbnb Rental Income: $3,990
- Airbnb Cash on Cash Return: 31.2%
- Airbnb Cap Rate: 31.2%
- Monthly Traditional Rental Income: $1,320
- Traditional Cash on Cash Return: 6.6%
- Traditional Cap Rate: 6.6%
Any new or experienced real estate investor would be excited to hear that Ellenville is the #1 among the best places to buy a vacation home in New York State. The cash on cash return for Airbnb rentals in Ellenville computed by Mashvisor’s investment property calculator is phenomenal: 31.2%!!! To be honest, that’s a return on investment that is rarely achievable, so all aspiring real estate investors should seriously consider Ellenville as the location for their next vacation home (rental property) purchase. How is this possible? This high profitability is the result of low median property price and high monthly Airbnb rental income.
But do you know what makes Ellenville an even more excellent location for buying and owning a vacation home as your first (or next) investment property? The fact that the traditional rental strategy also yields pretty decent return on investment in the form of traditional cash on cash return of 6.6% and traditional cap rate of 6.6%. Even if you are determined to have your investment property in Ellenville as a vacation home now, you might always change your mind in the future and decide to rent it out full time down the road. Thus, it’s good to know for any real estate investor interested in buying a rental property in New York State that Ellenville is also a good location for the traditional rental strategy.
2. Lodi
- Median Property Price: $244,000
- Monthly Airbnb Rental Income: $4,510
- Airbnb Cash on Cash Return: 24.6%
- Airbnb Cap Rate: 24.6%
- Monthly Traditional Rental Income: –
- Traditional Cash on Cash Return: –
- Traditional Cap Rate: –
Without further ado, Lodi is the second among the best places to buy a vacation home in New York State, according to data from Mashvisor’s investment property calculator. What any new or experienced real estate investor needs to hear is that Lodi yields return on investment for Airbnb rentals of 24.6% in the form of cash on cash return. That’s all that is required to convince you to explore the options of buying and owning a vacation home there, right? After all, anyone would like to have a rental property with this kind of profitability.
A serious downside to buying and owning a vacation home in Lodi is that renting out an investment property via the traditional rental strategy is not a good idea there. But which aspiring real estate investor would even think about the traditional rental strategy with an Airbnb cash on cash return of 24.6%?!
3. Coxsackie
- Median Property Price: $200,000
- Monthly Airbnb Rental Income: $4,060
- Airbnb Cash on Cash Return: 24.2%
- Airbnb Cap Rate: 24.2%
- Monthly Traditional Rental Income: $1,710
- Traditional Cash on Cash Return: 3.3%
- Traditional Cap Rate: 3.3%
Another top location in our list of the best places to buy a vacation home in New York State is Coxsackie, as demonstrated by computations from Mashvisor’s investment property calculator. The Airbnb cash on cash return in Coxsackie is nearly the same as in Lodi, while the median property price is even more affordable.
If you are paying close attention to the numbers from Mashvisor’s investment property calculator, and you should be if you are an aspiring real estate investor, the numbers for the Airbnb cash on cash return and the Airbnb cap rate (as well as the numbers for the traditional cash on cash return and the traditional cap rate) are the same. That’s not a mistake, don’t worry. This is so because Mashvisor’s investment property calculator considers that all real estate investment properties purchases are made fully in cash.
4. Auburn
- Median Property Price: $117,000
- Monthly Airbnb Rental Income: $2,800
- Airbnb Cash on Cash Return: 23.1%
- Airbnb Cap Rate: 23.1%
- Monthly Traditional Rental Income: $840
- Traditional Cash on Cash Return: 4.1%
- Traditional Cap Rate: 4.1%
#4 in our list of the best places to buy a vacation home in New York State is Auburn. Although the monthly Airbnb rental income here is significantly lower than in the previous top three locations, the median property price is also much more affordable, which eventually yields an excellent return on investment. Cash on cash return for Airbnb rentals of 23.1% is not something that real estate investors face often, so definitely do consider Auburn as a top choice for the location of your first (or next) vacation home and rental property. Worse goes to worse, the traditional rental strategy is also an option here.
