There are plenty of compelling reasons to invest in a vacation home. There are personal reasons of course, but there can also be financial advantages. If you’re a first-time real estate investor thinking about buying a vacation property, you can rent it out when you’re not using it and cover the costs and hopefully make a profit as well.
Real estate investments help you build value through appreciation, which frequently happens when you buy property. A second home can also offer the opportunity to take advantage of certain tax benefits.
When you are investing in a vacation property, the location you choose is important. You want a place that will attract a lot of guests so you can keep it rented if that’s your plan, and also so that you charge a substantial nightly rate.
The following are five great places to consider investing in a vacation or second home in the U.S. right now.
Sevierville, Tennessee, is in the Smoky Mountains and is close to the tourist destinations of Pigeon Forge and Gatlinburg. This place gives a good central location to explore the Great Smoky Mountains National Park, which is the most visited in the country. It’s also possible to find a relatively good deal on property in the area. In the Sevierville, Gatlinburg, and Pigeon Forge areas, the median home price is $182,950, while the median annual rental revenue is $42,751.
Myrtle Beach, South Carolina
Myrtle Beach and the entire Grand Strand draw in millions of tourists every year thanks to features like 60 miles of uninterrupted shoreline and nearly 90 golf courses. It’s a great market for short-term rentals, as well. The median home value is $129,000, and you can also find some deals on oceanfront properties. In June through August, occupancy rates are more than 80%.
Most of Florida can prove to be a great place to invest in a vacation home. Florida is an inexpensive state in terms of taxes, and Kissimmee is located only 17 miles south of Orlando. Kissimmee is sometimes described as a hidden gem for real estate investors because of the proximity to all of the tourist attractions of Orlando. The median home price in Kissimmee is around $240,000, and the traditional monthly rental income in the area is around $1,370. The average Airbnb rental income is $1,913. Real estate investment property values have also gone up around 13.6% in the past year.
Gulf Shores, Alabama
Gulf Shores, Alabama, has recently gained attention as one of the best places to buy a vacation property in the country. This town offers beaches, outdoor activities and there are a lot of restaurants and other attractions that draw in tourists. According to Zillow, Gulf Shores homes have an average value of $262,000, and they’ve gone up 1.2% in the past year.
Big Sky, Montana
Finally, Big Sky, Montana, can be a great place to invest. There are nearly 6,000 acres of skiable land in the area, spread across the Northern Rockies, and Big Sky is within driving distance to Yellowstone National Park. Occupancy rates usually remain high, particularly in the winter. Property prices are higher here, so it represents more of a luxury market. If you do have the liquidity to put into a high-end investment, Big Sky can be a good option!