How to Find the Best Vacation Rentals for Sale

In recent years, vacation rentals for sale have become increasingly popular with real estate investors across the US market for good reasons.

Table of Contents

1. Why You Should Consider Investing in Vacation Rentals
2. 5 Risks of Investing in Vacation Rentals & How to Avoid Them
3. How to Find Vacation Rentals for Sale
4. Top Locations for Vacation Rentals for Sale in 2022

When home-sharing online platforms like Airbnb appeared more than a decade ago, many short term rental owners started earning substantial income from this investment strategy. Airbnb rental properties are rented out for no more than 30 days at a time and typically come with the potential to generate a higher return on investment than long term rentals.

This attracted more and more beginner and experienced investors to this profitable rental strategy. But it also raised an important question: How do you find the best vacation rental properties for sale?

In this article, we will look at the pros of buying a short term rental, the risks you should avoid, the steps needed to locate the top-performing opportunities, and the best markets for vacation rentals. In addition, you will learn how the Mashvisor Airbnb analytics platform can help you speed up and optimize your real estate investment decisions.

Let’s get started right away so that you can become a successful vacation rental host in no time.

Why You Should Consider Investing in Vacation Rentals

When the onset of the COVID-19 pandemic in early 2020 hit the tourism industry hard, most vacation rental owners suffered a lot. Thanks to the availability of the COVID-19 vaccines and the changing nature of the virus, we are now well on the road to returning to normalcy.

In mid-2021, many states in the US began reopening their doors to visitors from across the country. Subsequently, limitations on international travel started dropping too. In 2022, we are witnessing unprecedented levels of travel and tourism in the US market as people want to make up for the lost opportunities during the pandemic-induced lockdowns.

The resurgence in tourism activities means that demand for vacation rentals from both domestic and international travelers will increase significantly. It, in turn, will open more investment options for new and old short term rental property investors.

If you want to take advantage of the opportunity, now is a good time to invest in vacation rental properties. Aside from the expected surge in demand for Airbnb rentals in 2022 and beyond, you can enjoy tons of other benefits when you buy vacation rental property.

Here are several reasons why investing in vacation rentals for sale is a good idea not only now but also in the future:

1. Higher Rental Income

When choosing a good location for your Airbnb investment, vacation rentals can generate a higher income than most traditional rental properties. It is because you rent out per day rather than per month or year, so that you can charge a higher daily rate.

But to boost your Airbnb revenue, you need to select a proper market with a strong Airbnb occupancy rate.

For example, many investors are looking for vacation rentals for sale in Florida because the Sunshine State is a famous tourist destination at any time of the year. Visitors are expected to flock to Orlando and other Florida cities year-round, giving Airbnb owners good business.

Similarly, experienced investors find profitable opportunities in St. George, Utah, due to the year-long flow of tourists. Other markets that offer the same benefit include Oregon Coast and some cities in North Carolina.

2. Portfolio Diversification

If you own other types of investments inside or outside real estate, investing in vacation rentals for sale is a great way to build and diversify your portfolio. You can buy Airbnb rental properties of different types and sizes and in various markets. You can go for self-managed or professionally managed vacation homes. The opportunities are endless.

Meanwhile, asset diversification will help protect your investments from market volatility. If you own other existing income properties, short term rentals can be a great addition to your assets to enhance short term income and long term equity.

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.

Alternatively, you can opt for hiring a vacation rental management company that will take care of all aspects of starting an Airbnb business. It will allow you to invest out of state or part-time while making passive rental income.

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 person, you may find investing in unique property types interesting.

If, on the other hand, you are a more traditional investor, you can choose between single family homes, townhouses, apartments, condos, and multi family homes.

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. You must learn about tax deductions or hire a local accountant to benefit from all the tax cuts you are eligible for as a vacation rental host.

Remember to take advantage of all opportunities to cut your operating expenses and boost your cash flow. It is the way to make more money with Airbnb.

6. Availability of Renters

The availability of online vacation rental marketplaces, such as Airbnb and VRBO, makes it easy for investors to advertise and market their properties and find guests. Moreover, there is a myriad of short term rental management tools that can help you automate the process at a minimal cost.

