Investing in vacation rentals is still one of the hottest trends in real estate, and for good reason. Whether you’re a seasoned real estate investor, a vacation home seeker, or a short-term rental (STR) owner comparing markets, choosing the right location is crucial for maximizing your return on investment. But with so many attractive destinations, how do you choose the best place to invest? Below we walk through the factors to consider when buying a vacation rental and highlight some of the strongest locations for vacation rental investments right now, along with what to look for in a vacation rental manager once you close on a property.
Factors to Consider When Buying a Vacation Rental
Before diving into the best locations to buy a vacation rental, it’s essential to understand the factors that can influence your investment decision:
- Market Demand: Look for areas with high tourism rates and a steady flow of visitors throughout the year. Seasonal demand can impact your rental income, so consider places that attract tourists year-round.
- Rental Income Potential: Evaluate the average rental income in the area. High demand areas typically offer better rental income potential, but also consider the competition and average occupancy rates. Tools like AirDNA and Mashvisor can help you analyze the potential ROI for different locations. Make sure you do your own due diligence before jumping in with an investment.
- Property Prices and Appreciation: Assess current property prices and historical appreciation rates in the area. Investing in a region with rising property values can provide long-term financial benefits. Sites like Zillow and Redfin are useful for checking up-to-date local pricing before you make an offer.
- Local Regulations: Different cities have different rules about short-term rentals. Some places may have strict regulations, permit requirements, or higher taxes, which could impact your ROI and your ability to rent out the property. Make sure to research local regulations and tax laws thoroughly before making a decision, as STR ordinances can and do change from year to year.
- Amenities and Attractions: Properties near popular attractions, beaches, mountains, or other desirable locations tend to attract more renters. Access to amenities like restaurants, shopping, and entertainment can also boost your rental’s appeal. While these may not be the biggest point of consideration if you are looking to invest in a niche, tranquil retreat targeting specific visitors, proximity to amenities and attractions can significantly boost your property’s appeal.
- Property Management: Running a vacation rental comes with costs such as maintenance, repairs, property management fees, and cleaning services. The well known 50% rule suggests that about half of your rental income will go towards these expenses. This is where partnering with an experienced vacation rental management company makes a real difference.
A local team that understands the market, from dynamic pricing to guest communication to turnover cleaning, can protect your occupancy and your reviews while freeing you from the day-to-day work. If you already own a short-term rental and are evaluating whether to self-manage or hire a manager, GoodNight Stay’s vacation rental management services are a good place to start comparing what full-service management includes. - Seasonality and Climate: Understand the seasonality of the location and how it affects demand. Properties in areas with mild climates may attract visitors year-round, while those in more seasonal locations might have peak periods.
Top Locations to Buy a Vacation Rental
With the above points of consideration in mind, here are some locations worth researching further.
Ellsworth, Maine
Ellsworth has long ranked among AirDNA’s top markets for STR investment, with short-term rentals in the area currently running around 65% occupancy, well above the national average. Its proximity to Acadia National Park drives high demand: the park’s stunning landscapes, hiking trails, and outdoor recreational activities attract nature enthusiasts year-round. Beyond the park, Ellsworth offers charming local amenities, including quaint shops, delicious seafood restaurants, and cultural attractions like the Grand Theatre. The combination of natural beauty and small-town charm makes Ellsworth an appealing location for vacation rentals, drawing both adventure seekers and those looking to relax in a picturesque setting.
Logan, Ohio
Logan is known for its picturesque scenery in Hocking Hills State Park and along the Hocking River. This small city offers strong all-around numbers, making it an option worth researching for investors looking for a mix of natural beauty and cultural activities. The area’s breathtaking waterfalls, caves, and hiking trails draw outdoor enthusiasts, while Logan’s historic downtown provides a variety of local shops, restaurants, and festivals. With a strong sense of community and a steady influx of tourists, Logan presents a solid investment opportunity for those seeking to capitalize on both nature and culture.
