This Is the Best City to Own a Vacation Rental Home
After months of day after day in their homes because of the COVID-19 pandemic, Americans are back out on the roads and on airplanes. Car traffic over the Fourth of July weekend reached nearly record levels. Air travel has almost entirely recovered. This travel has made vacation homes in some markets very good investments.
Realtor.com’s data group looked at the best places to buy a vacation home that could be offered on travel sites like Airbnb. Luis D. Ortiz, a real estate broker who stars on Netflix’s “World’s Most Amazing Vacation Rentals,” remarked “There’s a very big opportunity to buy cheap and make a lot of money in return.” He added: “Vacation rentals give you something that hotels can’t give you, and it’s that sense of home.”
Most of the locations that were best for investment in homes that would then be rented out were small. Realtor.com researchers added many were within driving distance of large cities. It examined a universe of the 250 largest rental markets. It then looked a short-term revenue growth for these vacation rentals from May 2019 to May 2021. It skipped 2020 because of the effects of the pandemic on vacation travel.
Realtor.com then looked at the cost to buy vacation rental properties in these markets. It assumed a 20% down payment and a 3% mortgage rate.
Realtor.com’s top market is Joshua Tree, California. The median listing price of a home is $525,050. Annual revenue generated from vacation rentals rose 113% to an average daily of $268. That means nine days of rentals cover mortgage costs. One reason for the influx of visitors is Joshua Tree National Park. Unfortunately for people who own vacation rental properties there, the park has been plagued by extreme drought. Rental income in the upcoming year may not be as good.
Click here to see the most expensive cities in which to buy a home.
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