5. Geneva
- Median Property Price: $125,000
- Monthly Airbnb Rental Income: $2,980
- Airbnb Cash on Cash Return: 23.0%
- Airbnb Cap Rate: 23.0%
- Monthly Traditional Rental Income: $1,040
- Traditional Cash on Cash Return: 5.5%
- Traditional Cap Rate: 5.5%
Next in our ranking of the best places to buy a vacation home in New York State is Geneva. The median property price here is very affordable, while the monthly Airbnb rental income is great. As a result, according to Mashvisor’s investment property calculator, the Airbnb cash on cash return is 23.0%. In simple words, you don’t need to be one of the real estate experts to know that’s amazing. Any new or experienced real estate investor should explore further the real estate investments opportunities in Geneva as the last location with double-digit return on investment for Airbnb rentals in New York State.
Related: Rental Income from Airbnb
An added advantage is that the traditional rental strategy also yields decent profitability for real estate investors.
6. Albany
- Median Property Price: $225,000
- Monthly Airbnb Rental Income: $1,830
- Airbnb Cash on Cash Return: 8.4%
- Airbnb Cap Rate: 8.4%
- Monthly Traditional Rental Income: $1,280
- Traditional Cash on Cash Return: 2.7%
- Traditional Cap Rate: 2.7%
Mashvisor’s investment property calculator tells aspiring real estate investors that Albany is #6 among the best places to buy a vacation home in New York State. The median property price is still affordable, while the monthly Airbnb rental income is very good. Now, you as an aspiring real estate investor will notice that the Airbnb cash on cash return here is a single digit, which brings us to another of the many important real estate investments questions: What’s good cash on cash return?
Related: An Investment Property Calculator Is a Must. Read Here Why
Most real estate experts would hurry to tell you that you should always aim for real estate investment properties with cash on cash return – regardless of whether for the traditional rental strategy or the Airbnb rental strategy – of 8-12%. Now, that’s great, of course, but to be honest, such return on investment is not always feasible. In practical terms, anything about 4-5% of cash on cash return is a great return on investment in real estate investing. So, any aspiring real estate investor should be more than happy with Airbnb cash on cash return of 8.4% in Albany.
Related: What is a Good Cash on Cash Return?
7. Troy
- Median Property Price: $162,000
- Monthly Airbnb Rental Income: $1,420
- Airbnb Cash on Cash Return: 7.4%
- Airbnb Cap Rate: 7.4%
- Monthly Traditional Rental Income: $970
- Traditional Cash on Cash Return: 3.3%
- Traditional Cap Rate: 3.3%
Going back to an even more affordable median property price, Troy comes as #7 in our ranking of the best places to buy a vacation home in New York State, according to Mashvisor’s investment property calculator. The return on investment is excellent for Airbnb rentals here, so whether a new or experienced real estate investor, you should further explore the real estate investments options in Troy.
8. Ithaca
- Median Property Price: $299,000
- Monthly Airbnb Rental Income: $1,740
- Airbnb Cash on Cash Return: 6.4%
- Airbnb Cap Rate: 6.4%
- Monthly Traditional Rental Income: $1,530
- Traditional Cash on Cash Return: 3.6%
- Traditional Cap Rate: 3.6%
Last but not least, Ithaca is yet another one of the best places to buy a vacation home in New York State at the end of 2017 or the beginning of 2018. The median property price is the least affordable in this ranking based on data from Mashvisor’s investment property calculator, but the Airbnb cash on cash return is still excellent, to make Airbnb rentals fully worth it.
Aspiring real estate investors, as we said before, location is (nearly) everything in the real estate investing business as location is the key factor determining the profitability (return on investment) of your real estate investment properties. New York State is only a natural top location for buying a vacation home, keeping in mind that it is one of the 5 best states for tourism in all of the US. The ranking of the 8 best places to buy a vacation home in New York State comes to give any new or experienced real estate investor an important lesson: New York City is not the only place to invest in real estate in New York State. Actually, it is not at all among the best places to buy a vacation home in New York State for many reasons including the median property price, the strict Airbnb rentals laws, and others. To assure high profitability as a real estate investor, follow our advice for the 8 best locations to buy a vacation home in New York State above.
When you are ready to start buying your vacation home in New York State, use Mashvisor’s investment property calculator to find the most profitable real estate investment property in your location of choice among the best places to buy a vacation home in New York State.