Nashville, Tennessee
The Music City is not just for country music fans. With its vibrant nightlife, rich history, and a booming culinary scene, Nashville attracts a diverse array of visitors. Downtown Nashville is also a very walkable area, alleviating visitors of the hassle of having to rent a car or having to coordinate a rideshare every time they move from honky tonk A to honky tonk B. Nashville remains one of the most in-demand STR markets in the country, making it a strong option for vacation rentals, especially in areas close to downtown.
Columbus, Georgia
Columbus is a hub for outdoor enthusiasts and history buffs, making it an excellent vacation rental market for investors on a budget. The typical home value in Columbus sits around $152K, well below the national median, which helps support strong rental yields for the area. The city’s location on the Chattahoochee River provides opportunities for white-water rafting, kayaking, and scenic riverwalks. Additionally, Columbus is home to several historical sites and museums, including the National Infantry Museum and Soldier Center, attracting history lovers year-round. Its vibrant arts scene, with the Springer Opera House and RiverCenter for the Performing Arts, further enhances its appeal.
Spring Hill, Florida
Spring Hill is a paradise for nature lovers. Its proximity to Weeki Wachee Springs State Park and the Chassahowitzka Wildlife Management Area helps support an occupancy rate of around 55%. Weeki Wachee Springs offers unique attractions such as mermaid shows and riverboat cruises, while the wildlife management area provides opportunities for bird watching, kayaking, and hiking. The area’s natural beauty and recreational opportunities make it worth a closer look for investors. Spring Hill’s tranquil environment and accessibility to Tampa’s metropolitan amenities add to its desirability for vacation renters.
Sneads Ferry, North Carolina
Sneads Ferry has become considerably more accessible for investors, with the median home price now running around $400K, down from levels seen a couple of years ago. Its coastal location near North Topsail Beach and untouched shoreline make it a prime destination for vacation rentals. The town’s serene environment is perfect for those seeking a peaceful getaway. Visitors can enjoy activities such as fishing, boating, and exploring the nearby wildlife refuges. The local seafood industry, with its fresh catches and seafood festivals, adds a unique charm to the area. Sneads Ferry’s combination of coastal beauty and laid-back lifestyle makes it an attractive option for investors aiming to offer a tranquil retreat.
Scottsdale, Arizona
Scottsdale is a premier destination for luxury and leisure, offering a blend of high-end resorts, world-class golf courses, and a thriving arts scene. Its year-round sunny climate and proximity to the stunning Sonoran Desert make it a magnet for tourists. Scottsdale’s diverse attractions, including upscale shopping, renowned dining options, and vibrant nightlife, ensure a steady stream of visitors. The city’s robust real estate market, combined with strong rental demand, makes it an attractive investment opportunity for owners of Scottsdale vacation rentals. Scottsdale also hosts numerous events and festivals throughout the year, further boosting its appeal and potential for rental income.
Already Own a Vacation Rental? Choosing the Right Manager Matters
Buying in the right city is only half the equation. Once you own the property, the manager you choose has an outsized effect on your occupancy, your nightly rate, and how much of your revenue you actually keep. When evaluating a vacation rental manager, look for:
- Local market expertise in the specific city or neighborhood where you own, not just a national brand name
- Dynamic, data-informed pricing rather than a flat nightly rate
- In-house or vetted cleaning and maintenance teams to protect turnover times and guest reviews
- Transparent fee structures with no surprise costs buried in the contract
- Direct booking and multi-channel distribution across Airbnb, Vrbo, and Booking.com to maximize visibility
Ready to Invest?
If you’re ready to take the plunge into vacation rental investment, having a trusted partner can make all the difference. Alpha Residential is GoodNight Stay’s dedicated premier team of real estate agents, renowned for their professionalism, integrity, and industry knowledge. Having sold billions in residential real estate across thousands of units and hundreds of millions in commercial real estate, they are well-equipped to guide you in selecting the perfect location for a vacation rental. Alpha Residential can help you find a property suited to be an investment opportunity, and GoodNight Stay can help manage your short-term rental to maximize your ROI. Contact Alpha Residential today to take the first step toward owning a successful vacation rental, or reach out to GoodNight Stay if you already own a property and want a free evaluation of your current management setup.
