Vacation rentals for sale have become increasingly popular with real estate investors all over the world. When home-sharing online platforms like Airbnb started more than a decade ago, many short-term rental owners earned substantial income from this investment strategy.
Short term rental properties are rented out for no more than 30 days at a time, and they typically come with the potential to generate a higher return on investment than long-term rental properties.
Why You Should Consider Investing in Vacation Rentals
When the tourism industry was adversely affected following the onset of the pandemic in early 2020, most vacation rental owners also suffered the same negative impact. Thanks to the availability of the COVID-19 vaccines, we are now on our road to becoming endemic, and the world is slowly returning to normalcy.
In mid-2021, many states in the U.S. began reopening their doors to visitors from across the country. And now, as many people from all over the world are getting vaccinated against COVID-19, we can expect an influx of tourists to visit the United States again. It means that the demand for vacation rentals will significantly increase, opening more opportunities for new vacation rental investors.
If you want to take advantage of the opportunity, now is a good time to invest in short-term rental properties. Aside from the expected surge in demand for vacation rentals in 2022, you can enjoy tons of other benefits from buying an Airbnb property.
Here are several reasons why investing in vacation rentals for sale is a good idea:
1. Higher Rental Income
When you choose a good location for your Airbnb investment, vacation rentals can generate a higher income compared to most traditional rental properties. For example, many investors are looking for vacation rentals for sale in Florida because the Sunshine State is a famous tourist destination any time of the year. It means that visitors are expected to flock to Florida, giving Airbnb owners good business.
2. Diversification
If you own other types of investments, investing in vacation rentals for sale is a great way to build and diversify your portfolio. Asset diversification will help protect your investments from market volatility. If you own other existing income properties, short-term rentals can also be a great addition to your assets.
3. Passive Income
If you’re a new investor, you may want to test the waters by renting out an extra space from an owner-occupied property. It allows you to earn passive income. Also, since most vacation rentals are seasonal businesses, you don’t need to spend too much time managing your investment.
4. Wide Selection of Properties
Short-term rentals come in all sizes, shapes, and prices, ranging from mountain chalets to studio apartments, beach houses, cabins, or even tree houses. If you’re an adventurous type of person, you may find investing in unique property types interesting.
5. Tax Benefits
You can deduct some of your expenses from your taxable income, including repairs, utilities, loan interest, property management fees, property taxes, depreciation, legal fees, and more.
6. Availability of Renters
The availability of online vacation rental marketplaces, such as Airbnb and VRBO, makes it easy for investors to advertise their properties and find tenants. Additionally, since many people are ready to travel after being locked in for almost two years due to the pandemic, you can expect to see your vacation rental property occupied as long as it’s located in an area that’s frequented by visitors.
7. Free Vacation Home
Though your vacation home is primarily for real estate investment, you can also enjoy it occasionally for yourself and your family without having to pay anything.
There are different types of vacation rentals for sale, including multi-family homes, single-family homes, beach houses, and condos. You need to consider the pros and cons of each type when looking for vacation rentals for sale. Moreover, you also need to take into account your target market to ensure that you’re investing in the right location.
How to Find Vacation Rentals for Sale
One of the most challenging steps in investing in short-term rentals is finding the right investment property. As mentioned, there are several factors that you need to consider before making a decision.
The most important one is the location of your income property, as it can either make or break your investment. Once you’ve chosen the right location, you can start searching for vacation rentals for sale, then perform a comprehensive real estate analysis to compare which one would make the best investment.
Here are a few ways on how to find vacation rentals for sale:
1. Network
One of the best ways of finding vacation rentals for sale is by networking widely. Through networking, you may find vacation rental property that other real estate investors don’t know about. You may even be able to buy it at a lower price. You can network at vacation rental investment clubs or organizations where members share information about properties for sale. If you don’t belong to any, you can join one for an annual membership fee of as little as $100.
However, it’s not just the people directly involved in real estate that can provide leads to great investments. Family and friends can also be useful sources of information about potential investment properties. They may know someone who is willing to sell a vacation home quickly and at an affordable price.