Additionally, since many people are ready to travel after being locked in for over two years due to the pandemic, you can expect to see your vacation rental property quickly occupied. The key is to invest in an area that visitors frequent.

7. Free Vacation Home

Though your vacation home is used primarily for real estate investment purposes, you can also enjoy it occasionally for yourself and your family without paying anything. This dual use is a significant benefit of investing in vacation rentals for sale as opposed to other investment strategies.

There are different types of vacation rental properties available for sale, as listed above. You need to consider the pros and cons of each type when looking for the best vacation rental for your goals.

Moreover, you can take into account your preferred property type and travel destination when choosing an investment property. If you would like to spend your holidays in a certain place, others would most probably like it, too.

5 Risks of Investing in Vacation Rentals & How to Avoid Them

Before learning how to find the best short term rental properties for sale, it’s important to consider the drawbacks and risks of the vacation rental strategy. Smart real estate investors need to be familiar with both the pros and cons.

To help you out, in this section, we will outline not only the main challenges to keep in mind as an aspiring Airbnb host but also remedies for each one of them.

1. High Vacancy

The Airbnb occupancy rate you can generate is one of the main factors of your property’s profitability. However, vacancy is a much bigger risk with vacation rentals than their traditional counterparts.

The reason is that you get daily bookings, so you must keep marketing your property all the time to keep it occupied. Moreover, seasonality can cause prolonged periods of lack of bookings during the low season.

To lower the impact of the vacancy risk, you have to conduct Airbnb market research and focus on a location where guests come throughout the year. Furthermore, in your rental property analysis, you must consider the occupancy rate that can be expected and not settle for anything under 50% or even 60%.

In addition, once you’ve bought a vacation rental home to rent out, you need to up your rental marketing game. Create listings on both Airbnb and Vrbo. Upload attractive professional photos of your house. Write an enticing yet truthful property description. Adopt dynamic pricing to decrease daily rates during low season and increase them during high season.

2. Endless Host Tasks & Responsibilities

Property management is the second factor to consider before investing in vacation rentals for sale. Because guests come and leave daily, you can expect to be much busier as an Airbnb host than a traditional landlord.

Some of the tasks you will need to perform regularly include cleaning the property, washing sheets and towels, restocking supplies like coffee, soap, and tissues, and renewing the welcome package. Furthermore, short term rentals are subject to more tear and wear as guests are less careful than long term tenants. So you should be prepared for extra repairs.

There is an easy solution to this vacation rental challenge as well. You can hire a professional short term rental property manager who will be responsible for all day-to-day tasks, property inspection, and coordinating maintenance work.

If you are worried about the increased cost associated with professional property management, you should know that it’s generally worth it. Vacation rental property managers can help boost rental income and lower operating expenses. The difference is enough to cover their fees and increase your cash flow.

Related: Airbnb Property Management Fees Breakdown – Are They Worth It?

Meanwhile, you end up with a source of stable passive income.

3. Greater Rental Operating Expenses

Return on investment in real estate formulas comes with two main sides: the revenue and the costs; that is, the cash moving in and the cash moving out of your property. How much money you make is the difference between the two. That’s why vacation rentals face a higher risk of potentially lower profitability due to larger startup and operating expenses.

For starters, you have to furnish your short term rental in full, while furnishing long term rentals is optional. Once you start renting out, you must pay for utilities, cleaning supplies, amenities, and others. All in all, Airbnb rental properties result in higher costs.

To make sure that it does not affect your rate of return negatively, incorporate all the expenses in your initial rental property analysis before buying a property. Doing so will help guarantee positive cash flow and a substantial return on investment.

The good news is that the investment property analysis can be easily optimized with Mashvisor. Our vacation rental analysis platform provides a detailed breakdown of all startup and recurring expenses, as well as rental income and resulting cash flow, cash on cash return, and cap rate.

In this way, you don’t have to worry about collecting and analyzing tons of real estate and rental data.

4. Travel & Tourism Restrictions

As the recent Coronavirus experience demonstrated, short term rental properties are prone to extremely high risk in case of major shocks to travel like a global pandemic. As soon as the pandemic was declared, Airbnb occupancy rates dropped multi-fold even in such strong vacation rental markets as Florida. The risk is much higher than with traditional rentals.