In addition, professional contacts such as contractors, attorneys, and accountants can also come in very handy for prospecting. Also, if you can find vacation rentals for sale by owner, it’s best to buy directly from them as it can help you save time negotiating with a middle man.
2. Check Online
A simple Google search using terms such as “real estate for sale,” “for sale by owner,” “short sale,” and “foreclosure” will reveal numerous websites containing listings of investment properties for sale. Alternatively, you can visit sites such as Mashvisor.com directly to find not only profitable properties but also the best places to buy vacation homes. The platform offers the following tools:
- Heatmap Analysis
Real estate investors can use the Heatmap Analysis tool to find neighborhoods with the most lucrative vacation rentals. You can search for neighborhoods using filters such as rental income, listing price, cash on cash return, and Airbnb occupancy rate.
Related: Best Cities for Airbnb Investment 2022: Where Should You Invest?
- Property Finder
The Property Finder tool uses the latest machine-learning algorithms and predictive analytics to help investors find rental properties that match their search criteria. By looking at people’s behavioral, financial, and social patterns, the AI can then give suggestions about the best properties to invest in. It uses filters such as miles, location or city, budget, rental strategy, number of bedrooms, and number of bathrooms.
- Investment Property Calculator
With an investment calculator, you don’t need to manually calculate metrics for real estate listings. The Mashvisor rental property calculator provides calculations for cash on cash return, capitalization rate, and cash flow. Additional features include neighborhood analysis, investment property analysis, and optimal rental strategy.
Start looking for a profitable vacation rental for sale today using these tools and more.
3. Check Print Media
Since some properties might not be advertised online, be sure to check print media for local listings of vacation rentals for sale. If you are looking for realtor-listed properties and vacation rentals for sale by owner, newspapers can be a great source of information. Check the large publications for your region, as well as smaller newspapers targeting specific communities. Besides newspapers, you should also look at local real estate magazines and journals.
Related: Where Can You Find Airbnb Properties for Sale?
4. Visit Property Auctions
You can find a great deal on vacation rentals for sale at property auctions. There are different types of auctions to consider:
- Online auctions: With online auctions, everything is conducted on an online platform, including bidding.
- Sheriff sale auctions: A sheriff sale auction is carried out in the county’s courthouse, hall of records, city hall, or sheriff’s office. Such auctions usually involve the sale of foreclosures to the public.
- Private company auctions: Such types of auctions are usually well advertised and held at a local conference center or hotel.
Related: A Quick Guide to Buying a Property at Auction
5. Work with a Real Estate Agent
Real estate agents are usually well informed about investment opportunities in their area. They can not only help you find an Airbnb vacation home rental but could also help negotiate a favorable deal. A Google search using the term “real estate agent [your area]” will give you a list of agents available in your target neighborhood.
Alternatively, you can also check local property listings to find the contact information of agents. Attending open houses and real estate seminars is another excellent idea for real estate investors to meet with different agents and brokers personally.
Top Locations for Vacation Rentals for Sale in 2022
Choosing the right location for your investment property is crucial, as it can significantly affect your profitability. The best locations for vacation rentals are those that are close to most tourist attractions and are frequently visited by visitors all year round.
For example, buying Florida vacation rentals for sale can be a good idea since the state enjoys a warm climate most days of the year. If you buy a vacation rental property near the beach, you’ll most likely get a high occupancy rate.
Aside from choosing the right city, you also need to make sure to choose a specific neighborhood that is generally safe for your guests and has a low crime rate. In addition, choosing a neighborhood that is close to basic amenities like public transportation, dining, and shopping centers is a good idea. Also, consider the walk score of the specific area as most tourists prefer a place that is mainly walkable.
Based on Mashvisor’s data as of May 2022, here are the top locations for vacation rentals based on Airbnb cash on cash return (arranged from highest to lowest):
1. Olyphant, PA
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- Median Property Price: $256,760
- Average Price per Square Foot: $113
- Monthly Airbnb Rental Income: $2,602
- Airbnb Cash on Cash Return: 9.91%
- Airbnb Daily Rate: $148
- Airbnb Occupancy Rate: 67%
- Days on Market: 91
- Walk Score: 64
2. Ingleside, IL
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- Median Property Price: $333,800
- Average Price per Square Foot: $167
- Monthly Airbnb Rental Income: $4,603
- Airbnb Cash on Cash Return: 9.76%
- Airbnb Daily Rate: $344
- Airbnb Occupancy Rate: 57%
- Days on Market: 79
- Walk Score: 22
3. Freeville, NY
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- Median Property Price: $296,800
- Average Price per Square Foot: $159
- Monthly Airbnb Rental Income: $4,786
- Airbnb Cash on Cash Return: 9.74%
- Airbnb Daily Rate: $197
- Airbnb Occupancy Rate: 54%
- Days on Market: 77
- Walk Score: 21
4. Coventry, CT
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- Median Property Price: $342,933
- Average Price per Square Foot: $184
- Monthly Airbnb Rental Income: $3,783
- Airbnb Cash on Cash Return: 9.68%
- Airbnb Daily Rate: $185
- Airbnb Occupancy Rate: 68%
- Days on Market: 47
- Walk Score: 17
5. Lincoln Park, MI
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- Median Property Price: $154,109
- Average Price per Square Foot: $110
- Monthly Airbnb Rental Income: $2,468
- Airbnb Cash on Cash Return: 9.65%
- Airbnb Daily Rate: $103
- Airbnb Occupancy Rate: 65%
- Days on Market: 78
- Walk Score: 80
6. Walland, TN
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- Median Property Price: $1,061,307
- Average Price per Square Foot: $362
- Monthly Airbnb Rental Income: $3,707
- Airbnb Cash on Cash Return: 9.54%
- Airbnb Daily Rate: $242
- Airbnb Occupancy Rate: 57%
- Days on Market: 69
- Walk Score: 3
7. Molalla, OR
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- Median Property Price: $969,989
- Average Price per Square Foot: $433
- Monthly Airbnb Rental Income: $5,521
- Airbnb Cash on Cash Return: 9.53%
- Airbnb Daily Rate: $141
- Airbnb Occupancy Rate: 66%
- Days on Market: 103
- Walk Score: 72
8. Middlebury, IN
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- Median Property Price: $374,838
- Average Price per Square Foot: $175
- Monthly Airbnb Rental Income: $4,285
- Airbnb Cash on Cash Return: 9.46%
- Airbnb Daily Rate: $159
- Airbnb Occupancy Rate: 71%
- Days on Market: 66
- Walk Score: 48
9. Marrero, LA
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- Median Property Price: $270,960
- Average Price per Square Foot: $120
- Monthly Airbnb Rental Income: $4,886
- Airbnb Cash on Cash Return: 9.46%
- Airbnb Daily Rate: $239
- Airbnb Occupancy Rate: 56%
- Days on Market: 84
- Walk Score: 64
10. Marianna, FL
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- Median Property Price: $317,743
- Average Price per Square Foot: $178
- Monthly Airbnb Rental Income: $4,161
- Airbnb Cash on Cash Return: 9.04%
- Airbnb Daily Rate: $162
- Airbnb Occupancy Rate: 49%
- Days on Market: 60
- Walk Score: 62
The Bottom Line
Unlike traditional rentals, vacation rentals are usually a seasonal business. For instance, a short-term rental property next to a ski resort will be in demand during winter. On the other hand, a beach house will attract more people during the summer.
Therefore, when looking for vacation rentals for sale, be aware of what to expect during both peak and low seasons. Before choosing a property to buy, it’s crucial to do your research to find out the monthly expenses that you need to spend. Moreover, since running a vacation home involves a lot of work, you should consider the costs of hiring a property manager if you cannot manage it yourself full-time.
When you’re ready to look for the perfect investment property for short-term rentals, use Mashvisor’s investment property search tool and we’ll help you get started.
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