However, it doesn’t make sense to stay away from this otherwise very profitable rental strategy, waiting for a disaster to happen. Instead, you can take certain actions to minimize the associated risk.

For instance, it’s a smart move to invest in vacation rental properties for sale where traditional rental demand is also strong. In this way, you can easily switch rental strategies should a need arise.

Mashvisor can help you find locations and properties with high demand and above-average profitability for both rental approaches.

5. Short Term Rental Laws & Regulations

Last but not least, a unique risk imposed by Airbnb rentals is the vacation rental regulations and restrictions in numerous US markets. Partially under pressure from the hotel lobby, many local authorities have introduced strict requirements and limitations to control the further expansion of the vacation rental industry.

As a result, many previously hot Airbnb markets like California and New York have turned into suboptimal locations for non-owner occupied short term rental properties.

Once again, this obstacle has a relatively easy solution. Namely, make sure to invest in the cities with the least Airbnb legal issues. However, keep in mind that short term rental regulations are dynamic, so you need to stay up to date with the most recent updates. Make sure to check out the local government website for current rules and regulations.

Meanwhile, here’s a tip from us: Florida and North Carolina have some of the least restrictive Airbnb laws while offering a great rate of return. So you can start your vacation rental property search there.

To learn more about investing in North Carolina rental properties, click here.

Now that you know the risks associated with buying vacation rental properties and how to mitigate their effect, it’s time to look at how to locate the best deals for this strategy.

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 and then perform a comprehensive real estate analysis to compare which one would make the best investment.

Following is a step-by-step guide on how to find the best market and the top properties for sale for this rental strategy:

1. Choose a Good Vacation Rental Market

The first step in finding optimal short term rental properties for sale is selecting an appropriate market. One of the most important factors to consider is how popular a tourist destination the location is. Ideally, you want to go for a market that attracts visitors throughout the year. Focus on places that have attractions both in the summer and in the winter.

If you’re a beginner investor, it’s recommended to choose a city with affordable home values so that you can make the down payment and the monthly mortgage payments. Furthermore, the property purchase price factors in all formulas for return on investment, and the lower the price, the higher your profit.

And since we’re talking about vacation rentals, you cannot ignore the local short term laws. Make sure to choose a market where there are no prohibitive regulations and where there have been no talks of introducing such rules.

If you’re still not sure where to get started, check out the hottest Airbnb markets 2022.

2. Select an Optimal Neighborhood Within the Market

While the city in which you buy a vacation rental for sale is important, the specific area within the city is equally important. After all, not all neighborhoods in a city are created equal.

When you choose the area in which to invest in a short term rental, focus on factors like:

• Proximity to tourist attractions
• Walkability
• Access to public transportation
• Shopping opportunities
• Dining options
• Safety
• Overall vibe

Your Airbnb guests would want to have a convenient and trouble-free stay while on vacation.

In addition, you need to look at the numbers. You want a neighborhood with relatively low real estate prices, high Airbnb revenue, strong occupancy rates, and – most importantly – above-average profitability. Luckily, Mashvisor has the perfect tool to help you identify such areas in any US housing market.

Heatmap Analysis

Real estate investors can use the real estate heatmap tool available on our platform to find neighborhoods with the most lucrative vacation rentals. You can locate areas using different filters, such as median property price, average Airbnb rental income, cash on cash return, and Airbnb occupancy rate.

Neighborhood Analysis

Once you’ve chosen a few areas which cover your investment needs and expectations, you can deepen your local market analysis with the Mashvisor neighborhood analysis pages. There, you will find a summary of all the real estate and vacation rental data and analytics you need to make an informed decision on the best area to invest in.

Specifically, you will get the Mashmeter score of the overall ranking of the neighborhood for investment purposes. Moreover, you can access the median property price, average Airbnb income, Airbnb cash on cash return, and Airbnb occupancy rate, as well as the optimal property type and size.

3. Search for Available Properties for Sale

After you’ve chosen a vacation rental market in which to buy a property, it’s time to start looking for real estate listings for sale. There are a number of more and less traditional channels which you can use for this purpose.

Channel #1: Use Your 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 valuable sources of information about potential investment properties. They may know someone 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 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 middleman.

Channel #2: Check Online

A simple Google search can reveal numerous websites containing listings of investment properties for sale. Try searching for terms such as “real estate for sale,” “for sale by owner,” “short sale,” and “foreclosure.”

Alternatively, you can visit online marketplaces like Mashvisor directly to find profitable properties. The platform offers the following tools in this regard:

Property Finder

Mashvisor’s 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 city, distance from a location, budget, rental strategy, number of bedrooms, and number of bathrooms.

Investment Property Search Engine

To find the best vacation rental properties available for sale, you can also use Mashvisor’s search engine. To get MLS listings that match your expectations, you can enter your criteria, including city, neighborhood, budget, financing method, rental income, return on investment, and others.

You can organize the results based on several factors to get the top-performing properties for sale on top of your search results.

Channel #3: Check Print Media

Since some properties might not be advertised online, make 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 major 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?

Channel #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 the bidding process.
• 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

Channel #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 can also help negotiate a favorable deal. A Google search using the term “real estate agent in [your area]” or “top real estate agents near me” 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.

4. Conduct Diligent Rental Property Analysis

The fourth and last step in finding vacation rental properties to purchase is to analyze their investment potential. Just because a property is located in a top market doesn’t make it a profitable opportunity.

Performing investment property analysis requires a lot of time to collect the necessary data and run the calculations. Alternatively, you can use another of Mashvisor’s real estate investment tools to optimize the process.

Investment Property Calculator

With an Airbnb profit calculator, you don’t need to calculate metrics for real estate listings manually. Our rental property calculator provides calculations for startup costs, operating expenses, financing method, occupancy rate, cash flow, cap rate, and cash on cash return.

Vacation Rental Comps

Importantly, all the estimates and forecasts provided by the Mashvisor calculator are based on the performance of active Airbnb listings in the area. We use short term rental comps to predict how a similar property is expected to perform if listed on Airbnb. It makes the analysis highly accurate and reliable.

To start searching for and analyzing vacation rental properties for sale today, sign up for a 7-day free trial of Mashvisor.

Top Locations for Vacation Rentals for Sale in 2022

As we explained above, choosing the right location for your investment property is crucial as it can significantly affect your profitability. The best markets for vacation rentals are those close to tourist attractions and are frequently visited by guests 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.

Based on Mashvisor’s data as of August 2022, here are the top locations for vacation rentals based on Airbnb cash on cash return (arranged from highest to lowest):

Note: For the ranking below, we’ve focused on markets with a minimum of 100 active Airbnb listings and a median property price below $1m. However, these locations might face different short term rental laws. It’s your responsibility as an investor and a host to check the local regulations before buying a property to turn into a vacation rental.

1. Rio Grande, New Jersey

• Median Property Price: $318,900
• Average Price per Square Foot: $245
• Days on Market: 52
• Monthly Short Term Rental Income: $3,965
• Short Term Rental Cash on Cash Return: 8.00%
• Short Term Rental Cap Rate: 8.21%
• Short Term Rental  Daily Rate: $301
• Short Term Rental  Occupancy Rate: 52%
• Walk Score: 52

2. Reading, Ohio

• Median Property Price: $214,940
• Average Price per Square Foot: $148
• Days on Market: 33
• Monthly Short Term Rental Income: $2,761
• Short Term Rental Cash on Cash Return: 7.66%
• Short Term Rental Cap Rate: 7.95%
• Short Term Rental  Daily Rate: $101
• Short Term Rental  Occupancy Rate: $59%
• Walk Score: 80

3. West Allis, Wisconsin

• Median Property Price: $219,161
• Average Price per Square Foot: $154
• Days on Market: 36
• Monthly Short Term Rental Income: $2,861
• Short Term Rental Cash on Cash Return: 7.51%
• Short Term Rental Cap Rate: 7.79%
• Short Term Rental  Daily Rate: $116
• Short Term Rental  Occupancy Rate: 69%
• Walk Score: 56

4. Port Allen, Louisiana

• Median Property Price: $244,378
• Average Price per Square Foot: $175
• Days on Market: 16
• Monthly Short Term Rental Income: $2,763
• Short Term Rental Cash on Cash Return: 7.41%
• Short Term Rental Cap Rate: 7.66%
• Short Term Rental  Daily Rate: $131
• Short Term Rental  Occupancy Rate: 55%
• Walk Score: 49

5. Sweetwater, Florida

• Median Property Price: $554,607
• Average Price per Square Foot: $358
• Days on Market: 61
• Monthly Short Term Rental Income: $4,332
• Short Term Rental Cash on Cash Return: 7.37%
• Short Term Rental Cap Rate: 7.54%
• Short Term Rental  Daily Rate: $180
• Short Term Rental  Occupancy Rate: 51
• Walk Score: 82

6. Columbia Heights, Minnesota

• Median Property Price: $281,240
• Average Price per Square Foot: $153
• Days on Market: 31
• Monthly Short Term Rental Income: $3,396
• Short Term Rental Cash on Cash Return: 7.33%
• Short Term Rental Cap Rate: 7.56%
• Short Term Rental  Daily Rate: $136
• Short Term Rental  Occupancy Rate: 66%
• Walk Score: 82

7. Fargo, North Dakota

• Median Property Price: $219,410
• Average Price per Square Foot: $112
• Days on Market: 40
• Monthly Short Term Rental Income: $2,650
• Short Term Rental Cash on Cash Return: 7.33%
• Short Term Rental Cap Rate: 7.69%
• Short Term Rental  Daily Rate: $122
• Short Term Rental  Occupancy Rate: 69%
• Walk Score: 32

8. Brooklyn Park, Maryland

• Median Property Price: $380,650
• Average Price per Square Foot: $186
• Days on Market: 73
• Monthly Short Term Rental Income: $4,136
• Short Term Rental Cash on Cash Return: 7.22%
• Short Term Rental Cap Rate: 7.38%
• Short Term Rental  Daily Rate: $141
• Short Term Rental  Occupancy Rate: 56%
• Walk Score: 69

9. Steelton, Pennsylvania

• Median Property Price: $182,294
• Average Price per Square Foot: $99
• Days on Market: 24
• Monthly Short Term Rental Income: $2,634
• Short Term Rental Cash on Cash Return: 7.20%
• Short Term Rental Cap Rate: 7.44%
• Short Term Rental  Daily Rate: $116
• Short Term Rental  Occupancy Rate: 65%
• Walk Score: 66

10. Midway Park, North Carolina

• Median Property Price: $182,664
• Average Price per Square Foot: $142
• Days on Market: 80
• Monthly Short Term Rental Income: $2,153
• Short Term Rental Cash on Cash Return: 7.05%
• Short Term Rental Cap Rate: 7.37%
• Short Term Rental  Daily Rate: $100
• Short Term Rental  Occupancy Rate: 62%
• Walk Score: 12

To start searching for top-performing vacation rentals for sale in these best 10 markets or any other location, click here.

The Bottom Line

Similar to traditional rental properties, investing in short term rentals comes with many pros and cons. With the vacation rental strategy, you need to consider things like higher vacancy, active property management, recurring expenses, future travel restrictions, and Airbnb laws.

However, despite the drawbacks, it also brings numerous benefits. The most important ones include higher vacation rental income and better return on investment. That’s why you should weigh the pros and cons before deciding if buying vacation rentals for sale is the right real estate investment strategy for you.

If you decide to dive into such a profitable opportunity, make sure to follow the four steps outlined above to buy positive cash flow Airbnb investment properties every time. Specifically: 1) Choose an optimal market; 2) Select a good neighborhood; 3) Search for real estate properties for sale using multiple channels; and 4) Analyze the property diligently.

In addition, as a smart, numbers-driven investor, don’t forget to use the best real estate investment tools available on the market today. Check out Mashvisor for access to our heatmap, neighborhood analysis pages, property search engine, rental property calculator, and Property Finder.

To access Mashvisor’s tools now, sign up for a 7-day free trial, followed by 15% off for life.